Trade etc. in Dual-Use Items and Firearms etc. (Amendment) (EU Exit) (No. 2) Regulations 2019

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Wednesday 8th May 2019 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, there may be a slight feeling of “mea culpa Wednesday” when people read through today’s proceedings in Hansard. However, we are grateful to the noble Earl for picking up this issue at the first opportunity since his noble friend Lady Fairhead stepped down. She sent me a very kind email yesterday, indicating that she was stepping down. I wish to put on record how much all of us across the House enjoyed working with her on the Trade Bill and on these issues of international trade. I hope that the noble Earl can forward those remarks to her.

This issue is necessary, and there will be no opposition from these Benches to what the noble Earl has indicated. We are very grateful to him for clearly outlining the actions taken by the Government in correcting the errors in the original drafting and in ensuring that there is no gap in the annexe that he outlined would need correcting. However, in terms of preparedness, this continues to damage our reputation for good governance. There was the botched deadline of 29 March; it was known that defective legislation would be on the statute book and that further legislation would have to be put forward to correct it, which this does; advice to businesses was published and then withdrawn; and, to some extent, continuing concerns on operability were not addressed.

Given that this issue impacts on defence and security industries, and is linked to organised crime and non-state actors, as well as human rights and our adherence to international obligations, while it is reassuring that there would be no gap because we have not yet left the European Union—and will not do so without any agreement —there are people who will look for any gap in any legislative coverage, including those within who do not have the best interests of our country at heart. Therefore, the prospect that there could have been gaps is quite alarming. In the other place, the Minister, Graham Stuart, said when he moved this measure that any gap in competent legislation would put us in breach of international obligations. I accept the seriousness with which the noble Earl has brought this forward.

I shall ask two questions, which I hope the noble Earl can address. First, Regulation 3(27)(d)(iv) amends annexe IIe of the European regulations to omit reference to the European Charter of Fundamental Rights. As I mentioned, this is an issue that impacts on human rights, and a specific measure that highlights that human rights are included within the provisions. How do the Government see the definition of such violations, if we are to stand alone? We referenced this issue during the Trade Bill. Commitments were provided by the former Minister, so clarity on how the Government intend to take this forward would be welcome.

Secondly, by definition, many of the technologies move fast and need continuous updating, while licensing regulations need to be ahead of those that do not have the best interests of our country at heart. There is a dual-use co-ordination group currently chaired by the Commission, in which the UK participates by virtue of our membership of the European Union. By leaving, obviously we are also leaving the dual-use co-ordination group. However, it is a given of the significant correction that the Government are making that we will have an ongoing relationship with this dual-use co-ordination group to ensure that there are no emerging gaps. How do the Government envisage our having a relationship with the dual-use co-ordination group if we will be out of it? If the Minister can respond to these points I would be most grateful. We share the intention of ensuring that in any situation there is competent legislation.

[Lord Stevenson of Balmacara (Lab)]

My Lords, like the noble Lord, Lord Purvis of Tweed, I put on record our thanks to the noble Baroness, Lady Fairhead, for her work and for the excellence of her contributions during her time as Trade Minister. We are sorry to see her go but obviously delighted to see such a wonderful substitute in her place before us, beautifully adorned as the noble Earl is with the White Rose of York. I see nothing in that; I simply make that comment in case it would not be picked up in Hansard.

In his contribution, the noble Earl made it clear that he offered his apologies on behalf of the Government for the mistakes made in the original drafting and took full responsibility for them. What we are left with is the Government taking the opportunity to pick up drafting errors drawn to the attention of your Lordships’ House by the Joint Committee on Statutory Instruments. These have been worked into the draft before us and resolve the problem referred to by the noble Earl and the noble Lord, Lord Purvis. I have very little to add to that. We covered the original drafting in some detail but did not pick up the mistake, which is one of those things. I do not think there are any further issues to raise. The points largely concerned how this fitted into the overall scheme for the control of goods which could be used by others to whom they are sold for suppressing civil rights, et cetera, in other countries. We are clear that that is happening.

There was one thing I meant to ask at that time. I am sure the noble Earl does not want me to go on to this but I offer it to him as a question to which we may need an answer in some sense. The change on page 2 of the statutory instrument to Regulation 3(22)(h)(ii) is a substitution. The change made is,

“for ‘either non-EU Member States or Wassenaar’ substitute ‘non-Wassenaar’”.

I have got lost in the double negative there and I wonder whether the noble Earl, either when he is on his feet or in responding by letter, if he prefers, could explain to us who exactly makes up the non-Wassenaar group. If there are any issues there to which he wishes to draw attention, I should be happy to hear those but with that, I am happy to support these regulations.

Protecting Against the Effects of the Extraterritorial Application of Third Country Legislation (Amendment) (EU Exit) Regulations 2019

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Tuesday 26th March 2019 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I do not think there will be any difficulty on these Benches about ensuring the continuity we will require in order that there is certainty for British businesses that they can operate on the correct side of international law. The only areas that I hope the Minister will clarify—her introductory remarks were quite helpful—concern, first, the application process that will be required if we are to have a stand-alone position outside European regulations. The applications for authorisations will have to be made to the Secretary of State, as the regulations state. Will the Minister indicate what process such applications will involve?

The second area, which the noble Baroness will not be surprised that I raise, concerns the matter of another judiciary within the United Kingdom. While, as part of Scottish criminal law, this will be a reserved power, nevertheless the criminal penalties that may well apply on the potential breach of some of these things by Scottish businesses would have to be prosecuted by the Scottish courts. One of the examples the Minister raised, that of Iran, is very relevant for the very large Scottish oil and gas industry that trades across the whole region, including within Iran. It is a relevant point, given the not-so-subtle threats from the United States that it will consider breach of its sanctions policy by those British businesses that continue to trade with Iran under a perfectly legal framework. If we are to have a stand-alone approach, absolute certainty, clarity and reassurance would be very helpful. The Government indicated that no consultation was necessary in bringing forward the statutory instrument. I was slightly surprised about that, given that we have two distinct judicial systems in the UK.

The Government also indicated that before the UK leaves the EU, guidance on how a blocking regulation would apply to the UK would be published. Given that when this instrument was drafted the intention was that, potentially, we would leave on Friday without an agreement, can the Minister say whether this guidance has been published? If it has not, when will it be, to offer that reassurance?

Finally, the Explanatory Memorandum states:

“The Blocking Regulation currently provides that the Commission is to regularly report on the effects of the extraterritorial third country legislation. This will become a requirement on the part of the Secretary of State in the retained version”.


Through what mechanism do the Government intend to do that? Will it be through Written Statements to Parliament, or will a public document be laid before Parliament to provide that transparency? I hope that the Minister can clarify all those aspects.

[Lord Stevenson of Balmacara (Lab)]

I, too, am very grateful to the Minister for her very full introduction to this SI. It took us into areas new to me, such as the intersection between foreign policy and trade policy. That is an interesting issue and the noble Lord, Lord Purvis, was right to focus his remarks on how these things will work in practice. I look forward to the Minister’s response.

