Trade Bill (Sixth sitting)

Matt Western Excerpts

Committee stage & Committee Debate: 6th sitting: House of Commons
Tuesday 23rd June 2020 Public Bill Committees

[The Chair]

I call Mr Western.

[Matt Western (Warwick and Leamington) (Lab)]

Thank you, Sir Graham. I rise to speak very briefly. I concur with all the comments made by my hon. Friends and will not rehearse many of them. I would just say that we should remember the famous line from the film, “Infamy! Infamy! They’ve all got it in for me!” There is something about scrutiny and more scrutiny. We have to keep repeating the word, because it is so important for all of us, wherever we sit. Whether we are Government Back Benchers or Opposition Members, the opportunity for scrutiny is important. Trust and transparency are in short supply and it is critical for the validity of this place that they are restored. There is likewise a matter of competency, which I will come on to. How do we face the challenges of the trade deals before us and ensure that we have sufficient competency and capacity?

The issue is secondary legislation and what Ministers are permitted to do that allows them to avoid full scrutiny. As such, the affirmative process in the Bill will not allow us the checks and balances that our constituents require, irrespective of the territory, geography or community that we represent. There will be serious issues that will fall to Government Ministers, and it should be a great concern for hon. Members on both sides of the Committee to make sure that Ministers can be held to account.

The process should be iterative. A great thing that we found out when the International Trade Committee visited Canada and the US was how involved their Parliament and Congress are in the process of determining and setting parameters for their trade representative bodies. That is what we should be pushing for: from the beginning, we as parliamentarians should have more say on the direction that the trade representatives take in negotiating our position.

We mentioned the situation with vehicles and what that means for our automotive sector, but irrespective of the sector or region that is up for discussion, trade deals will have an impact. It is about understanding those impacts through modelling, so a value decision or judgment can be made. Understanding and appreciating the consequences of that sort of trade deal was important in the evidence given to us by the Australian trade people and, likewise, the US and the Canadians.

I mentioned what we discovered several months ago from the South Koreans about where they were in their negotiations and discussions with the UK. It was all published online but there was nothing from our side, which should not be the case. I do not see how any of us, Back Benchers or Front Benchers, in government or in opposition, can face constituents or the major businesses that each of us have in our constituencies and say that we are unaware of what is going on on their behalf. In contrast, the Koreans—in the case of vehicles, the Kias, Hyundais, Samsungs and so on—will be totally aware of what is going on in the negotiations.

Trust and transparency are important because, without scrutiny, the process will lead to poor governance. As has been said by my hon. Friend the Member for Harrow West about events in the recent crisis, if more had been put into the parliamentary domain and if there had been more involvement across the House, perhaps we would have avoided some of the difficulties that we have experienced. We have to avoid a bunker mentality. It is not healthy for the Government or for the reputation of Parliament.

As has been said, while we are sitting here, many trade deals are being discussed, such as the UK-Japan deal, the UK-Australia deal, the UK-US deal and so on. They are seriously huge undertakings. In our evidence sessions in the International Trade Committee, we discovered that many such trade deals typically take six to eight years, yet the Japanese are telling us that they want a trade deal within six weeks. That is terrific—good for them—but they are holding us in a difficult position. They know that we need a trade deal, but it will be on their terms, because we are in a weak position. None of us want to be in that weak position.

The Australians are saying, “Yes, we will have a trade deal within a year.” Again, that will be very much on their terms. That is the sort of understanding that we need to share with the public and that needs to be shared in this place, so that we fully appreciate what the consequences of those decisions will be.

As we heard in the evidence sessions last week, there is no real rocket science about it. The ideal approach to negotiating trade deals is that there is involvement through parliamentarians, through consultation with trade unions, with business sectors and so on. It is understood, through some sort of guaranteed debate, what is trying to be achieved. Then, during negotiations, texts are published and updates are given. That is what the US, the EU and other nations such as Australia do. The negotiated deal can then be put to a formal voting process for ratification. However, it seems the Government do not wish to do that. Looking across the room here, that has to be of concern, irrespective of the constituencies we represent, because of what it means economically and what it means for some of our businesses, the agriculture sector and so on.

