Trade (Australia and New Zealand) Bill

Lord Kerr of Kinlochard Excerpts

Committee stage
Monday 23rd January 2023 Lords Chamber

[Lord Johnson of Lainston (Con)]

I thank the noble Lord for his comments. This is one reason why we are pressing ahead with the Bill: it is part of the process that will lead to the agreement coming into force. I will cover this later in Committee, I am sure, but there are other legislative acts that need to be brought into force, to enable the entire agreement to function, at which point we will have the entry into force of the FTA—a moment we are all, frankly, much looking forward to.

[Lord Kerr of Kinlochard (CB)]

Before the noble Lord sits down, can I ask him about his reassurance to the noble Lord, Lord Lennie, on Amendment 1? He said we need not worry about Clause 1(2) because Clause 1(1) can be used only in cases arising from these two trade agreements. I think I follow the Minister’s argument—until I turn to Clause 2. Clause 2 seems extremely permissive and says one can make provision, general or specific, or

“make provision for different purposes or areas”.

Can the Minister expand on his assurance to the noble Lord, Lord Lennie, and assure me that the Bill as a whole, not just Clause 1(2), cannot be used for purposes other than to deal with cases arising as a result of the two free trade agreements?

[Lord Johnson of Lainston (Con)]

I thank the noble Lord for that intervention. I think I have made my position clear that any concomitant actions following on from this Bill will relate specifically to the matters necessary for bringing it into force. Pursuant powers—this is an important commitment—are very much linked to what we would describe as minor and specific issues. They could relate to changes in government departments’ names, such as the Department for Culture, Media and Sport adding “Digital” to its name. The effective implementation of that in the agreements is relevant in these texts, so it would be confined to errors such as that. I know that we will discuss the concept the noble Lord raised regarding Scotland later in Committee, so I will be delighted to go into more detail on that then.

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[Lord Lansley (Con)]

My noble friend simply makes the point that the Government should implement the legislation that exists. We have no need to change the legislation to ban the import of hormone-fed beef or the use of hormone growth promoters on beef imported into this country, since the legislation already exists. The point is its implementation—and messing about with this Bill does not change that at all.

I have one final point. As I turn to the CPTPP and sheep farmers, I should say that my sister-in-law is a sheep farmer in north Wales. She may take a view about the New Zealand agreement, principally because of lamb imports, but she has never mentioned it to me. She probably thinks that it is a pretty remote risk compared with the many risks that she has to put up with on a daily basis.

I am UK chair of the UK-Japan 21st Century Group; my noble friend Lord Howell, who is sitting on the Front Bench, was one of my predecessors. My Japanese friends tell me that we are making good progress on our potential accession to the CPTPP. There are clearly issues. In this context, if one were critical of the Government, it would be on the risks associated with the precedent of tariff liberalisation—to the extent that it was offered in these agreements—being used by other counterparties as a basis for their negotiations, not least through the CPTPP. They may seek that in the schedules that they are looking for from us before we are allowed to accede to the CPTPP. Notwithstanding that reservation, in the view of my Japanese friends, other aspects of the negotiations stand a fair chance of being completed in the first half of this year.

On the basis of what the Government have already said about impact assessment and reporting in the future, I think the amendments in this group in particular are not required.

[Lord Kerr of Kinlochard (CB)]

My Lords, I rather agree with the noble Lord, Lord Lansley. There are two points to bear in mind, particularly about the agricultural concern. First, Australia is a very long way away; and, secondly, the big market for Australia and New Zealand is due north of them in East Asia, not over here.

I do not see even the hill farmers in Britain suffering seriously. I do not think that this will be a major target market for Australia and New Zealand. Let us remember the scale. This is a very marginal agreement. It is not a bad deal, but it is certainly not a big deal. It will not change much in our economy; even on the Government’s own estimates of the increase in GDP that might result as a consequence of these two agreements, it is really marginal.