When the Minister introduced the SI, she pointed out that much of the regulation that has been transposed was originally introduced in 1996 in response to the extraterritorial reach of certain sanctions imposed by the US in relation to Cuba in the 1990s. Obviously, it has been updated since then, particularly with reference to Iran. It set a train of thought in my mind about how exactly our current foreign policy meshes with these regulations. With particular reference to Iran, the commentary I have been reading seems to suggest that the package of measures that is being transferred across would encourage the European Investment Bank and banks in the UK—possibly even the Bank of England—to finance activities in Iran and to strengthen ongoing sectoral co-operation and assistance to Iran. That would include financial assistance through development corporation or partnership instruments, and encouraging the UK to explore the possibility of one-off bank transfers to Iran’s central bank, which would allow Iranian authorities to receive oil-related revenues.

I suppose this is all right—I do not really understand very much of this; it is way above my head—but when the Minister responds perhaps she could explain exactly how that meshes with our current policy towards Iran, which I understand is not as sympathetic or supportive as might be suggested by the rather large cash transfer opportunities which were being discussed.

This statutory instrument follows on from activities that have been going on in Europe for a number of years in relation not just to Cuba but to the other countries that were mentioned. It requires companies to notify the Commission within 30 days whenever renewed US extraterritorial sanctions directly or indirectly affect the economic or financial interests of the company in question. Various other things apply. EU companies can recover damages in EU courts from persons causing damage as a result of the sanctions, and it nullifies the effect of any court judgments or decisions of administrative bodies that are based on the reinstated US sanctions. My question here is: has anything happened in that regard? Do we have details on the number of companies that have notified the Commission within 30 days, as required? How much money has been recovered, and how many times have the courts been subject to recovery requests? I am sure that it will not affect the way in which we respond to the SI, but it would be interesting to have on the record whether this has been an active process or one that is more observed in the absence of activity than in the reality.

My attention was drawn to a quote from what is in some senses a rather unusual source, since I do not often quote this person. The UK Foreign Secretary at the time that this instrument was brought in, Boris Johnson, said that he thought it was rather difficult to protect European businesses due to the extraterritorial effect of US sanctions and the difficulties companies have when they touch the live wire of the American financial network—they find themselves sanctioned almost immediately. So my third request for more information is to ask whether the former Foreign Secretary is right that this has been rather difficult for companies to access and use.

I suppose I am leading to this question: what rationale do the Government give for continuing this transfer? It would clearly be inappropriate to have a situation in which an EU regulation had legal effect in the UK when we had not properly transferred it. If the ends do not justify the means, I am rather surprised that the Government are taking this step forward, so could the Minister reassure me when she comes to respond that this is a necessary instrument, that it fits with our current foreign policy operations and thoughts and that there is no concern in that respect?

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

3rd reading (Hansard): House of Lords
Wednesday 20th March 2019 Lords Chamber

[Lord Stevenson of Balmacara]

It is Balmacara. It means “the town from which the Macraes come”—Macrae being my mother’s maiden name. I thought the House might enjoy that little moment of clarity.

Amendment 8 in my name and that of the noble Lord, Lord Purvis of Tweed, comes from a concern that the regulatory power-making in the Bill as originally drafted would cause difficulties for the relationships that should exist between the UK Parliament and the devolved Administrations. There have been two developments since the original amendment went down. First, the continuing debate on a series of matters involving trade issues to be brought back to the devolved Administrations has yet to be resolved in discussions between the UK Ministers and devolved Administration Ministers. Also, the Healthcare (International Arrangements) Bill, which recently went through your Lordships’ House, was subject to an amendment that seemed to suggest that there was a requirement in most of the legislation coming forward, particularly this Bill, to reflect how, and on what basis, Ministers of the UK Parliament could engage with the devolved Administrations over how regulations should be framed and consulted on, and under what conditions consent would be given.

Since this seemed to involve a number of different issues, not just those related to trade, the noble Viscount, Lord Younger, kindly held a meeting at which we were able to discuss this in more detail, attended by myself, the noble Lord, Lord Purvis, and the noble and learned Lord, Lord Hope. I think we got a long way on that issue in trying to understand how these various matters came together. I think the broad position that affects all these issues is set out in the Scotland Act 2016 and in comparable primary legislation affecting Wales and Northern Ireland.

In respect of the possibility of having a convention that would echo that relating to regulations that will need to be made under the powers given under primary legislation, I think the noble Lord has something to say that will be helpful in resolving whether Amendment 8 is required. I beg to move.

[Lord Purvis of Tweed]

My Lords, I was interested to hear the clarification of the title of the noble Lord, Lord Stevenson. The House will not be interested, but my title of “Tweed” is because of the river, not because I have a penchant for tweed suits outside this place, which most colleagues from England assume is the case. However, because my title is from the Tweed, because I am from the border and live on the border, and because I was a Member of the Scottish Parliament for the Borders, the legislative competence interaction on trade agreements is of significance, not just for Borderers but for the relationship with the devolved Administrations. I am therefore very happy to add my name to this amendment.

In so doing, I also recognise the patience of the noble Viscount, Lord Younger, in meeting us and hearing our case for the need for an extra level of clarification on the interaction of the areas where discussions continue with the devolved Administrations. In some areas, there is disagreement over where the legislative competences of areas that had been EU areas of legislation will lie, when they are repatriated, if we leave the European Union. As the noble Lord, Lord Stevenson, said, the Scotland Act’s approach to devolution is that if those powers are not spelled out in the Act’s reservations, they are recognised as fully devolved to the Scottish Parliament. This is about how the order-making powers in the Bill interact with those powers. Clarity on the areas of interaction between the devolved competences would be helpful.

Finally, clarity would be helpful in looking at those areas of legislative competence where there are ongoing discussions: agricultural support, organic farming, animal health and traceability, animal welfare, chemical regulations, state aid and food labelling. All are likely to be important not just for continuity agreements but for future trade agreements. Some of these issues are politically sensitive, so getting the required clarity on how they will be legislated for in trade agreements is important. It would be regrettable if the competences ended up in the Supreme Court for dispute; further clarification on current interaction is desirable. I know that the Minister will probably not be able to answer my questions entirely but I look forward to his response to this short debate. I hope he can add an extra level of clarification, which would be satisfactory at this stage.

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[Lord Stevenson of Balmacara]

My Lords, it usually falls to me to embarrass Ministers, not the other way round. I felt myself blush just then, and I hope it was not caught too closely on television—but I thank the Minister very much indeed for her comments.

Leading on a Bill in your Lordships’ House, whether in a government position or in opposition, is an honour and a privilege—but those who have done it before will know what I mean when I say that it can take over your life. It is not just the bad dreams and the nightmares of waking up and thinking, “Did I actually say that?” or “Did I forget that amendment?”; it is all the other work that goes with it: meetings with third parties who feel that they should participate in the Bill, and in our case—this may not be true of the Government—talking to our colleagues in the Commons, and to other groups in this House that have to be involved. It is well known that it is simply not possible to improve a Bill unless those of all parties, and none, join together to see what the public interest requires.