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[Greg Hands]

I thank the hon. Gentleman for that intervention and I am glad that he made it, because I will take him back five years to a very interesting negotiation that I had with his friend, John Swinney, which was a negotiation between the UK Government and the Scottish Government. It related to the Scottish fiscal framework: how exactly Scotland’s finances and support from Westminster would work in coming years. We—John Swinney and I—agreed that it was a negotiation between two Governments, and it was not appropriate to publish text during the course of the negotiation. We would both provide general updates on the progress of the negotiation, rather than constant updates on text. That approach led to us getting a good agreement between the UK Government and the Scottish Government. I think both Governments were not entirely satisfied with it, but both could live with it. That shows the way forward, rather than publishing after each negotiation round, or mid-negotiation, what the latest text or approach is.

[Matt Western]

I hear that, and it is terrific, whatever happened between Scotland and the UK in that arrangement, but nub of this is essentially: how can it be that the EU informs and updates, providing not just heads of terms and whether things are going okay or badly or whatever, but the detail? That is what the US does and what Australia does. Why is the UK the only nation that will not give that detail to its public?

[Greg Hands]

Sir Graham, I think a comparison of how the UK and European Union do international treaties is a debate for another day. I do not think the two political systems are comparable. The approach proposed by the UK has greater parliamentary scrutiny than that of many Commonwealth counterparts that use the Westminster system—it is more extensive than that of Canada, Australia and New Zealand.

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[Greg Hands]

I will make a bit more progress.

As with new clause 5, new clause 8 contains a number of practical flaws in the proposed system. Those flaws would undermine negotiations and disadvantage the UK. I understand that colleagues are keen to remain abreast of negotiations, and the Government are supportive of that endeavour, as I have outlined. I point hon. Members not just towards our commitments to share information but towards our record on the recent US negotiations, which I have mentioned.

Ultimately, this debate boils down to whether we believe that it is right that the UK Government, supported by experts, civil service negotiating teams and advisers, are able to negotiate international agreements on behalf of those who elected them, drawing on the expertise and views of Parliament and of the devolved authorities, via strong scrutiny mechanisms. Or do we believe that Parliament itself should be in control of the negotiations, determining who we negotiate with and how, and within what timeframes?

It seems clear to me that in the national interest, the former scenario must be right. It ensures that when our partners face the UK around the negotiating table, they know that it has a credible single voice—one that is represented by the UK Government alone, after they have consulted with the devolved Administrations and drawn on the extensive expertise in this House and the other place, via close engagement and scrutiny processes, such as those we have here for international agreements.

[Matt Western]

I understand that point. The EU has 27 nations, and yet it manages to achieve that. It has a coherent position from 27 nations, but it can still carry out talks. Surely, it is possible for us to have the involvement of Parliament to scrutinise matters and to be updated about them, and to have its engagement in this process. Can the Minister just answer that one point?

[Greg Hands]

I have already outlined in immense detail, probably three or four times now, the involvement that Parliament will have in future trade agreements. I remind the hon. Gentleman that the Bill is about the continuity of existing trade agreements. I may be the only person in this room—perhaps the hon. Member for Harrow West has done so as well—who has represented the UK at trade Foreign Affairs Council meetings of the European Union. I can reveal to the hon. Member for Warwick and Leamington that the EU does not always speak with one voice when it comes to trade. I can tell him of many a fruity row at those meetings involving different member states—rows between the Commission and the European Parliament and so on in relation to EU trade policy. I am afraid that the idea that the EU is one happy whole as it goes into trade agreements, with total uniformity of opinion across the EU27, is for the birds.

