Trade Bill

Lord Hain Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 8th September 2020 Lords Chamber

[Lord Hain (Lab) [V]]

My Lords, I also welcome the maiden speeches by the Minister and the right reverend Prelate.

The UK faces the economic consequences of the global pandemic amplified by a no-deal Brexit. The Government have now admitted that, even with a Canada-style deal, non-tariff barriers and checks by the EU will come into force. Incredibly, the Government’s border operating model will create an internal UK border in Kent, with truckers required to acquire a Kent access permit, or KAP, for the required paperwork before travelling, on penalty of a £300 fine.

The Brexiteers seem to remain under the delusion that they can replace the EU market—the richest and biggest in the world, and which constitutes nearly half of our trade—with new agreements with countries such as the US, which constitutes 16% of our trade; Japan, which constitutes just over 2%; and Australia and New Zealand, which constitute less than 1%. Leaked government forecasts suggest that a trade deal with the US would benefit the UK economic output by only about 0.2% in the long term. Japan has been reluctant to agree a deal more favourable than its existing agreement with the EU. As for Australia and New Zealand, they have a combined population of 30 million, compared to the EU’s 450 million.

For the last couple of years, the Department of International Trade has been scrambling to roll over the 40 or so existing EU agreements with over 70 countries, constituting another 10% of our trade, excluding Japan. The DIT website shows that roughly half of these countries have signed rollover deals, often with human rights provisions watered down. The Bill fails to provide for essential parliamentary scrutiny of such future trade deals, as recommended by the Institute for Government to protect, among other important matters, human rights, workers’ rights and the environment. Parliamentary scrutiny should extend to the UK’s future membership of the World Trade Organization’s Agreement on Government Procurement to protect public services, such as the NHS, which are at risk from grabs by US companies under the Government’s agenda.

Then there are the reckless briefings in the media to renege on the Irish protocol in the EU withdrawal treaty, which would mean the UK defying international law, not to mention poisoning relations with by far our biggest trading partner and undermining the Good Friday agreement.

The spurious claim that, cut off from open access to the EU, Brexit would enable the UK to make advantageous trade deals is unravelling before our eyes. The Bill does nothing to mitigate the disastrous economic consequences of no deal, or a thin-deal Brexit, now tragically in prospect.

Trade Bill

Lord Hain Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 29th September 2020 Grand Committee

[Baroness Burt of Solihull (LD)]

My Lords, I shall speak to Amendment 3 on small businesses, to which I have added my name. As we enter the post-transition and post-Covid world of international trade, we must ensure that the role of SMEs in procurement is fully protected so that it can help strengthen the UK’s economic playing card as we navigate the current turbulence and beyond.

At Second Reading, I asked the Minister, the noble Lord, Lord Grimstone, whether, given our new freedom from the EU, we should adopt the policy of the US, Canada, South Korea and Japan to put an annexe in our GPA schedules to allow them to set aside and disapply regulations on behalf of small businesses and other organisations to help bring parity of support for small businesses in accessing markets against larger firms. After all, is that not why the UK decided to leave the EU in the first place? The noble Lord informed me that non-discrimination is the core principle of procurement in the UK and we do not have set-asides for SMEs in international agreements. Okay—I hear him. But whether or not it is intended, it can be more difficult for small businesses to compete against larger firms by virtue of their size and the complexity and requirements of the procurement process.



I will not detain the Committee by going through them all, but when pitching for public contracts, I suggest that few small businesses would feel that the playing field was equal. Take late payment, the scourge of small businesses, particularly because of the relative power of the organisation doing the procuring. The Federation of Small Businesses has long been calling for bad payers to be barred from applying for government contracts. I know that this is something that the Government acknowledge, and this amendment would effectively help the Government to defend themselves against late payers on the trading stage. Why does the Minister feel confident that, when we are competing against the likes of the US, South Korea and Japan, UK small businesses will get fair access to public contracts? Nobody wants to see poor payment practices on the trading stage; this is about fairness and parliamentary accountability, so I would appreciate some commitments from the Minister today.

That brings me to the point of the amendment. It lays a duty on the Government to ensure that small businesses can compete fairly to get greater access to procurement contracts in countries to which the GPA applies. It makes sure that the Government fulfil this obligation by laying a Statement before Parliament reporting that this has been done, and the outcome. If the Minister is committed to a level playing field for small businesses, why not agree to put it into law?

[Lord Hain (Lab) [V]]

My Lords, I support Amendment 1, moved so ably by my noble friend Lord Lennie. I wish to speak specifically to Amendment 5 in the name of my noble friends Lord Hendy, Lady Blower and Lady Bryan. Why? One year ago, on the same day—24 September 2019—that the UK Supreme Court ruled the Government to have unlawfully sought to prorogue Parliament, the Prime Minister was in New York presenting his vision of a post-Brexit Britain to an audience of American business leaders. It involved undercutting European tax rates and adopting lower standards of environmental protection, consumer safety and labour rights than those set by the European Union. It foresaw a low-tax, lightly regulated haven on the European Union’s doorstep, not interested in competing on a level playing field but intent on winning any race to the bottom.

This Trade Bill seeks to take us one step closer to fulfilling the Prime Minister’s dream. It does so more by omission than by commission. As in Lena Horne’s “New Fangled Tango”,

“It’s not what you do do, it’s more what you don’t do”.


It does nothing to promote labour standards. It does not stop signatories to trade agreements seeking unfair competitive advantage by failing to comply with International Labour Organization conventions. It provides no powers for government bodies in the UK to impose public procurement conditions on contractors requiring them to abide by UK labour law or by ILO conventions ratified by the UK. Instead of levelling up labour standards, the Bill encourages shady employers who want to undercut their more responsible rivals by shafting their workforce. It does so by turning a blind eye to bad employment practice and pretending that unfair exploitation does not exist, despite ample evidence that it is widespread from employment tribunal cases and from the daily experience of trade union representatives in workplaces nationwide.

This amendment would put a stop to any regulations implementing the Agreement on Government Procurement if that agreement could in any way hinder the ability of UK state authorities—be they central Government or the devolved Governments—to set conditions on anyone tendering for a public contract. The power of the public purse should be used to raise labour standards and to encourage compliance with global standards such as those set in ILO conventions.