So I am very doubtful about calling for a raft of impact assessments; it seems to me that that is not really necessary. The one amendment that might be necessary is Amendment 18, in the name of the noble Lord, Lord Purvis of Tweed, which takes us back to procurement standards. I can see a case for that, but not for looking sectorally across the agreements and calling for impact assessments in every case.

It would be reassuring if the Government could say something about the non-precedential nature, in their view, of the agricultural agreements with Australia and New Zealand. We read that the Canadians and the Mexicans are pricking up their ears and asking for the same terms that we have given to Australia and New Zealand. Those countries are much closer, and a major target market for both is Europe. If one were to look beyond them to, say, Brazil, Uruguay or Argentina, then I would say that the hill farmers in Britain would have a real reason to be concerned, if the Government were to follow the precedent of their deal with Australia and New Zealand, which is going to come in slowly, over time, and will be pretty marginal in its economic effects. If that were to be applied to trade with Canada, Mexico, Brazil, Uruguay and Argentina, there would be very serious effects on UK agriculture.

What we most need from the Government is not an impact assessment of the effect of the deals that they have done but an undertaking that, since very different considerations would apply, they would do very different deals with other future partners.

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[Lord Lennie (Lab)]

My Lords, I will speak to Amendment 10 and Amendments 20 to 35 in this group, which are consequential to it.

As the UK Government have prerogative powers to negotiate international agreements, Parliament has limited scope to make substantial changes to such an agreement, not least as it has already been formally signed, and opportunities to block ratification are therefore limited. As a result, it is of concern to see the Government waiting so late in the day before tabling the agreement to meet the statutory 21-day scrutiny period. It was not tabled until 15 June, which limited the time available for Members to scrutinise the Bill and for the International Trade Committee to publish its report. The Secretary of State for International Trade also failed to attend a meeting of the International Trade Committee to answer questions on the agreement on 29 June, despite a commitment to do so. This made it impossible for the committee to take account of her evidence on the new agreed date, 6 July, and still publish the report before the end of the scrutiny period.

Furthermore, it is shameful that Ministers have taken such a long time to conclude negotiations and long ago signed the trade deals but have not appeared before Parliament to give a full account. Ministers have been granted significant powers in the trade negotiations. The Labour Party will continue to push for more and wider scrutiny, so that parliamentarians and wider groups can properly impact on the process.

To help achieve this, our Amendment 10 and those that are consequential to it would bring in the super-affirmative procedure where an instrument is, or, as the case may be, regulations are, subject to the super-affirmative procedure. Under the super-affirmative procedure, a Minister presents a proposal for a statutory instrument and an explanatory statement. Committees in the House of Commons and House of Lords consider the proposal and can make recommendations. The Minister can then formally present or lay a draft of the statutory instrument under the affirmative procedure. We consider this necessary due to the limited other opportunities for scrutiny that come from legislation stemming out of negotiations, not least with the Procurement Bill changes that will limit this further and the Government’s steps to avoid scrutiny.

Our other amendments would implement some of these steps individually, such as requiring draft regulations to be laid in advance, but without the requirement for committee consideration that the super-affirmative procedure would bring. Amendments 34 and 35 would sunset the ability to make regulations, either two years after the Bill passes or on the UK’s accession to the CPTPP—which the Government said would happen last year.

[Lord Kerr of Kinlochard (CB)]

My Lords, I have considerable sympathy with those who argue that the regulatory procedure is insufficient for looking at these regulations for all the familiar arguments, which I need not go into.

Our role in the House of Lords in relation to the negative procedure is nugatory. I do not think that that is quite right. The matters we are discussing are quite important, so I support Amendment 20. Part of my concern is that I am worried about Clause 2 itself. I have mentioned this before. I would be very grateful if the Minister would construe what Clause 2(1)(a) means. It says that:

“Regulations under section 1 may … make provision for different purposes or areas”.


What does “different” mean? Looking at it, I see that regulations under Section 1 must be provisions to implement the procurement chapters of these two agreements. So what are the “different purposes” mentioned in Clause 2(1)(a)? This is rather permissive drafting. I want to know what “different” means. Could “different” mean going beyond the scope of the procurement chapters in the free trade agreements with Australia and New Zealand? If it does mean that, we are giving the Government a pretty wide power in Clause 2. If it does not mean that, why is it necessary to have the language at all?