There are also meetings with the clerks, and Back-Bench liaison on our side, and voting strategy meetings. There is a lot going on, and that does not get any less as we come towards the end of the process. It gets to the point where you eat, sleep and dream the Bill. That is fine when it takes six weeks, but it is not fine if it takes six months, as this Bill has done, to get through to its final process.

There are pluses too. Working on a Bill means working intensively with colleagues. I do not just mean my noble friends Lord Grantchester and Lord McNicol, and our extraordinarily hard-working legislative assistant Ben Wood; it also means working with the Bill team. I agree that all credit is due to Suzanne Greaves and her team, because they have been fantastic to us as well as to Ministers, giving us information and responding, to a very high standard, to often ridiculous requests at very short notice. Ministers, including the noble Lord, Lord Bates, and the noble Viscount, Lord Younger, have been excellent at the Dispatch Box, both in what they have said but also in saying it very quickly. That is, I believe, often the hallmark of a good Minister.

I am sure I speak for the whole House when I congratulate the noble Baroness, Lady Fairhead, on what is, extraordinarily, her first Bill. She has it brought it to the House with consummate skill and considerable confidence. She ensured that we met regularly outside the Chamber for the meetings we have referred to, which were robust but extremely good and fruitful. We made progress and we were given all the information we needed.

We did not always agree—the Minister has acknowledged that—but where we differed, we did so only after all avenues for compromise had been explored and we proceeded on the basis of mutual respect for each other’s point of view. In doing that, we upheld the best standards of this House.

[Lord Purvis of Tweed]

My Lords, at this awards ceremony I am delighted to be nominated for best supporting actor. I, too, thank the Members of the Government Front Bench for their patience and their willingness to engage. The Minister said this was the first Bill she has taken through. This is the first time I have been on a Bill’s scrutiny team, although I have had the privilege of taking through a Private Member’s Bill.

The Minister and I now know more about World Trade Organization terminology than we ever wanted to know. We hope it will become useful in the future. The Bill arrived in this House eight months ago. It started its considerations 15 months ago and the Trade Bill 2017 is now the Trade Bill 2017-19. That demonstrates that it has been a long process. The Minister said in her speech at Second Reading on 11 September that this was merely,

“fundamentally a pragmatic and, in most parts, a technical Bill”.—[Official Report, 11/9/18; col. 2204.]

We have had to scrutinise many technicalities and the Minister has been pragmatic in the way she has responded. She also said that the Bill was about continuity and certainty. These two things have been lacking on Brexit over the last months. On this Bill we have been unaccustomed to having such a large attendance in the House as there is now; given the next Statement on Brexit preparedness, I am sure it is in the context of this Bill having to be in place to provide some of that preparedness.

In thanking the Government Front Bench, and having worked closely on a cross-party basis with the noble Lords, Lord McNicol and Lord Stevenson, and others, I should also mention that I have had the stalwart support of my noble friends Lady Kramer and Lord Fox, and the unsung heroes of our Benches, Andrew Burrell and Elizabeth Plummer.

This is now a better Bill having gone through this House. We sought to enhance parliamentary power in setting the negotiating objectives and a mandate, and that is now in the Bill. We sought that consultations with the devolved Administrations would be enhanced, and that is now in the Bill. We said that there should be parliamentary approval of these continuity and ongoing agreements, and that is now in the Bill. Participating in a customs union is now in the Bill. A mobility framework for the movement of people is now in the Bill. Non-regression of standards—important across different areas from animal welfare to food standards—is now in the Bill.

The Minister said that this was a rewarding, constructive and challenging experience for her. In many regards she has met that challenge and I commend her for it. She has certainly been constructive in how she has engaged with us. The rewarding aspect will be how she can persuade her colleagues at the other end of this building to ensure that all the wise amendments that this House has passed are not overturned. We will have to see how she does on that business. If she does it, I commend her for it.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

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

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure to follow my noble friend, who speaks with great authority on this issue. In following him, I will use one example to highlight the importance of this amendment in maintaining the spirit and including the contents of the agreement. I use the example of today’s announcements on the proposed tariffs that may be applied on a no-deal Brexit and the Written Ministerial Statement on how that will impact on the Northern Ireland border, already referred to by the noble Lord, Lord Kerr. I was grateful for an opportunity to have a conversation with the Minister about this today.

The proposals for the tariff regime, which would be an increase of 489 tariff lines on goods from the European Union and would have to have some form of mechanism across the border of Northern Ireland, need to be seen in the context of operating within a year. This is not simply an emergency or temporary proposal, and a year is a long time in the context of some of the statistics referred to by the noble Lord, Lord Hain. There were 46 million vehicle crossings at the 15 Northern Ireland border locations in the last year, according to the Northern Ireland statistics agency—3.8 million of those were goods vehicles, nearly three-quarters of deliveries involve small businesses, and two thirds of cross-border trade is bilateral agri-food and intermediate trade. That means these are small businesses—as already referred to, 80% are low-value—and often individual businesses trading on a self-employed basis, but every one of those people will have to be registered with an economic operator’s index number, or EORI. Only one-sixth of all businesses have so far registered, so the system, even as published today, is not operable, but new processes and procedures have to be carried out. The Government are giving no advice to Northern Ireland businesses on that. They believe a unilateral action, against the spirit of the Good Friday agreement and the spirit of an all-island economy, is the way forward.

How can it be a unilateral approach if tariffs will not be applied to goods coming from Ireland, but will subsequently be applied if those goods are part of intermediate trade with Great Britain? Liz Truss, the Chief Secretary to the Treasury, was asked at lunchtime where the checks would be carried out. She said that she believed it would be at “a border in the UK”. This is the Chief Secretary to the Treasury today. What does that mean? If one is tolerant, one may forgive her not knowing the terminology of Great Britain and the United Kingdom, but that is unforgivable, given that she said she will vote for a no-deal Brexit in the other place this evening. What kind of consultation is being carried out, not just with the Irish Government—which, as my noble friend indicated, is urgent—but with businesses on both sides of the border that will be operating?

Linked with the long-term basis is the fact that the unilateral approach is not WTO-compliant, unless the Government trigger one element in WTO processes on public morals. There are some dispensations that can be provided, in extremis, on the basis of public morals that can set aside a system where we will not apply tariffs from one country, if we have no intention of applying them to the rest of the world. It would be a retrograde step if the Government activated a public morals clause at the WTO on a situation as delicate as that on the Northern Ireland border. The Government are setting aside security and border integrity as the basis of the unilateral no-deal proposal. The Government should see sense and support this amendment, because it provides the framework for these consultations to be carried out.

[Lord Stevenson of Balmacara (Lab)]

My Lords, this has been a short but poignant and moving debate. We have reached back into history and tried to articulate fears and concerns.

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[Lord Stevenson of Balmacara]

My Lords, it is a test of the abilities of Ministers to be able to breathe life into a list such as that we have just heard. This is a case of drafting amendments beyond the boredom threshold of many people who have to sit through these debates, and I congratulate the noble Viscount on his ability to do that well. I have no objection to the points that he has made and will support them enthusiastically when asked to do so.