I hope that I have provided Members with some assurance that the amendments are unnecessary and impractical, and will unquestionably limit the UK Government’s ability to negotiate in the best interests of UK businesses, consumers and citizens.

On a slightly different topic, new clause 19 seeks to oblige the Government to publish parliamentary reports on continuity agreements, which the hon. Member for Harrow West has already drawn attention to, outlining any significant differences between the signed agreements and the underlying EU agreements. I am aware that, in the last Parliament, the Government introduced an amendment to that effect to the previous Trade Bill. However, Members will be aware that, despite the previous Bill falling, we have committed to publishing such parliamentary reports on a voluntary basis, to assist the House with the scrutiny of agreements.

We have published such a report for each of the 20 continuity agreements we have signed, outlining any significant differences from the underlying EU agreement. That process affords parliamentarians extra transparency on our continuity agreements, above and beyond the statutory framework set out in CRAG. As is demonstrated by the measures we have taken, and by the inclusion of a sunset clause and the affirmative procedure for any secondary legislation, we will ensure that Parliament’s voice is heard when clause 2 powers are exercised. I reiterate the commitment that we will continue to publish parliamentary reports for all remaining continuity agreements.

I suspect the Committee will be glad to hear that I am finally turning to new clause 20, which stipulates that the parliamentary reports must be published at least 10 sitting days before any statutory instruments are made under this power. Members will be aware that trade negotiations, and indeed many other international negotiations, have a habit of going down to the wire. I have only to remind colleagues of the negotiations surrounding the EU withdrawal agreement as evidence of that fact, although that negotiation is not included in the scope of the Bill, perhaps thankfully. As such, it is possible that we will be unable to sign continuity agreements until very shortly before the transition period ends.

I stress that that is possible. We have already signed 20 such agreements, but some may well finally be negotiated and signed in the last days before the UK once again becomes a fully independent trading country. That would make it very difficult to leave a period of 10 sitting days before any SIs are introduced. I assure colleagues that we will leave as much time as possible for essential parliamentary scrutiny. I point again to our record: we have published parliamentary reports alongside all signed agreements entering the CRAG process, meaning that that information has been available for at least the full duration of CRAG. I remind colleagues that CRAG allows a period of 21 sitting days for our agreements to be scrutinised in Parliament before they can be formally ratified. That provides an effective period of time for parliamentarians to scrutinise the agreements.

Turning to a few of the more technical matters that have been raised, the Opposition said that the South Korean and Swiss agreements have not been signed. They have both been signed and have both gone through CRAG. The House of Lords European Union Committee called the Swiss agreement for debate but, as I said earlier, no motion of regret was passed. The hon. Member for Brent North (Barry Gardiner) loved to talk about the Ponsonby rule, which is exactly what CRAG sought to codify. The Ponsonby rule, if it exists at all today, is there only through the living embodiment of CRAG.

The Opposition talked about the mutual recognition agreements incorporated within the Swiss agreement. The MRAs that have been signed and are part of the agreement cover 70% of our trade flow. On a technical point, we have in place a memorandum of understanding to continue discussions about trade continuity before the UK-Swiss trade agreement comes into effect on 1 January. We are committed to aiming to put in place mutual recognition of conformity assessment bodies in time for the agreement coming into effect.

The sectors not covered by the MRAs are underpinned by international standards regimes, not by EU standard regimes. There is therefore greater regulatory confidence in conformity assessments within these. On tariffs and the South Korea agreement, the hon. Member for Harrow West effected some kind of melange between tariffs and tariff-rate quotas. A tariff is the rate of tax at which we charge a product coming into the country; a tariff-rate quota is the quantity of that product that would be allowed on either a lower tariff or on no tariff at all.

Tariff-rate quotas have been resized from the original EU agreement. That is an entirely normal and expected part of the process. The TRQ stated that a certain volume of this, that or another product—the example of Cheddar cheese was used—is allowed to enter from the EU into South Korea without a tariff or with a lower tariff being applied. That volume is apportioned in the ensuing agreements: this part of the tariff-rate quota belongs to the European Union, and this part of the tariff-rate quota belongs to the UK.