--- Later in debate ---

[Lord Hain (Lab) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Kramer, who spoke very eloquently; I endorse what she said.

I will speak to Amendment 18, in the name of the noble Lord, Lord Hendy, and my noble friends, which I have signed. I very much endorse the speeches of my noble friends Lord Stevenson and Lady Bennett. On Amendment 18 in particular, I welcome and endorse the excellent contribution of my noble friend Lord Hendy, who adds enormous authority on these issues.

My noble friend mentioned that the Canada-European Union agreement—CETA—includes the very kinds of provisions that we are asking for in Amendment 18. I note that leading Conservatives—Brexiteers—have spoken of “Canada-plus” as a future basis for a trade agreement with the European Union. Does Canada-plus mean labour rights-minus? A failure to adopt Amendment 18 would imply that that is the case, and that that is the real agenda of the Brexiteers.

Amendment 18 would preclude the UK from agreeing any international trade agreement if its regulations contravened the UK’s international labour law commitments. The UK is a member of the International Labour Organization and has been so since 28 June 1919. Under the auspices of the ILO, fully 88 conventions and two protocols have already been ratified by the United Kingdom. I cannot see why the Minister could not agree to this amendment and why the Government would not endorse it since, in effect, it reinforces the status quo to which we have already signed up in all future trade agreements.

Of course, that is unless the Government’s real agenda is a kind of Singapore-upon-Thames, with a deregulated structure of labour rights, environmental rights and all sorts of other rights that we have come to expect as representing the standards that we want in Britain; an offshore haven of low labour regulations, low standards and low tax. That is what leading Conservatives, particularly the Prime Minister and his henchman Dominic Cummings, have been talking about. Surely we should not be racing to the bottom in every respect for British citizens and workers but seeking to match the best, such as the Scandinavian countries, which have high standards in these matters—high levels of public services and the public expenditure to sustain that. They have also had, by the way, much higher levels of productivity and economic success than Britain has had under this Government for the last 10 years, prior to Covid.

What sort of “taking back control” will it mean if we do not adopt Amendment 18, or at least a version of it that the Government might favour for technical reasons? What does “taking back control” mean for Brexiteers? Instead of high-quality, high-skilled standards it would mean low-quality, low-skilled standards, particularly on labour rights.

I should point out that the ILO standards that this amendment seeks to reinforce and insist on for any future trade agreements that the UK might strike with other countries are a minimum, not a maximum. They have been achieved by agreement across the world and therefore, inevitably, are not the maximum we should be aiming for. Surely we should, in a high-quality Britain that aims to be the best for its citizens, aim for the maximum. As my noble friend Lord Hendy said so poignantly, the amendment is surely uncontroversial because it asks the Government to adopt in future trade agreements what they have already signed up to in ILO conventions and protocols. I hope that the Minister will accept it or explain why not and what sort of agenda is really on offer for the British people from his Government.

[Baroness Blower (Lab) [V]]

My Lords, I have added my name to Amendment 18. As has been said by my noble friends Lord Hendy and Lord Hain, it is an uncontroversial amendment. I too look forward to the Minister’s response, in which I am sure he will welcome it.

I consider it fundamental that the rule of law should be enshrined in the Bill, as should the legal authority of the United Kingdom courts and the principle of equality before the law. It should go without saying that respect for the rule of law can be relied on in the United Kingdom. However, as doubts may have been cast thereon in recent weeks, this amendment is necessary to ensure that international trade agreements observe both the conventions of the ILO—mentioned frequently in this debate and up to which Britain has already signed—and the ratified articles of the 1961 European Social Charter.

My noble friend Lord Hendy has provided a full rationale for this amendment and, as amply demonstrated by reference to CETA, precisely how it can and should work. I fully endorse and concur with his remarks and I look forward to the Minister’s response.

Trade Bill

Lord Hain Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Tuesday 6th October 2020 Grand Committee

Some of these claims are pending, some are without merit, some are inflated and many more are “outcome unknown”—but the chilling effect on democratic Governments is obvious. Why then invite such threats against our own? Regulations must not permit this repugnant mechanism, which gives foreign corporations the power to threaten our Parliament and override the laws and courts of our country—a mechanism denied to our citizens. I beg to move.

[Lord Hain (Lab) [V]]

My Lords, the Covid-19 pandemic has shone a spotlight on unacceptable working conditions, especially those endured by many key workers, and on some of the downsides of globalisation—job insecurity, zero-hours contracts, unfairly poor pay, discrimination and lack of recognition—and it is a pleasure to follow my noble friend Lord Hendy’s very able and expert moving of Amendment 17.

The Covid-19 pandemic has emphasised the significance of employment laws and of gaps in international trade agreements, notably the inadequate protection of labour standards and the woeful lack of requirements that contractors for public sector work should abide by ILO conventions ratified by the UK. Ministers have been keen to distinguish between trade deals rolled over from pre-existing EU trade agreements and new deals yet to be struck independently of the UK. The focus of the Trade Bill is on the former, but if these are to be the foundations for future UK trading relationships in the post-Brexit period, they hardly look secure: far from it. Instead, the Bill is full of holes.

This amendment seeks to fill in some of those holes. It guards against regulations implementing any trade deal that permits investor-state dispute settlement arrangements that expose democratically decided laws to potential threat from foreign companies claiming billions in compensation for supposed losses. My noble friend Lord Hendy spelled out examples and I will add two others. These are not hypothetical threats. Canada has been sued for a moratorium on fracking in Quebec, and Mexico for attacks on sugary drinks to fight diabetes. The amendment will also prevent trade deals that contravene international standards of labour law, such as ILO conventions to which the UK is committed and articles of the European Social Charter, ratified by the UK.

Succeeding in global markets today demands more than matching your competitors’ prices. It means setting fresh standards of product quality and providing unparalleled levels of customer service. That can be done only by adopting world-class ways of working and by treating your workforce with respect for the standards set by ILO conventions. For the life of me —I mentioned this when I last spoke in this Committee—I do not understand why the Government are not accepting these amendments, unless they have an entirely different deregulated, low-labour-standards, low-tax, Singapore-on-Thames agenda for Britain. So I hope that the Minister will reassure us on that point when he replies.