In this group, which includes a lot of one-line amendments, is a large amendment dealing with the Sewel convention, which has operated for a number of years in relation to devolved matters in the Assemblies in Scotland, Wales and Northern Ireland—when they meet. It is there because there is concern that the Government have still not bottomed out their arrangements for how all such matters are to be dealt with going forward. While there is no complaint that the convention has not worked well until now, conventions are conventions and there is an argument, at least in principle, that at some point—either now or at some later stage—an attempt should be made to clarify the rules by which it operates and the conditions under which it exists.

I say that particularly because there remains a continuing concern over how the Government attempted to legislate in the withdrawal Bill, in particular on matters being devolved—as they may be under any agreement with the EU or if we crash out—to the UK but for which there was a strongly persuasive case for them going directly to the devolved Administrations. In those circumstances, a great deal of work has been done and a lot of the individual issues have been settled, one way or another. However, a list of matters relating to devolved issues still needs to be resolved so that where they intersect with other geographical locations, there is a workable scheme under which progress can be made.

One issue that arose previously was the extent to which the devolution legislation passed in this House to set up theses bodies could be invoked for issues concerning who has the authority to legislate where a matter is devolved. If a matter is not reserved under the Act, it is devolved, so matters that fall to be devolved must have the consent of the body to which the issue is devolved under the Sewel convention. I am putting this simply; the arrangement is more complex. In the case before us, with trade being such an important issue, we felt that there should be some measure in the Bill to explain exactly the conditions under which the convention would operate and the extent to which it would or would not be concerned. The amendment’s wording is quite clear:

“Regulations made … by a Minister of the Crown may not normally make provision which would be within the devolved competence of a devolved authority”,


unless the Ministers consent. It goes on to say that it would normally be within the devolved competences of the devolved authority, to which conditions are attached. That applies to all areas.

That would have been a very simple introduction to a very simple issue on which I would expect the Minister to respond. However, it will not have escaped the House’s attention that only yesterday, a very similar amendment to another Bill—the Healthcare (International Arrangements) Bill—was moved by the noble Baroness, Lady Manzoor, on behalf of the Government. It covered almost exactly the same territory. It was phrased positively, in a way that the amendment before the House today is not, but it covers the same ground. It said:

“Before making regulations … that contain provision which is within the legislative competence of a devolved legislature, the Secretary of State must consult the relevant devolved authority on that provision”.


It goes on to explain the conditions under which that would operate. The wording is not identical but I would argue that the sensibilities and principles behind this matter are identical to those of that amendment. Does the Minister therefore recognise that, to the extent to which the Government have already considered this issue and legislated for it, it may be in the Government’s best interests to accept Amendment 28, since to do otherwise might cause difficulty for what has already been agreed to in the healthcare Bill? Alternatively, would he agree to meet me and other noble Lords to discuss this, so that we can come back at Third Reading with wording that is consistent with what will soon be in law via the healthcare Bill and appropriate for the Trade Bill?

[Lord Purvis of Tweed]

My Lords, I will also speak to Amendment 28, to which I have added my name. There is not much to add to the persuasive case made by the noble Lord, Lord Stevenson. I welcome the Minister, who is always assured at the crease even as the third batsman. His clarification on Ministers of the Crown acting jointly with devolved Ministers is helpful; Clause 2 has always been a bit of a puzzle for me when it comes to the joint working of the two sets of Ministers.

As the noble Lord, Lord Stevenson, pointed out, our discussions in Committee concerned the areas of interaction where either devolved and reserved competences align themselves clearly or there is dispute as to where they fall—that is, whether they fall fully in the devolved competences of the Welsh or Scottish Parliament, for example, or are reserved. When we discussed the withdrawal Act, the Government put forward all the different policy areas to be repatriated from European Union legislation. There were no issues with 49 of them. It was recognised that a common framework between the UK and the devolved Administrations was needed for 82 of them. The Government said that there was to be further discussion on 24 of them. In 12 areas, there was no agreement; the UK believed that they were reserved but the devolved Administrations, particularly the Scottish Parliament, believed that they fell fully within the devolved competences.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

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

[Lord Stevenson of Balmacara (Lab)]

My Lords, first, I thank the Minister for her efforts to meet the requirements of the Motion in the name of my noble friend Lady Smith of Basildon, who is unfortunately indisposed at the moment. I know that my noble friend keeps a beady eye on everything that goes on here, so she will have noticed the welcome given to her Motion, even though it was not quite so well received on the Government Benches at the time. Nevertheless, we are where we are and we have made some progress. It cannot have been easy for the Minister or the Government as a whole to get a White Paper prepared and laid in an atmosphere that is probably best not gone into and in the very short time available. It is a major achievement and we appreciate it. It is also clear that the Government’s thinking has progressed in recent weeks and we welcome much of the analysis set out in the White Paper.

As we all know, trade negotiations are complex and difficult. They should engage civil society and feed in the views of consumers, trade unions and companies. The negotiations require a proper and effective system, involving this Parliament and the devolved Administrations, in relation to the negotiating mandate, and feedback on the negotiations as they progress and the final agreements. We think that requires underpinning with a statutory framework so, in the absence of any government amendments covering these points on Report, and in view of the assertion in the White Paper that no legislation is needed to deliver the Government’s proposals, we have tabled an amendment setting out a possible scheme. It is on that basis that we are happy to agree with the Motion moved by the noble Baroness and proceed to Report.

[Lord Purvis of Tweed (LD)]

My Lords, like the noble Lord, Lord Stevenson, we welcome the Minister’s comments from the Dispatch Box. This is an occasion when parliamentary persistence has proved effective. We started this process when the Government had indicated that the Bill would be about only the existing continuity agreements and we made a very strong case, across all parts of the House, that it should also signal a direction of travel which, in many respects, would create precedent. It is on that basis that we on these Benches welcome the Command Paper that the Minister has published and her willingness to engage with and meet opposition parties and Members from across the House.

One reason this has been so important is that it has been a consistent practice of this Government, in relation to continuity trade agreements or starting discussions with countries about future trading relationships, to delude themselves that it will be easy, then deny that there is a problem when it is highlighted that they are difficult. Then they demur when frustrated officials leak information that allows us to glean the reality from the media. Then, unfortunately, on occasions, they deflect the problem, saying that is not their problem or responsibility; it is other countries that are not lifting the burden, or the European Union that is not being forthcoming with its position on a future relationship. We want to be in a position where we can put all that behind us and move on to a platform where we have much greater clarity as to what the trading relationships, and the role of Parliament and the devolved Administrations in their oversight and approval, will be. I welcome the Command Paper as the start of that.

To quote the noble Baroness, Lady Manzoor, from Question Time, this can be only the start of the process, and this is the platform on which we will seek to build. This is not the end. In that spirit, I hope the Government will be very favourable to Amendment 12 later today to ensure that that platform can be built on in the most constructive manner. On that basis, I look forward to hearing the Minister’s comments.

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[Lord Purvis of Tweed]

As the noble Lord will know, we have engaged in a number of legislative standards across all the different aspects of the British economy. If they are not captured in proposed new paragraphs (a) to (g), which we believe to be comprehensive, and if there are some elements of the economy where legislative standards currently exist and we would consider them to be of equal status, there is a requirement for them to be protected. That is why these are baseline standards. If areas are excluded, they will be captured by “not limited to”. The list of standards is not necessarily designed to be open-ended; these are meant to be the existing legislative standards that are already on the statute book that we wish not to be impacted by any of the regulations that could be made through this legislation.