How do we determine which part goes to which? Generally, the way in which to do this, which the European Union has agreed, is to look at recent trade patterns, take the average of recent years and say that a part should be determined to be the EU’s and another part should be the UK’s? If no UK products have been exported to South Korea under the tariff-rate quota, the effect will be that the tariff-rate quota ends up going to zero in the ensuing UK agreement, but it may well be that we end up with far more than the UK overall trade flow in the ensuing South Korea agreement in other areas. It simply is not the case that we have lost our tariff-free access, if it is a product that the UK does not currently export to South Korea under the tariff-rate quota.

Crucially, the tariff reductions are in the ensuing UK agreement. Whereas the tariff-rate quotas divide up, the agreed tariff reductions carry on. That is particularly relevant to Cheddar cheese. Tariffs on Cheddar cheese entering South Korea under the EU-Korea agreement have been coming down steadily each year since 1 July 2011. From 1 July 2021, UK Cheddar cheese will be free of customs duties entirely as a result of that gradual stepping-down process, which affects Cheddar made in the EU as much as it affects the UK. There has been no change in that and no loss in our preferential tariff treatment in the UK-Korea agreement.

I have talked at length about the Command Paper and one or two other things. I have responded to each of the points made by Labour Members, possibly to their satisfaction. I find various things a little bit rich. I think I heard regrets from the Labour Front Bench that we will not be able to transition the EU-Canada agreement. I remember, because I was doing this job at the time, a large part of the Labour party, including current Front Benchers, voting against the EU-Canada agreement even coming into effect. So Labour was opposed to the agreement three years ago, but now they suddenly complain that we are not being quick enough in transitioning it to a UK agreement. If there was any consistency in the Opposition’s approach, they should be cheering any delay to an agreement that they do not agree with. I find their position typical of the chaos still present on the Opposition Benches. They complain that we have not rolled over an agreement that they did not want to be part of anyway.

The hon. Member for Putney, who started off regretting the vote four years ago today to leave the EU, then made a speech questioning the trade agreements negotiated by the European Union that we are seeking to roll over. There must be more consistency.

I appreciate that the Labour party has had a leadership change. I thought that the whole basis of the new leader’s approach was to bring organisation and method to its opposition, but instead, we have seen continuing chaos. We see a shadow Front-Bench spokesman who now objects to the agreements that they presented when in government, and a shadow Front-Bench team who now want to roll over the Canada agreement that they originally voted against. Those on the shadow Front Bench regret the Brexit vote but now want to vote against our transitioning the very agreements that the EU, with UK participation, negotiated successfully. That is a recipe for chaos and one that the Opposition would do well to reflect on.

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[Bill Esterson]

I beg to move amendment 11, in clause 2, page 2, line 23, at end insert—

“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not conflict with, and are consistent with the United Kingdom’s environmental obligations in international law and as established by but not limited to—

(a) the Paris Agreement adopted under the United Nations Framework Convention on Climate Change;

(b) the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES); and

(c) the Convention on Biological Diversity, including the Cartagena Protocol on Biosafety.”

The Government say they are committed to addressing the climate crisis and to net zero by 2050, even though they have missed the targets set by the fourth and fifth carbon budgets and the gap is getting worse, and even though their own analysis shows that their spend on nuclear export finance for energy projects has favoured the fossil fuel sector substantially, to the point where 99.3% of that budget spend over a five-year period went to fossil fuel projects, including recently to Bahrain. There is no sign of a real and meaningful switch away from fossil fuels and to renewables.

The Government can say that they are committed to something, but unless something is in legislation and in writing, and unless there are meaningful commitments, the situation does not change. That is why it is important to amend legislation such that we confirm our commitments to the Paris agreement, the convention on international trade in endangered species of wild fauna and flora, and the convention on biological diversity, including the Cartagena protocol on biosafety.