[Baroness Blower (Lab) [V]]

My Lords, I am pleased to speak on Amendment 17, to which I have added my name.

While the history of trade negotiations may not be completely littered with the fragments of failed attempts, it is certainly the case that the Transatlantic Trade and Investment Partnership, TTIP, failed, after several years of negotiations, to come to any conclusion. In Britain, much of the opposition was on the basis of the perceived—and I believe very real—threat to our NHS: the threat that the NHS would not survive as a public service and that the writ of privatisation would run ever more unchecked. I was pleased to hear a most eloquent speech from the noble Lord, Lord Patel, offering a catalogue of already privatised and outsourced elements from our NHS, and, significantly, pointing out the dangers that this posed.

Equally, the opposition to TTIP, not just in Britain but across Europe, focused, as my noble friend Lord Hendy said, on the investor-state dispute settlement mechanism—ISDS. My noble friend gave chapter and verse on the reasons for opposing ISDS. I concur with his remarks and associate myself with those of my noble friend Lord Hain.

Let me add a perspective from the United Nations, specifically from the United Nations Conference on Trade and Development. As the Committee might expect, ISDS features in UNCTAD reports. In May of this year, we find the following in one of its reports:

“Foreign investors have used ISDS claims to challenge measures adopted by States in the public interest (for example … to promote social equity, foster environmental protection or protect public health)”—


all issues close, I am sure, to the hearts of many in this House. The report goes on:

“Broad ISDS mechanisms typically used in old-generation”


international investment agreements

“provide for the contracting parties’ advance consent to international arbitration and are characterized by broad scope, few conditions for investors’ access to ISDS and a lack of procedural improvements. As ISDS is at the heart of the IIA reform process, in recent IIAs countries have carefully regulated ISDS and at times omitted it”

completely.

UNCTAD goes on to make a number of recommendations, but I shall confine myself to this one:

“Replacing ISDS by settling disputes in domestic courts and/or through State-State dispute settlement”.


In July, UNCTAD returned to the question and said:

“Policy responses taken by governments to address the COVID-19 pandemic and its economic fallout could create friction with existing IIA obligations. This highlights the need to safeguard sufficient regulatory space … to protect public health and to minimize the risk of”


ISDS proceedings.

There are huge problems with the ISDS mechanism, from Philip Morris to the Portuguese metro and so many more. It would therefore be wise for the Government to heed the words of the United Nations—but, more so, to heed those of my noble friend Lord Hendy. ISDS should have no place in our future trade arrangements. I will listen extremely carefully and with great interest to the response from the Minister.

Trade Bill

Lord Hain Excerpts

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Thursday 8th October 2020 Grand Committee

[Baroness Altmann (Con)]

My Lords, I have added my name to Amendments 61 and 62, spoken to so excellently just now by the noble Baroness, Lady Ritchie of Downpatrick. It is a pleasure to follow other noble Lords. These amendments are also supported by the noble Baroness, Lady Suttie, and the noble Lord, Lord Hain. I also support the general aims of the other amendments in this group.

This Bill is particularly concerned with non-tariff trade barriers. Nowadays, regulatory barriers to trade are often the most crucial parts of free trade agreements. When introducing this Bill, my noble friend talked about strengthening and protecting the devolved Administrations. I wholeheartedly agree with these sentiments, and that is indeed what these amendments aim to achieve.

As other noble Lords have said, the Westminster Government have the reserved power to negotiate and sign international trade agreements. However, while standards for manufactured goods may also be reserved, powers over implementation of regulations in areas such as agriculture and food products are matters for the devolved Administrations. In order to be able to implement newly negotiated free trade agreements, the Government surely have a direct interest in including the devolved Administrations, as these amendments seek to introduce into the Bill. Failing to do so could clearly put the union at risk.

Of course, the Westminster Government could ultimately get around refusals by devolved nations to implement the agreed terms of an FTA by coercion. But, if free trade agreements result in battles between London and the devolved Parliaments—with Scotland, Wales or Northern Ireland taking the English Government to court over terms of a trade agreement to which they had not agreed—it is likely that our ability to strike further deals would be called into question. Surely there would be a far greater likelihood of success in future if the devolved Governments were involved at an early stage. I urge my noble friend to take note of how Canada operated when negotiating the CETA deal. It included its provincial Governments in its negotiations, which ensured that any commitments they made were more credible and more easily accepted across Canada.

As the noble Baroness, Lady Humphreys, said, the UK is a “family of nations”. Absolutely. In the modern era, a family is considered to function best when all its members are involved in decision-making, rather than the dictatorial senior parent ordering everybody to obey their wishes and do what they are told. This causes particular strife when, for example, another family member is promised control over certain decisions which affect their daily life and well-being, but then finds that they were misled. Westminster must surely accept the need to include the devolved Governments in areas of such significance. Respecting their needs at an early stage and including them as soon as possible will ultimately result in better agreements.

Can my noble friend explain the Government’s thinking in resisting these amendments? Specifically, in relation to Amendments 61 and 62, reserved powers over international trade are limited by two constraints. I have already mentioned that the implementation of trade agreements for agri and food is devolved. The second is the Northern Ireland protocol. According to this protocol, EU regulations on goods—whether manufactured or agricultural—are supposed to continue to apply in Northern Ireland for the duration of the protocol. Annexe 2 includes the whole EU acquis for product standards. If the EU amends these rules, Northern Ireland is supposed to change, too.

We will come back to the position of Northern Ireland in a later group, but I hope my noble friend will consider these amendments carefully—or his own wording to achieve these aims when we reach Report.

[Lord Hain (Lab) [V]]

My Lords, I echo the words in particular of the noble Lord, Lord Wigley, and the noble Baroness, Lady Ritchie. The noble Lord, Lord Wigley, spoke eloquently about the situation in Wales and the noble Baroness, Lady Ritchie, about Northern Ireland.

Amendments 61 and 62 are also in the names of the noble Baronesses, Lady Ritchie, Lady Altmann and Lady Suttie. I also support Amendment 57, tabled by my noble friend Lord Stevenson of Balmacara. I want to focus on the appalling record which this current Administration have in their approach to the elected, devolved Governments and legislatures of Wales, Northern Ireland and Scotland.