[Lord Stevenson of Balmacara]

My Lords, we have had a very good debate on an important and long-lasting topic which we need to draw to some form of conclusion. We have before us two amendments that cover the ground very admirably, although their approaches are rather different. Indeed, the essence of what we are trying to get at may become a little masked in the timing. That last exchange is a good example of the way in which aspiration, interests and enthusiasm can sometimes lead us to a position where the drafting does not support where we are trying to go to.

We should be clear that there is support around the House for putting into the Bill at an appropriate place a clear and unambiguous statement which reiterates what the Government have said on a number of occasions—and we will probably hear again in a few minutes when the Minister responds—that they are committed to not lowering domestic standards in the EU agreements that are transitioning into bilateral agreements or in any future trade agreements that they wish us to enter into. If we can hold on to that and find the appropriate words rather than the ones before us, which need to be merged if we are to get the best out of this, we might make a way forward. I hope the Minister will give us hope that there will be the opportunity for further meetings and discussions on this issue. It is worth trying to go the extra mile to get us to a point where, by Third Reading, we have an agreed procedure.

The noble Lord, Lord Purvis, was right to try to drill down into some of the points that may need to be bottomed out. I will not repeat where there are difficulties but simply acknowledge that we need to be clear about whose standards we are talking about, where they are to be found in current statute, how they apply to UK interests and how they are limited in what they might say to any future Government about third-party Government arrangements, which are clearly not right.

Another point is to pick up how the WTO and other international agreements and treaties that we make covering the list in subsection (5B)(a) to (g) would fit best in a statutory form. That is the way that we need to go. I therefore hope that all parties will accept that this is not the time to force through either of these amendments but to come forward with an agreed position, if we can, in time for Third Reading.

--- Later in debate ---

[Lord Stevenson of Balmacara]

My Lords, the purpose of the amendment is to give the other place a chance to consider whether the UK should seek to remain in a customs union with the EU. It is an option that we know is realistic and negotiable, as signalled by senior EU figures over recent weeks and months. It has demonstrable support among communities throughout the United Kingdom, this House and the Commons, as well as business and trade unions, and would go a very long way to providing a permanent solution for Northern Ireland.

A customs union with the EU would guarantee continued UK access to existing EU trade agreements without having to roll over after 29 March, although that does not seem to be going terribly well. It would enable the UK to have a say on the direction of future European trade negotiations, allowing us to push forward our principles of development and strong standards, and our values in tackling issues such as climate change. It would offer certainty and stability to British industry, thereby protecting jobs and allowing businesses to secure new trading opportunities. When coupled with a close single market relationship, it would create the conditions for our vital services economy—80% of our GDP—to flourish and grow. The other place narrowly rejected a customs union when it considered the Bill, in part because the Prime Minister promised to replicate the benefits in her deal. However, they are for negotiation and certainly not yet agreed.

If this House supports the amendment, we are doing our duty in allowing the Commons to think again about a really important issue. I beg to move.

[Lord Purvis of Tweed]

My Lords, there is no doubt that we on these Benches support the free economic movement of goods and people, which benefits all parts of the British economy and of our United Kingdom. The news today from the motor manufacturing industry is no surprise to those who have been following the assets leaving the United Kingdom and seen the people leaving the United Kingdom. There is a growing and depressing trend of businesses making a choice to move away, or at least to move some elements away, from the United Kingdom.

One of the principal reasons for that is the uncertainty about our trading relationship with our biggest market. The amendment, to which I have put my name, is better than the Government’s current position, or any position they are likely to take. That is why I support it. It is becoming a cliché that business needs certainty, but for many businesses it is now too late. The least this House can do, through the Bill, is to offer a higher level of certainty to businesses that there is some support for the UK remaining a member of a customs union.

I shall give one small example, of the many that could be offered, of why it is important to avoid the kind of disruption that leaving a customs union would bring about. This was highlighted in the Government’s recently published paper, Implications for Business and Trade of a No Deal Exit on 29 March 2019, and it illustrates what leaving a customs union would mean. There is a requirement for all businesses trading with the European Union to have an economic operator registration and identification number, in order to,

“complete the necessary customs documentation for goods they are importing”.

It is not simply desirable; it is necessary. As the Government themselves say,

“an EORI number registration is one of the most basic and straightforward parts of the process most businesses would need to undertake to prepare for no deal”.

Businesses will need that number on exit day. The government document goes on:

“As of February 2019 there had only been around 40,000 registrations for an EORI number, against an estimate of around 240,000 EU-only trading businesses”.


So we are one-sixth ready to leave.

The document highlights the fact that on an issue for which government communications have been strong, and the information to businesses about the fact that they needed to prepare has been clear, they have not done so—for a number of reasons. This illustrates the complexities required of the business community if we are outside a customs arrangement that would amount to a union. That is one reason, among many others, why we support the amendment.

We on these Benches reserve our right to campaign strongly for the UK to retain membership of the single market, as well as the customs union, of the European Union, and to say that if there is to be a withdrawal agreement it should be ratified by the people in a referendum. I hope that those on the Labour Benches are also moving faster in that direction. That debate is for another time. The debate on the movement of people is for the next day on Report, but for the moment we can give a signal to businesses across the country that the House of Lords, at least, is focused on providing a degree of certainty, even if the Government are not.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Committee: 4th sitting (Hansard): House of Lords
Monday 4th February 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, Amendment 45 is in my name and that of the noble Lord, Lord Purvis, for whose support I am very grateful. We are reaching the last quarter of our time on this Bill in Committee, and we have never touched, in any serious way, the question of services, which make up 80% of our GDP; they are an important part of our economy now and will be in the future. That curious absence of services has prompted this amendment; it is a probing amendment in the sense that I do not think there is any issue between the Government and us on this. We both recognise the importance of it and want to make sure that it is successful, but it is an opportunity for the Government to set out clearly what they intend to do in this area and to bring forward any thoughts they have about how the importance of services might continue, as the negotiations, which are currently with the EU and will return to the other place shortly, progress.

We hear a lot, importantly, about manufacturing and the physical goods that this country makes and imports. We do not hear nearly as much about services, and that is curious. It is important to be clear why that is. Direct trading of services across borders by purchasing or selling architecture, legal opinion or forms of insurance is a well-known measure of activity. This area has grown considerably and the UK economy is strong and strengthened by that. Business services, financial services and other aspects such as travel, including the tuition fees of foreign students who study in the UK, transportation and telecommunication information services make up the huge proportion of our activity in this area. Most trading of this type is with the EU. It is over 50% if Switzerland is included in the figures, but we also have considerable trade outside the EU and we should not forget that.