[Lord Johnson of Lainston (Con)]

My Lords, I thank all noble Lords for their comments. I am delighted to respond to the thoughtful contributions we have heard—from the noble Lords, Lord Lennie and Lord Kerr, and my noble friend Lady McIntosh—on the issue of scrutiny and how regulations made under the Bill will be made.

Before I focus on the amendments themselves, I would like to draw attention to the beautifully short report published by the Delegated Powers and Regulatory Reform Committee on this Bill, on 11 January. Unlike my previous response, as has been alluded to, it was extremely short. The committee found that there was nothing to note on this Bill’s use of delegated powers. The Government are of course extremely satisfied that the committee is content with the use of the negative procedure in the Bill.

I reiterate that the Bill is required to implement two free trade agreements that Parliament has already scrutinised. The scrutiny process under the Constitutional Reform and Governance Act was completed for the Australia FTA in July 2022 and for New Zealand in December 2022. We engaged extensively with Parliament throughout the negotiation process. For these deals, this included eight public progress reports during talks, including extensive information published at agreement in principle, and 12 sessions with the International Agreements Committee and the Commons International Trade Committee, both in public and in private with Ministers and/or officials, before and after signature. There were nine ministerial Statements—three oral and six written—and eight MP briefings, plus one on the Trade (Australia and New Zealand) Bill.

A programme of statutory instruments has been put in place to implement the agreements to ensure that the UK is not in breach on its entry into force in the following areas: rules of origin and tariffs, intellectual property, government procurement, immigration rules changes, and, for the New Zealand FTA only, technical barriers to trade.

The Government have long acknowledged that, due to their length, complexity and importance, FTAs warrant a bespoke framework of scrutiny, and our full range of commitments is contained within the exchange of letters conducted last year between my predecessor, my noble friend Lord Grimstone, and the International Agreements Committee.

I turn to the specific issues raised by these amendments. It is the Government’s view that the amendments would require disproportionate scrutiny of the regulations to implement what Parliament has already had the opportunity to scrutinise, including through noble Lords’ scrutiny of this Bill. As it may be of interest to noble Lords, I can commit to sharing the draft procurement SIs ahead of Report. They will be in a draft version subject to change, due to consultations, as noble Lords can imagine, legal checks and recognising that the Bill is still undergoing scrutiny by your Lordships’ House. I hope that the noble Lord, Lord Purvis, is satisfied by that.

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[Lord Johnson of Lainston (Con)]

I thank my noble friend for those comments, and I will be happy to respond to both questions in writing. She raises the very important point that, to have security and trust in these free trade agreements, we need to know that they are properly policed and monitored. I am completely with her on this, and I hope the reassurances I have already given will be seen as significant and can be passed on to my noble friend in the detail that she requires.

If I may come to a conclusion, I thank noble Lords again for their contributions, but I hope I have demonstrated that these amendments are not necessary, and I hope that I have provided further reassurance to noble Lords today. I therefore ask that the amendments not be pressed.

[Lord Kerr of Kinlochard (CB)]

I still have not heard what “different” means in Clause 2(1)(a). I do not need to know now, but if I do not hear by Report, I shall be tempted to join the noble Baroness, Lady McIntosh, in arguing that Clause 2 should not stand part of the Bill.

[Lord Johnson of Lainston (Con)]

I appreciate the comment made by the noble Lord. I am told that it refers to Clause 1(1)(b), which says,

“otherwise for the purposes of dealing with matters arising out of, or related to, those Chapters.”

I am happy to have a more detailed conversation with the noble Lord about the specifics of the Bill at a later stage. As the noble Baroness mentioned, I have offered to all Members of this House to have one-to-one or group discussions about the agreement, and I have kept my diary open, but the meeting that I was so looking forward to last week was cancelled due to no one attending. I hope the next meeting that I arrange will have a few more people coming, since I look forward to the debate and am happy to be specific about the details.