The United Kingdom is currently engaged in what are without doubt the most crucial trade negotiations of the last 50 years: the negotiations about our future trading arrangements with the EU, our largest trading partner. But, unlike most such negotiations, these are not about securing additional benefits for our businesses from a liberalisation of trade: no, the stakes are even higher, because these negotiations are about preventing the introduction of new barriers to trade which all have the potential, even if an agreement is reached, to cripple our manufacturing industry, with a loss of jobs in sectors which are particularly important—for example, to Wales, aerospace and automotive—leaving the devolved Governments with their responsibility for economic development to pick up the pieces.

The negotiations with the EU will also directly impact on issues wholly within devolved competence, such as health and education, since a failure to negotiate mutual recognition of our medicines licensing regime, for example, will lead to increased costs and delays in accessing new treatments, while the failure to secure continued participation in the Erasmus+ programme will impoverish the educational experience of thousands of young people in Wales and indeed across the United Kingdom.

What opportunity have the devolved institutions had to influence, let alone shape, these negotiations? Mike Russell, the Scottish Government’s Constitution Minister, pointed out in June that

“we had virtually no involvement in producing”

the negotiating guidelines or legal text published by the Government,

“and indeed only saw the legal texts—with no possibility of changing them—24 hours before they were published.”

Jeremy Miles, the Minister for European Transition in the Welsh Government, has talked about the

“absence of meaningful Ministerial engagement, where UK Ministers discuss and seek to agree with us not just their formal starting position but the approach they expect to take as the negotiations evolve.”

The Joint Ministerial Committee on European negotiations, whose terms of reference are to “seek agreement” on the approach to the negotiations, did not meet at a key time for preparing for these negotiations between 28 January and 21 May of this year. On top of this frankly insulting approach, the Government have now published their internal market Bill, which not only threatens to break international law—and is proclaimed as doing so—but is an outrageous and outright attack on the very basis of the devolved settlements in this country. That is why there is a great deal of concern in all the devolved Administrations.

In this context, it is surely for us, above all in your Lordships’ House, to stand up for the rule of law and the rights of political institutions that were put in place over 20 years ago to protect and promote the interests of those parts of the United Kingdom, each with a distinct identity and social and economic needs, which had been marginalised by the preceding majoritarian political system. That is why my amendments and others which I shall support, such as Amendments 26 and 50, seek to entrench the role of the devolved Governments and legislatures in future trade negotiations that will inevitably shape, and potentially restrain their freedom to exercise, their powers in respect of issues such as food standards and environmental regulation, which sit squarely within their competence.

The devolved institutions are, quite rightly, obliged to implement international agreements which are entered into by the UK Government, even where the matters involved are otherwise under their control. It cannot be right that they are bound in this way without having any rights to influence the outcome of the negotiations that result in such obligations being imposed on them.

Underlying these constitutional issues is the kind of state the UK wants to be: either one run by diktat from the centre, as Boris Johnson’s Ministers are doing over trade negotiations with the European Union and in this Bill—and especially in the internal market Bill—or one run on the principle of democratic consent and mutual respect for all the Governments: the UK’s and those of the devolved Administrations.

But there are practical policy issues at stake as well, and here are my main concerns. Trade deals today, perhaps with the exception of a future UK-EU one, if there is one at all, extend into a wide range of social provision and domestic policy issues, such as workers’ rights, environmental protection and safety, product and food safety regulations, and procurement. As a result, trade deals are often politically contentious: the more comprehensive they are, the more they are likely to be seen as leading to a loss of regulatory autonomy and democratic accountability. As such, it is wrong to see free trade agreements as purely “business” or “trade” concerns: they reach right to the core of responsible government and public welfare. Many of the areas covered by free trade agreements—for example, agriculture, the environment, forestry, health and economic development —are within the competence of the devolved Administrations.

Trade Bill

Lord Hain Excerpts

Committee stage
Tuesday 13th October 2020 Lords Chamber

Moved by

[Lord Hain]

58: After Clause 2, insert the following new Clause—
“Trade agreement with the EU: compliance with the Protocol on Ireland/Northern Ireland
Any trade agreement between the United Kingdom and the European Union that is subject to sections 20 to 25 of the Constitutional Reform and Governance Act 2010 is not to be ratified unless it fully complies with the requirements of the Protocol on Ireland/Northern Ireland as part of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, as signed and ratified by Her Majesty’s Government.”

[Lord Hain (Lab) [V]]

My Lords, in moving Amendment 58 on the Irish protocol, I will speak to Amendments 59, 65 and 82 in my name, on the Irish Sea, and to the amendments in the names of the noble Baronesses, Lady Altmann, Lady Suttie and Lady Ritchie, to whom I am most grateful for their support. The amendments have been lumped together in one group, so I am afraid that my speech will be a bit longer than is customary for me. I am sorry to say that Amendments 58 and 59 are not just sensible and prudent to include in this legislation; they are absolutely essential, and I will seek agreement to put them to a vote on Report.

When this House was due to debate a Trade Bill prior to the general election last year, my colleagues and I worked on similar amendments with a similar objective: to protect the Good Friday/Belfast agreement in all its parts and prevent a hardening of the border on the island of Ireland. A year ago, this was already a strong case. It was also consistent with the European Union (Withdrawal) Act, which is already law and into which this House placed important text along the lines of these amendments, with the eventual agreement of the Government. I hope that the Minister will note that in his reply. However, today—one year on—including these additional protections could not be more important for this Bill and for the Internal Markets Bill, on which we will have Second Reading on 19 October.

I remember only too well the Government’s responses to myself and colleagues on a cross-party basis in 2018 and 2019 as we sought explicitly to include these protections for Northern Ireland and the island of Ireland. “Trust us”, they said. “Of course, we will protect the Good Friday agreement, and of course we will ensure no hard border”, they insisted. “This is superfluous and unnecessary”, we were told.