It is also important to recognise that, in some senses, exactly how this takes effect is hidden from plain sight. I should explain: we know a lot about the physical movement of things like car parts, because we are told, time and again, that the issue in modern-day trade is not so much the individual purpose of creating a particular object, machine or type of equipment; it is the assembly of the various parts. In the case of a car, bumpers, injectors and all sorts of things that go into the modern car cross the channel several times before being assembled, either here or elsewhere, in the final product, which is then sold. We are concerned about that and much of the Bill has this as part of its process, but the point is that this is not just about physical material. There is also a question about knowledge, intermediate input, services, financing and having the right people in the right place, which is necessary for this complicated pas de deux to work.

The single market, which underpins all this in the EU, plays a pivotal role in facilitating this process of increasing specialisation, because it includes as its basic point—this is derived from consideration within the GATS treaty under the WTO—the four freedoms for moving goods, services, capital and people. Hence, a focus on manufacturing the individual item sees only part of the story.

Why do services not feature more strongly in our discussion and debate? There are three reasons. First, services agreements are a relatively new form of trade negotiation. There are not that many around. They are difficult, because you have to negotiate and consider individual aspects, often regulatory and non-tariff barriers, to the way the trade happens. They cannot always be done by fiat from government; they have to involve large numbers of other companies and organisations. They are bureaucratic; they are not necessarily all organised from a particular aspect in government, such as BEIS or the Department for International Trade, because regulators and government departments will be involved in legal services and other areas. Finally, because different regulations belong to different bodies, it is more difficult to trade one sector, as it were, against another. There is not really an easy route through this, and that may explain why it is often left to the last.

I welcome the Government’s response on that, but it is a cynical response. We have done so well in services trade in recent years and our performance is one of the strongest in the world. We have more to lose in trade negotiations that focus on individual hardware and machinery parts if they do not also make sure that those trading in legal and other services are considered as well. We are in a quandary. We can argue the easy option of a goods-only agreement, because the rules for that are relatively straightforward: the tariffs are already very low anyway and we are not talking about substantial changes to the way in which we would do it. But if you include services then we are talking about a whole range of new activities, new players and the offering of new types of discretion. I will wait to hear the Government’s response, but it could be argued that we in Britain are not yet ready to engage with that successfully.

In that context, the opportunity is there for the Government to respond positively on how we are going to take forward this issue and how important it is to make sure that we get it right, and to make sure that we in this country do not suffer simply because the dog that did not bark—services—is still not barking. I beg to move.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the noble Lord, Lord Stevenson, for moving the amendment, which I happily signed. It will be no surprise that we on these Benches favour, still, the United Kingdom continuing as part of the single market of the European Union. However, in many respects this is a mitigating amendment on the basis that, if we are to leave the European Union, the most significant non-financial services sector for the British economy is, as the noble Lord, Lord Stevenson, said, the services sector. It is right, therefore, that we give proper focus to it in this Bill.

Up until this point, we have discussed the emerging elements of the continuity agreements. We have seen so far only one published, that of Switzerland, and are awaiting others. In the continuity agreement, Switzerland has components on services, and guarantees free movement of people for those providing services. That is beyond the elements in the immigration White Paper and in the withdrawal agreement from the European Union, and it is beyond what the Government have said. There are, however, some indications that the Government recognise that services are critical to the British economy. But it goes beyond that, as do our discussions with Switzerland, which are on the gold market and property.

This affects all parts of the United Kingdom. The UK is more dependent on services, especially non-financial, than perhaps any other country in the world. We export more in absolute terms than any country other than the United States. We have been able to get to that position because we have been doing so within an integrated market of the European Union. In many respects, we in the United Kingdom have been the driving force of the emerging integrated markets in the European Union. It is an irony that, as the architects of this approach to developing the services markets across the European Union to benefit our country, we are going to leave it.

If we are to have a future relationship, it is critical that we focus not only on tariffs and non-tariff barriers but on what is necessary to ensure that we can continue to benefit, at least to some degree, from a services relationship with the European Union. This applies particularly in digital services, as well as in the wider elements of research and development.

Many months ago, your Lordships’ committee reported on this, and in December 2017, in the name of the noble Lord, Lord Whitty, this House had an opportunity to debate the significance of the non-financial services sector to the British economy. Now, we have the Government’s clear position: we will be leaving it. We are choosing to leave an integrated market, which we have led, so how do we focus on some of the component aspects?

In the withdrawal agreement, we have seen some elements of mutual recognition of qualifications and some elements of professional standards being aligned so that those working in the services sector can be part of a wider operation on the continent and with the European Union. However, this is only a very small aspect of the overall need to have a much closer alignment. It requires government honesty: we may well be leaving the single market, but it needs to be clear what very close alignment would look like.

This applies to the discussions taking place this week and next week on the alternative to a backstop. The arrangements for the Northern Ireland backstop were as much to do with the continuity of the services sector for those providing professional and trade services from north to south and south to north as they were with the checking of the origin of goods at a border for tariff purposes. The all-Ireland economy is, by and large, an all-Ireland economy because of services. We are treaty-bound to protect that, so it is very important to have more clarity from the Government on what they expect to see as alternative arrangements to the Northern Ireland protocol if we are to protect the core elements of an all-Ireland services economy.

We know that we cannot rely on a much wider alternative, which is the WTO. In its last set of discussions, it could not even agree on a communiqué about taking forward future services agreements on a WTO basis. We know that the USA and China are in dispute not only on trade in goods, but also on services, and we know, as the noble Lord, Lord Stevenson, said, the complexity of even the European Union introducing services components to third-party trade agreements. If we know that it has been difficult, with the UK as the driving force, to secure agreements with other third countries, why do the Government think that it will be easy for the European Union to do it with us?

This amendment, therefore, is very important. I hope that it will allow the Government to be much clearer, because the services sector of the United Kingdom has, in many respects, been the driving force of growth in the UK, one that we cannot afford to put at risk.

--- Later in debate ---

[Lord Stevenson of Balmacara]

By this stage of the proceedings the Minister is usually tearing up her notes and packing her bag while the team are leaving the Box, and the Committee is allowed to descend into a sort of torpidity at the end of a long and heavy day—day four, in this case—while we heave a sigh of relief. However, I have always wanted to table an amendment about the commencement of a Bill because it is something that we always forget to look at.

I was mulling this over a few weeks ago and thinking about what aspects of commencement one could look at. It is all very straightforward, although Clause 7(1) has a strange thing where it says:

“Regulations under section 1(1) or 2(1) may … make transitional, transitory or saving provision”.


I was wondering what on earth they were and thinking about a suitable probing amendment when I happened to run into the noble Lord, Lord Hannay, who said, “I’ve been thinking about commencement and we ought to do something about it”. Out of that we hatched this wonderful amendment, which is the last one that we are going to move tonight, and I hope the Committee will accept it as it stands. It provides a sensible and clear exposition about what position Ministers should be in before they begin to implement these procedures. It is very simple, inserting a new clause further to Clause 15(2), which says that the powers that would otherwise,

“come into force on such day as a Minister of the Crown may by regulations made by statutory instrument appoint; and different days may be appointed for different purposes”,

Those are two quite clear conditions that have to be met. I beg to move.

[Lord Purvis of Tweed]

My Lords, I am happy to contribute to the successful realisation of the noble Lord’s ambition to have an amendment on commencement.

I want to make two final comments because I know the Committee has been working hard in offering scrutiny to the Bill, but before I do so I wish to thank the Ministers, and indeed the whole team, who have tried to answer on what was on some occasions an impossible situation. Earlier the noble Lord, Lord Bates, aptly commented on how fast things have been moving, and I think the Ministers have had a degree of sympathy from the Committee. However, this is serious. As the noble Baroness, Lady Neville-Rolfe, said, businesses need urgency as they operate. They need urgency in their day-to-day practices but also when it comes to knowing what the Government’s position is.

In advance of the next stage, if there is one, it is helpful that all the usual channels are here. I do not think the Committee needs any reminding of the decision of this House, very clearly stated, that greater information is needed on both the Government’s policy and intentions on how it sees trade agreements being put in place, as well as the relationship with the devolved Administrations. If that is not forthcoming, the House has sent a clear signal that there will not be a Report stage. However, on the basis that there will be, the information that is needed on the current position on the intended trade agreements needs to be forthcoming. There also needs to be clarity on—if we are going to be crashing out on WTO rules—the position of operating on non-certified WTO rules.

The relationship with the devolved Administrations, while a little clearer, needs more fleshing out. This is not just about constitutional courtesies with the Scottish and Welsh Parliaments and Northern Ireland authorities. Trade agreements could disproportionately affect parts of the United Kingdom, which will affect livelihoods and public services in those areas. They need to be not just consulted, but involved. Contrary to the Government simply wanting continuity agreements for trading relationships, we also want to see the rolling over of the same amount of parliamentary scrutiny that the European Parliament would afford trade agreements, which this Parliament will be denied unless this Bill is amended.

Finally, we need to be looking forward to the future. The noble Lord, Lord Lansley, and others, have made very constructive contributions. If we are to have a customs arrangement—which, if it covers the majority of our trade with our biggest market, will be a customs union—then the clarity about how that will be conducted will be important. While we are at the end of the Committee stage, I hope that the Minister has received strong signals that there are still questions that need to be answered. Those answers need to be forthcoming before this House will consider the Report stage.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Committee: 1st sitting (Hansarad): House of Lords
Monday 21st January 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, we intend to exercise a considerable amount of scrutiny on the issues in Committee, but—as hinted at by the Chief Whip in his elegant speech, in which he kindly named me—we will also raise other points not specifically relating to the original narrow focus of the Bill but fitting more closely into the debate we have just had. I make no apology for that, because it is important that we probe the Government on their longer-term intentions and receive some assurances about where the particularities of this Bill fit in relation to that.

In moving Amendment 1, I shall speak also to Amendments 2, 3 and 100. This first group relates to the provisions in Clause 1(1) to set out the arrangements under which the Government can sign up to, and through regulations make changes to, the Agreement on Government Procurement. The GPA is an agreement between the EU and currently 18 countries to open up their public procurement markets, operating under a WTO framework. The Government intend that the UK should remain part of this system, becoming an independent member, and the Bill provides delegated powers to facilitate this, should it be required.

We have a number of concerns at that, some of which, in Amendment 1, are largely connected with the question of consultation about this process. The GPA itself is not a particularly interesting or informative document, but it does attempt to do something that I think all Members of the House would regard as a very good process and something we should support. It attempts to level the playing field for those who bid for and get government procurement contracts. It therefore makes it fairer, as all those involved in the GPA are able to bid for and secure work for their workforces, to earn money and to make profits out of that. In a sense it is an economic growth scheme founded on work that has been going on for some time trying to identify why relatively small numbers of companies bid for contracts offered by government under this system. I am sure the Minister, when she comes to respond, will say the UK is at the forefront of trying to open up its procedures; I know previous Ministers have also been concerned that we should have an open playing field and an open market here, so anything that can do that must be good and we would support that.

However, it is important that it is done in a process that reflects the wishes of the people more generally. It is therefore a little unfortunate that the Bill does not spell out the need for consultation not just among those directly involved, particularly local authorities and those groups, but also the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly, when it is resumed, which have a considerable amount of contract work going forward. So this is a widely spread requirement that the GPA will open up for broader discussion and debate and, I hope, greater access to it; it is reciprocal in the sense that it should also make it available to UK companies. Before we make regulations, we should encourage much more consultation to make sure that the regulations are appropriate and that the benefits and interests of those concerned are taken into account.

Amendments 2 and 3 are largely taken from comments made in the report referred to in earlier debate on the Select Committee on the Constitution in its report in October on the Trade Bill, which raised a few issues on how the regulations will be framed and brought forward. The starting point is that these regulations will be enacted with powers under the provisions modifying retained direct EU legislation, but the committee pointed out that there was some variation in the wording. I do not wish to quote the committee directly, but the conclusion is that the Government were recommended to include in the Trade Bill the definitions of retained direct principal EU legislation and retained direct minor EU legislation as used in the European Union (Withdrawal) Act 2018, and these make the substance of our Amendment 2.

Amendment 3 follows the comment made in the next part of the report that the Bill’s Explanatory Note states:

“Parliamentary approval for ratifying the UK’s membership of the GPA will be sought separately from the powers in the Bill itself and will be done in accordance with the procedures set out in the Constitutional Reform and Governance Act 2010”.


However, there is some doubt about exactly what the sequencing of that should be and which particular regulations and powers would relate to which. The suggestion therefore made in our Amendment 3 is to restrict the timing and quantum of regulation to a point in the system where previous approval has been received from Parliament under the CRaG Act.

The final amendment relates to what type of regulation should be required. The comment in the Constitution Committee’s report is that the regulations should be subject to the affirmative procedure and our Amendment 100 would put that in clear prose on the face of the Bill. The Bill itself may have been due to be amended by the Government when they came to respond to the Constitution Committee report, but so far I have not seen those amendments so we have aided them by tabling them and I commend them to the Committee. I beg to move.

[Lord Purvis of Tweed]

My Lords, I support these amendments and will speak to Amendment 100, which is in my name and that of the noble Lord, Lord McNicol. The Committee will be grateful to the noble Lord, Lord Stevenson, for tabling these amendments and allowing us the opportunity of looking in a little more detail at some of the consequences of the Government’s intention to, in effect, join an institution by virtue of leaving it. It is not automatically as straightforward as the Government may suggest. My understanding is that the approval in principle that has been made for the UK to join the GPA in its own right, separate from being a member of the European Union, has a number of riders attached to it that we will discuss when we come to Amendment 4A in my name. But on the strength of the amendments tabled by the noble Lord, one core element of consultation will now be important.

I took the opportunity to look at the schedules to the Canadian annexes relating to its membership of the GPA. It was interesting. One annexe specifies the 82 federal bodies; there are further annexes for each of the federal provinces with the organisations, bodies or elements of government that are included at a provincial level and the exceptions that they all bring to the GPA agreement. There is no automatic consistency across Canada because it is a federal system. In many respects, it is a model of what the United Kingdom’s could be when it comes to procurement policy and procurement agencies.

--- Later in debate ---

[Lord Stevenson of Balmacara]

My Lords, this group of amendments plays back themes that we have already discussed in the first and second groups, so I will not spend much time on them.