I am sorry but we did not trust them then and we definitely do not trust this Government now—not after their actions in recent weeks. We thought that they could not get any worse in their cavalier and dangerous approach to Northern Ireland—part of our United Kingdom—but they have surpassed themselves. As noble Lords will know, I had the honour to serve as Secretary of State for Northern Ireland, as did other noble Lords. It was a real privilege to hold that office. Those of us who have served, whether Labour or Conservative, know how unique and ever-fragile matters are on the island of Ireland.

The peace process is not done and dusted—it remains a continual challenge. That is why I and other previous Secretaries of State were so horrified when the current holder of that important office, Brandon Lewis, nonchalantly and very deliberately let it slip in the other place that the internal market Bill

“does break international law in a limited and specific way”.—[Official Report, Commons, 8/9/20; col. 507.]

Tellingly, among those expressing their horror were Secretary of State Lewis’s two immediate Conservative predecessors, Julian Smith and Karen Bradley. Add to that multiple previous Prime Ministers and Attorneys-General, not to mention the Northern Ireland envoy of the current President of the United States, the Democratic nominee for President of the United States and the Speaker of the House of Representatives.

We must vote decisively to add the provisions in these amendments to this Bill, soon to the internal market Bill, and to any other relevant Bill that comes before us. The Government may not respect the law any more, so the law must tie the Government’s hands appropriately. We must leave no stone unturned, no route open to them to wriggle out of. I regret to put it so firmly, but I am afraid that that is what we are dealing with. Even without the developments of recent weeks, we need Amendments 58 and 59. We have included a specific obligation to fully respect and implement the protocol on Ireland and Northern Ireland, as included in the withdrawal agreement that this very Government agreed, and this Parliament ratified.

As I have said here before, sadly, this Prime Minister, his Ministers and advisers, continue to try to pretend that Northern Ireland is no different from anywhere else—that it is just another border, just another straightforward place. I might have given Kent as an example of a straightforward place but, of course, we now know that the Government are actively preparing for a hard border there too.

Let us remind ourselves why we have the Northern Ireland protocol. The border, of course, is the key sensitive issue, over which much blood has been spilt over the generations, and much suffering endured. It is a 300-mile border with 300 crossings, unlike almost any other border in the world, but there is more to the protocol than the border. We have the unique arrangements under the Good Friday/Belfast agreement for north-south co-operation—no less than 157 different areas of cross-border work and co-operation in Ireland, north and south.

These areas are the things of everyday life; they go well beyond animals and food and we must not ever have a new border erected to block or discourage them. People can travel to and fro, do business, get educated or get health treatment, as if the border were invisible. I shall give just a few examples of these arrangements: food, tourism, schools, colleges, farming, fighting crime, tackling environmental pollution, water quality and supply, waste management, bus services, train services, cancer care, GPs and prescriptions, blood transfusions, gas supply, electricity supply and, yes, co-operation on health pandemics as well.

Almost every one of these areas is about people’s everyday lives and almost all were linked to the European Union, and Ireland’s and the UK’s common membership of it since 1973. With regret, I accept the reality that we have left the European Union, but that is precisely why we have this Irish protocol: to ensure there is no interference with or disruption to those arrangements, either through no deal, reneging on the protocol or any new trade agreements we may someday strike with other partners. For if there were to be, it would be a major step backwards, making the Irish border a contentious matter again, with all the danger to peace and stability that that will mean. We must prevent that happening at all costs.

I have said it in your Lordships’ House before and I will say it here again: the work of successive UK and Irish Governments in helping courageous and visionary leaders in Northern Ireland was all about taking down borders, not putting them up. These amendments would ensure that our Government stay true to that vital mission.

I turn to Amendments 65 and 82, covering the Irish Sea question. Northern Ireland faces great uncertainty as we exit the transition period. Although the Northern Ireland/Ireland protocol in the withdrawal agreement guarantees Northern Ireland free access to and from the single market of the European Union for goods, three areas of grave concern still exist. The first is what the future UK-EU relationship will look like; the more distant this is, especially if there is no deal, the greater the impact of the protocol when it comes to the movement of goods from Great Britain into Northern Ireland. This means that internal UK trade is potentially in play here; this is why it has been picked upon by the United Kingdom Internal Market Bill, but in a way that only increases the risk to that slim certainty that Northern Ireland had, and only increases the likelihood of no deal and of badly damaged trust.

Secondly, there is uncertainty about how the protocol will operate in practice. The trader support service is a vital element in this operation, but there are still some 60 “known unknowns” when it comes to how the protocol is to be enforced. The doubt instigated by the Government’s move in the internal market Bill escalates concerns from merely being about practice to being about the very legal status of this protocol itself.

Thirdly, there is uncertainty about Northern Ireland’s status with regards to free trade agreements. Although it will be de facto in the European Union’s customs union and single market, it looks as though Northern Ireland will not benefit from the free trade agreements held by the EU. This could prove to be severely disruptive to its export markets. More directly, there are worries that, for all the promises of the Government, Northern Ireland will be effectively excluded from the UK’s future free trade agreements too. While your Lordships’ House can do little to affect the first of these three concerns, Amendments 65 and 82 seek to address the other two.

Amendment 65 would ensure that Northern Ireland goods are not discriminated against. The UK has said that Northern Ireland will benefit from access to its new free trade agreements. This makes sense, on one hand, because Northern Ireland is in the UK customs territory. However, it is not straightforward, because the EU customs code will be applied in Northern Ireland, as will its standards for the production of goods. As a consequence, there is a possibility that when it comes to free trade agreements, a potential free trade agreement partner will say, “Hang on, what’s the story with Northern Ireland? Why will our goods have to go through customs procedures to get into it, and why do EU goods have free access into Northern Ireland, and thus potentially unfettered access into Great Britain?” These things make it difficult to deal with the UK as a single entity. What will the UK do in such a scenario and in response to such a free trade agreement negotiating partner?

There is a risk that Northern Ireland will not be included in future UK free trade agreements, or that there will subsequently be discrimination against Northern Ireland goods, or even new customs processes when entering Great Britain. This is a particular risk as long as there is no serious anti-avoidance regime to stop Republic of Ireland or EU goods passing off as Northern Ireland goods and thus getting free access into Great Britain, undermining ones from the rest of the world. Even more fundamentally, there is a question about the status and labelling of Northern Ireland goods, because these have to follow EU rules on labelling as well, of course, as on standards. Because Northern Ireland goods will be produced in accordance with EU rules under the Ireland/Northern Ireland protocol, this amendment would ensure that Northern Ireland goods, in particular, will not be discriminated against as a consequence of any new UK free trade agreements.

Ministers often pooh-pooh these concerns, but take the very practical example of a perfect storm coming in Northern Ireland when it comes to food poverty. This is because of increase grocery costs for goods coming from Great Britain, especially for those in rural communities reliant on small retailers. Add to that jobs lost from the coronavirus pandemic and the growing numbers on universal credit—up from 58,000 in February this year to 108,000 in May and, I guess, more since—which is proven to increase food poverty, as any families living on universal credit can testify.

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[Viscount Younger of Leckie (Con)]

My Lords, the amendments in this group all relate to various aspects of the Northern Ireland protocol. Amendments 58 and 59, tabled by the noble Lord, Lord Hain, the noble Baronesses, Lady Suttie and Lady Ritchie of Downpatrick, and my noble friend Lady Altmann, seek to make the ratification of any future UK-EU international trade agreement contingent on compliance with the protocol. I listened very carefully to the hard-hitting and long speech from the noble Lord, Lord Hain. I am very aware that he speaks passionately on Northern Ireland matters as an ex-Secretary of State for Northern Ireland and that he spoke again today with great passion. We have been clear that we remain completely committed to the Belfast/Good Friday agreement. We are committed to implementing the protocol in a flexible and proportionate way, protecting the interests of both the whole United Kingdom and the EU.

Our proposals for implementing the protocol will deliver unfettered access for Northern Ireland businesses to the whole of the UK market, ensure that there are no tariffs on goods remaining within the UK’s customs territory, discharge our obligations without the need for any new customs infrastructure for Northern Ireland, and guarantee that Northern Ireland businesses benefit from the lower tariffs that we deliver through our new free trade agreements with third countries. This approach is, in our view, the best route for commanding the broadest possible support across the whole community in Northern Ireland, respecting the myriad ways in which lives and livelihoods are intertwined right across our United Kingdom. This came out, again, in the speech by the noble Lord, Lord Hain.

The Bill that we are debating here does not address the UK’s future relationship with the EU. Other than the government procurement agreement, it is concerned only with continuity agreements: that is, agreements to which both the EU and the relevant third country were signatories before exit day. While I understand the noble Lord’s concerns, there will be better opportunity to debate them elsewhere. In accordance with the Constitutional Reform and Governance Act, both Houses will have the opportunity to debate any UK-EU future trade agreement before it is ratified. Similarly, as the noble Lord, Lord Hain, acknowledged—and the reasons were eloquently outlined in the speech of my noble friend Lord Lansley—noble Lords will soon have a chance to debate their concerns regarding the protocol when the United Kingdom Internal Market Bill reaches this House all too soon, on Monday, for scrutiny.

I turn now to Amendment 60, in the name of the noble Lord, Lord Hain, the noble Baronesses, Lady Ritchie of Downpatrick and Lady Suttie, and my noble friend Lady Altmann. As I set out during our debate last week on devolution, the Government have engaged closely with the devolved Administrations and have taken significant steps to improve this Bill. I hope this was made clear in the remarks that I made last week. I would like to take this opportunity to inform your Lordships that the Scottish Parliament consented to grant an LCM to the Trade Bill last week. I hope that this illustrates the close engagement that the Government have undertaken and will continue to undertake with the devolved Administrations.

On Amendment 65, the Government will ensure unfettered access for Northern Ireland goods moving from Northern Ireland to Great Britain, ensuring that businesses and individuals will be able to move goods from Northern Ireland into the rest of the United Kingdom on the same basis as now, while also benefitting from new trade deals. The United Kingdom Internal Market Bill will ensure that businesses based in Northern Ireland have true unfettered access to the rest of the United Kingdom by ensuring that they benefit from mutual recognition and are not discriminated against. This will be the case whatever the outcome of negotiations with the EU.

On Amendment 82, in the name of the noble Lord, Lord Hain, the noble Baronesses, Lady Ritchie and Lady Suttie, and my noble friend Lady Altmann, I am pleased to say the new Trader Support Service—the so-called TSS—that the Government are introducing, will provide an end-to-end service that will guide traders through all import processes. It will provide extensive support to businesses engaging in new administrative procedures resulting from the unique circumstances in Northern Ireland. It is a free service available to all traders moving goods between Great Britain and Northern Ireland and those importing goods into Northern Ireland from the rest of the world.

In response to various questions on TSS, I shall give a little more detail. It will offer the following core services. The TSS will benefit trader education by educating businesses about what the protocol means for them and the steps they need to take to comply with them. Secondly, it will support businesses when submitting declarations and advise them about additional documents and licences they will need; for example, a permit is needed to import endangered species. It will provide a complete service that submits relevant declarations into CDS, submits relevant safety and security declarations into HMRC’s import control system, the ICS, and in some circumstances will transmit transit declarations on NCTS.

In answer to the question asked by my noble friend Lord Lansley, the TSS and its future will be reviewed after two years. My noble friend Lady Noakes asked about costs. She will know, and I want to emphasise, that the TSS is a unique intervention, backed by £200 million of government funding.

I hope that these explanations address your Lordships’ concerns and that they will not wish to press their amendments.

[Lord Hain (Lab) [V]]

My Lords, I am grateful to my noble friend Lord Stevenson and all those who have spoken in this debate, beginning with my noble friend Lady Ritchie, who speaks with authority as someone affected daily by our decisions in this Parliament. She spoke eloquently about the intricate relationships so carefully and painstakingly built over decades to break down barriers. We must not do anything that reverses that process.

The noble Lord, Lord Lansley, said that he agrees with Amendment 58, but that it is not necessary because it is already in the European Union (Withdrawal Agreement) Act 2020. The noble Baroness, Lady Suttie, rightly argued that in the internal market Bill a part of the protocol is being repudiated. I say with some sensitivity and moderation to the noble Viscount, Lord Younger, that there is a lack of trust regarding the Northern Ireland-Irish protocol situation that has been engendered by the Government themselves.