Amendment 6 suggests that additional consultation with relevant stakeholders would make it easier to understand what the process is in the clause. Amendment 7 tries to pick up the point which was made in a number of committees of your Lordships’ House and was raised in the other place when this issue was discussed. It replaces “appropriate” in line 16 on page 2 with “necessary”, because it implies that it is not a judgment on a passive basis of what may be considered appropriate, which may be a variable, and it has a particular purpose. I hope the Minister will respond to that.

Amendment 11 again came from the Constitution Committee’s comment, although it has not been picked up elsewhere, that it would be helpful to insert a refining phrase into the documentation related to whether legislation that is retained EU law might be better defined. We touched on this already. There was a concession that, although it was not thought to be strictly necessary in an earlier phase, it was appropriate that that phrasing could be adopted. I wonder whether that will also be the case here. I look forward to hearing the debate. I beg to move.

[Lord Purvis of Tweed]

My Lords, I support these amendments. They make eminent sense. I shall speak also to Amendment 101 in this group which, in essence, suggests that in moving forward on these agreements the CRaG process is not the most appropriate; and that there is a better way forward by ensuring a more appropriate role for Parliament, and for Parliament to have greater knowledge of why an agreement should be approved. In many respects, this is now becoming fairly standard procedure in other countries, where the Government give much greater information to Parliament about why agreements should be ratified and where each House of Parliament has a greater role on the basis of scrutiny by committees. I am convinced that when it comes to complex, deep and comprehensive agreements, the CRaG process will be shown not to be the appropriate route, and we will need to decide another. This Bill is a very good basis from which to start on a more transparent and open process.

As I mentioned earlier in the debate on whether the House resolve itself into Committee, our agreements amount to 60% of UK trade and are therefore highly significant. The complexity of trade agreements now—they go far beyond simply a discussion of tariffs and the financial element, and have wider impacts on domestic policy, as the noble Lord, Lord Kerr, mentioned—means they require a different form of engagement with Parliament. It starts with information and with greater understanding of the consequences of these agreements. It will no longer be acceptable that agreements such as these can be made under traditional prerogative power for Parliament simply to approve without there being a more meaningful process. That is the intent behind the amendment. It is meant in a positive manner. I believe it is framed in a better way than CRaG, and I hope it will gain support.

United States Tariffs: Steel and Aluminium

Debate between Lord Purvis of Tweed and Lord Stevenson of Balmacara

Tuesday 13th March 2018 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank the noble Baroness, Lady Fairhead, for repeating the Statement. This is my first opportunity to debate her at the Front Bench, and I am looking forward to working with her on the international trade Bill when it reaches your Lordships’ House.

We have, over the past year, heard regular statements about problems affecting our steel industry, although this announcement of tariffs on steel and aluminium imports, blatantly aimed at protecting US producers, must rank as one of the worst because of its implications more widely for free trade.

The House of Commons Library briefing paper on the steel industry in the United Kingdom 2016 suggested that the steel sector accounted for £1.6 billion of UK economic output, which is about 0.1% of the UK economy and 0.7% of our manufacturing activity. It has about 600 businesses, and 32,000 people are employed in the sector. The UK is the 18th-largest steel producer in the world, the fifth-largest in the EU after Germany, Italy, France and Spain. Approximately 15% of 350,000 tonnes of steel was exported directly to the United States in 2017.

We should extend our concern and support to the employees of British steel firms and their communities, which must be very worried about this questionable and ill judged unilateral decision by the USA. What assessment have the Government made of the impact of this decision on jobs in the steel sector and the economic hit that will be felt, particularly in communities outside London?

I have three further questions for the Minister. First, this announcement was not unexpected. It followed a series of pledges from President Trump to take what he calls “tough and decisive action” on perceived threats to the US national interest and to domestic producers as a result of international trade competition from overseas. It is very much in line with his “America first” platform. When did the Government become aware that President Trump was going to impose tariffs on imported steel and aluminium? What representations did the Government make to the White House prior to the announcement, and what assurances were sought that these tariffs would not be applied to UK exports?

Secondly, earlier this year, President Trump announced tariffs on imported washing machines and solar panels to give a boost to US producers in these sectors. President Trump also imposed a 30% tariff on imported solar cells, and last year the Department of Commerce sought to impose tariffs of up to 292% on imported narrow-body, medium-range jets until the US International Trade Commission accepted the arguments made by Bombardier and others and overturned that decision. What other sectors of the economy are the Government concerned about? What representations are they currently making to ensure that the UK will be able to export to the United States in the near term without facing unfair tariffs? For example, the President has mentioned additional protection for intellectual property. Given the strength of our creative industries, have the Government taken up that issue in particular?

Finally, the Secretary of State announced the establishment of a US-UK Trade and Investment Working Group in July last year, a group that has met twice since then. Given that the President has said he would welcome a trade war and thinks America would win it, what discussions have been had about steel, aluminium and the other new tariffs at these meetings? What assurances have been sought from the US Government about exemptions for UK exports in any free trade agreement that might be in consideration post Brexit?

[Lord Purvis of Tweed (LD)]

My Lords, we too are grateful to the Minister for repeating the Statement. Just at the time that we are loosening our ties with our largest single integrated market in the European Union, we see the next bilateral largest market in the United States moving towards a protectionist tone. Over recent months we have been repeatedly counselled by Ministers that we should look at not just the rhetoric of the United States President but at the actions. Now it is quite clear that there are repeated actions which are contrary to the interests of the British economy. The announcement of the Secretary of State today and of economic advisers last week are clear.

When I was in Buenos Aires as an observer at the ministerial conference of the WTO, the US left without a communiqué being signed. These worrying trends are clear to see. Last year, the Secretary of State, Dr Fox, said, while in the US, referring to the UK/US relationship:

“Firstly, we must lead by example, and work to encourage our trading partners across the world to support, and adhere to, the rules-based global trading system”.


Will the Minister therefore confirm that it is the view of Her Majesty’s Government that this action by the President is clearly contrary not only to how strong allies with a so-called special relationship should act but to international law?

We also know that in the presidential proclamation the President said that there would be a mechanism for reviewing the decision on impairing US national security if the countries concerned showed that their actions would not impair that national security. However, in recent discussions with the US, the EU and Japan could not discern on what basis these issues would be considered. What is Her Majesty’s Government’s view on these blackmail conditions that President Trump would seek to impose on allies for there to be adjustments to, or the removal of, these tariffs?

We have heard reference to the working group, which I have raised in this Chamber before. Did officials on the working group inform us that there was a likelihood of these tariffs being imposed on the United Kingdom? The Secretary of State indicated that he was due to visit the US and had no doubt planned to discuss the progress of the working group. What status does the working group now have given that we are clearly in a trade dispute?

Finally, we and our allies around the world continue to believe in free trade, even if the United States does not. How will we seek redress within the WTO mechanisms? Will the Minister reassure the House that we will be in precisely the same position as the European Union if we appeal for redress under the WTO mechanisms? This trend of protectionism cannot be in the interests of the United Kingdom. Clearly, our interests lie in standing shoulder to shoulder with our European Union allies on this issue.