The Government signed up to a protocol that they are now seeking to undermine through the internal market Bill, breaching international law and breaching trust with Dublin so painfully built over careful decades of negotiation and relationships. The relationship between Dublin and London now is terrible, and I can totally understand that as a former Secretary of State for Northern Ireland. We should never have got into this situation. As the noble Baroness rightly says, it is ironic that a group of cross-party Peers is having to defend what is nominally the Government’s own policy but which they are undermining. That is why these amendments are absolutely necessary.

The noble Baroness, Lady Noakes, said the Trader Support Service would be extended if needed, so why not put it in the Bill through the amendments concerned? If there is a technical issue, the Minister can come back on Report and propose the addition of a regulation allowing the Government to extend it. Presently, it is limited to two years. I am puzzled about the Minister’s response. Effectively, he is saying that he agrees with these amendments in principle, but that on the one hand there is no need for them and on the other there is an opportunity for them later. I say gently to him that there is always supposed to be an opportunity later, but the reality is that by the time later comes it is too late. A trade deal may not have been struck with the EU and the consequences will already be a fait accompli.

Trade Bill

Lord Hain Excerpts

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 6th January 2021 Lords Chamber

Moved by

[Lord Hain]

17: After Clause 2, insert the following new Clause—
“Trade agreement with the EU: compliance with the Protocol on Ireland/Northern Ireland
Any trade agreement between the United Kingdom and the European Union that is subject to sections 20 to 25 of the Constitutional Reform and Governance Act 2010 is not to be ratified unless it fully complies with the requirements of the Protocol on Ireland/Northern Ireland as part of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, as signed and ratified by Her Majesty’s Government.”

[Lord Hain (Lab) [V]]

My Lords, I will move Amendment 17 and speak to Amendment 18. Both on the Irish border and have been largely superseded technically, if not in spirit, by the December deal. I will also speak to Amendment 26 on the Irish Sea, on which I will seek leave to divide, with the permission of your Lordships’ House. I am grateful for the support of the noble Baronesses, Lady Altmann, Lady Suttie and Lady Ritchie, the noble and right reverend Lord, Lord Eames, and the noble Lord, Lord Cormack.

First, I will address Amendments 17 and 18 on the Good Friday agreement and the Irish border. As I have argued before, both on this Bill and on other Brexit-related Bills, I am profoundly convinced that the objectives of Amendment 18 are absolutely essential to provide for full protection for the Good Friday/Belfast agreement in all its parts, and, as part of that, to prevent a hardening of the border on the island of Ireland. Very importantly, the amendment is also consistent with, and indeed complementary to, the European Union (Withdrawal) Act, into which this House placed important text along similar lines to Amendment 18, with the eventual agreement of the Government in the other place at the final stage.

There is now agreement between the UK and the EU on how to implement the Irish protocol, which is fully incorporated in the December deal, but we must help the Government to keep to their word and stated commitment to the Good Friday/Belfast agreement, not least—crucially—when negotiating future trade agreements.

The future relationship agreement, negotiated just before Christmas, thin though it is, at least removes the question of tariffs from the long list of barriers that Brexit has put up around this country. Those of us who have served as Secretary of State for Northern Ireland, whether Labour or Conservative, know how politically unique and ever-fragile matters are on the island of Ireland.

Amendment 18 is consistent with our international legal obligations. In fact, it will help with trade negotiations, because our potential trading partners will know where they stand and what the parameters related to the protocol are, and it would therefore be good to hear the Minister uphold the principles within the amendment when he replies, even if technically its drafting is now outdated because of the deal struck in December.

Let us remind ourselves one more time why we have the Northern Ireland protocol. The border is the key sensitive issue: it is 300 miles long, with 300 crossings, unlike almost every other border in the world. Of course, there is more to the protocol than the border. We have the unique arrangements under the Good Friday/Belfast agreement for north-south co-operation: no less than 157 different areas of cross-border work and co-operation in Ireland, north and south.

I have said it before here and will say it again: the work of successive UK and Irish Governments, in helping courageous and visionary leaders in Northern Ireland, was all about taking borders down, not putting them up. It is vital that the United Kingdom and its Government keep in line with that. No new international trade agreement between the United Kingdom and another nation must ever be ratified unless it is compatible with the Good Friday agreement and Northern Ireland Act 1998, is fully compliant with the protocol on Ireland/Northern Ireland, does not negatively affect any form of north-south trade in goods and services, and does not create physical infrastructure related to customs checks, customs or regulatory compliance checks. These are all things that Ministers say they agree with, and they are contained in Amendment 18.

I turn to Amendment 26, on the Irish Sea, on which, as I said, I will seek to divide. It is designed to ensure unfettered market access for goods moving between Northern Ireland and other parts of the United Kingdom’s internal market, and unfettered market access for services between the two. It is also designed to ensure that there are no tariffs or customs procedures for goods originating in Northern Ireland that are entering Great Britain so that there is no discrimination against Northern Ireland’s businesses.

We had significant progress last month in the meeting of the co-chairs of the UK-EU joint committee, which was most welcome and not before time. That “agreement in principle” was to implement the protocol on Ireland/Northern Ireland in a way that reduces potential friction and burdens on businesses come 1 January. However, the protocol is not an event but the environment or a process in which Northern Ireland’s economy will have to develop, and many uncertainties remain for Northern Ireland’s businesses, which have suffered huge stress because of that over the past year, and in many respects are still suffering.

The conditions of Northern Ireland’s economic development will be directly affected by the UK’s trade deals to be sought and negotiated with other countries beyond the European Union. This is not just by virtue of its access to those free trade agreements; it is also by virtue of the potential consequences of those deals on Northern Ireland’s place in the UK internal market.

The protocol that was agreed and ratified as part of the UK’s withdrawal agreement puts Northern Ireland in a wholly new position. It is a unique set-up in terms of global trade, let alone a distinctive arrangement with the European Union. The protocol text makes it clear that there are significant limitations and boundaries to its scope, most particularly when it comes to trade. Article 4 states that

“nothing in this Protocol shall prevent the United Kingdom from including Northern Ireland in the territorial scope of any agreements it may conclude with third countries”.

Article 4 also states that

“nothing in this Protocol shall prevent the United Kingdom from concluding agreements with a third country that grant goods produced in Northern Ireland preferential access to that country’s market on the same terms as goods produced in other parts of the United Kingdom.”

Furthermore, Article 6 of the protocol states that there is nothing in it that would prevent

“the United Kingdom from ensuring unfettered market access for goods moving from Northern Ireland to the rest of the United Kingdom’s internal market”—

as this amendment states. Those restrictions on the scope of the protocol put the onus squarely on the United Kingdom to deliver such things for Northern Ireland—access to the UK’s free trade agreements and unfettered access to the markets in Great Britain.

However, what the protocol does not and cannot do is ensure that there is no discrimination against Northern Ireland, and no knock-on consequences for its place in the UK’s internal market when it comes to the UK’s future trading relationships.

We saw with the recent UK-Japan free trade agreement an acknowledgement that there could be an “inconsistency” between a free trade agreement and the protocol. Thankfully, in the case of the UK-Japanese deal this will be minimal, because—I stress this—of the pre-existing conditions of the Japanese trading partnership with the EU. It was much easier to protect Northern Ireland’s situation in this new Japan-UK deal because the Japan-EU deal meant that Japan could offer “full extended cumulation” in its deal with the UK: it could count all goods with EU origins, and even those part-processed in the EU, as being from the UK. This helps to keep Northern Ireland, which is producing to EU standards, in the ring.

These conditions, however, will not be the same for many future free trade agreements. It is quite conceivable that differences between the UK’s rules and the EU’s rules in trading with any particular country could bring friction for Northern Ireland, both on the entry of its goods into Great Britain and on the entry of goods from Great Britain into Northern Ireland. Given these risks, it is quite extraordinary that the UK Government’s own impact assessment on the UK-Japan free trade agreement explicitly acknowledges that it did

“not explicitly take account of any impacts arising from the Protocol on Ireland/Northern Ireland”.

Amendment 26 is necessary for four main reasons. The first is the distinctiveness of Northern Ireland’s economic and trading position under the deal. The second is its dependence on the commitment of the UK to delivering on filling the gaps in its trading arrangements. The third is the possibility of tensions between the terms of new UK free trade agreements and Northern Ireland’s position in the protocol. The fourth and final reason is the failure of the UK Government, in their most substantial non-EU free trade agreement to date—with Japan—to give due consideration to this matter.

We can be sure that the economic and trading environment for Northern Ireland—de jure in the UK’s customs territory, but applying the European Union’s customs code—will become only more complicated over time. It is therefore absolutely essential to put protections for Northern Ireland into UK domestic law that ensure that government commitments to this most vulnerable of UK regions are upheld and secured, even as the tough decisions and pay-offs in international trade negotiations become an increasingly familiar reality.

The same applies to services as to goods. Though they were not covered by the protocol—or by the deal struck with the EU before Christmas—and are often not included in free trade agreements, we must ensure that there is no discrimination against services either, because they are a very important part of both the Great Britain and Northern Ireland economies. I therefore urge your Lordships to support Amendment 26, on unfettered access for Northern Ireland, when the House divides.

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[The Deputy Speaker (Baroness Morris of Bolton) (Con)]

I have received no requests to ask a question of the Minister, so I call the noble Lord, Lord Hain.

[Lord Hain (Lab) [V]]

My Lords, I am very grateful to all the speakers. Perhaps I could single out my noble and right reverend friend Lord Eames for his powerful and passionate exposition of the worries in Northern Ireland at the moment, especially those of its businesses that face a very uncertain, stressful future.

Amendment 26 especially is a very live issue in Northern Ireland, as my noble friend Lady Ritchie of Downpatrick emphasised; she quoted the examples of hiccups over supply from Tesco and Sainsbury’s. Northern Ireland’s businesses feel they are left high and dry at present, as the noble Baroness, Lady Suttie, emphasised so compellingly, and as my noble friend Lord Wigley said about Holyhead and the hiccups around that, in terms of trade across the Irish Sea with the Republic of Ireland.

I am afraid that there is a reality gap between ministerial assurances, as we have heard so decently from the noble Viscount, Lord Younger of Leckie, and what is happening on the ground. For example, the noble Baroness, Lady McIntosh, made it clear that unfettered access is not in place, especially for agri-food products and others. With great respect to the noble Baroness, Lady Neville-Rolfe, Amendment 26 is about this Bill. As the Japan deal—a rollover deal—shows, these free trade agreements which will take place in the future could still affect Northern Ireland negatively, regardless of the assurances given. It is important to put this principle of unfettered access in statute in this Bill, which is about future free trade agreements.

I thank the noble Viscount, Lord Younger of Leckie, for his assurances—absolutely compellingly meant, I am sure—on the Irish border and the Good Friday agreement. But I am extremely disappointed, as many in Northern Ireland and especially in its business community will be, that the Government will not accept what they profess to uphold: the principle of unfettered access for Northern Ireland’s businesses contained in Amendment 26. Although I will withdraw Amendment 17, I will divide the House on Amendment 26 when the time comes.

Amendment 17 withdrawn.

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Moved by

[Lord Hain]

26: After Clause 2, insert the following new Clause—
“Northern Ireland: non-discrimination in goods and services
(1) Any trade agreement between the United Kingdom and any other party that is subject to sections 20 to 25 of the Constitutional Reform and Governance Act 2010 is not to be ratified if anything in the agreement prevents the United Kingdom from ensuring unfettered market access for—(a) goods moving between Northern Ireland and other parts of the United Kingdom's internal market,(b) services provided by a service provider in Northern Ireland to customers in other parts of the United Kingdom, and(c) services provided by a service provider in another part of the United Kingdom to customers in Northern Ireland.(2) Regulations under section 2(1) may not impose any tariffs or any requirement of customs procedures for goods originating in Northern Ireland which are entering Great Britain, or discriminate, either directly or in effect, in relation to such goods entering Great Britain as compared to other goods being traded within the United Kingdom.”

[Lord Hain (Lab) [V]]

With permission, I move Amendment 26 and seek to divide the House.