[Matt Western]

What was telling about the evidence sessions was how everyone—including the Institute of Directors, the CBI, ClientEarth, the TUC—agreed that this type of amendment should be at the heart of what we do, and that they were disappointed that it was not included.

[Bill Esterson]

My hon. Friend is absolutely right. The Bill really should be the framework for what a progressive international trade policy framework should look like. There was an opportunity. Given that the Government did not pass the Bill when they had the chance last year or the year before, they could have included the provision this time. This amendment would produce a framework of the order expected by the witnesses.

There are real problems in international trade that affect our ability to meet our climate obligations. Trade agreements are used to liberalise regulations, including environmental regulations. The Bill is an opportunity to redesign trade policy to support our environmental ambitions, as the Government set out. The target of net zero carbon emissions by 2050 and associated commitments are in our amendment. The opportunity is there for the UK to require trade partners to ratify and implement key climate change agreements, such as Paris, before entering into trade negotiations, and for us to suspend ISDS agreements.

Environmental policy has been the object of investor-state dispute settlement litigation. Companies that have fossil fuel interests have sued other companies’ Governments because of the impact of Government regulations and legislation on their interests. That undermines investment and support for the renewables sector, and efforts to decarbonise economies and meet our climate obligations. Similar points are made about the convention on international trade in endangered species of wild fauna and flora, and the convention on biological diversity. If the Government want to address this agenda, they have an opportunity to do so with this amendment, and I hope they take it.

Given that the Bill is widely drawn and has the potential to address future trade agreements, let us look at what the US has been saying. This should worry us, given the damage that could be done by international trade agreements. In December, the US ruled out talk of a climate crisis in trade negotiations—yes, that is what trade representative Lighthizer said. He was categorical about that when the UK inquired—I am pleased that the UK did this—about the possibility of including reference to climate change in a future UK-US trade agreement, given that the UK has a strong historical stance on climate change and pushed strongly for the Paris agreement. The UK also highlighted in those talks the pressure for that that would come from civil society and non-governmental organisations. My hon. Friend the Member for Warwick and Leamington referred to the evidence that the Committee received.

What was the response from the US? It

“responded emphatically that climate change is the most”

politically sensitive

“question for the US, stating it is a ‘lightning rod issue’, mentioning that as of 2015,”

US trade representatives

“are bound by Congress not to include mention of greenhouse gas emission reductions in trade agreements. US stated this ban would not be lifted anytime soon.”

The US trade representative went further:

“we have an obligation to help real working people...there’s no point in being so ambitious we don’t end up with an agreement at all”.

The problem with that statement, of course, is that it is not one or the other. In the end, real working people need a planet that they can live on. They need the global temperature not to increase by more than 1.5°. They need the action on climate that will deliver that agenda. They need the jobs that will come from investment in low carbon industries now and in the future.

We should be worried about what the US is saying on this subject. We should take note of it and make sure that if the price of an agreement with the US is to oppose action on addressing the climate crisis, it is a price far too high for us to accept. I hope the Government will take the amendment on board, because there is nothing in it that is not in accordance with Government policy.

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[The Chair]

I remind the hon. Lady to refer to Members of the House not by name, but by their constituency. I call Matt Western.

[Matt Western]

Thank you, Sir Graham. Very briefly, we have heard from Members across the Committee about our constituents’ concerns, and those of last week’s witnesses. We have only to think back to some of the extraordinary campaigns by Jamie Oliver, Hugh Fearnley-Whittingstall and others, who highlighted some of the terrible practices that were going on in the food chain, to realise that the public are very much in favour of an organisation such as the food and farming standards commission that has been proposed by the National Farmers Union, to ensure that our farming standards and food standards are maintained at the highest level.

We have some of the highest standards in the world. We also happen to have some of the cheapest food prices, due to the competition that we enjoy in this country. The question is what we would gain from not adding such an amendment to the legislation, and not including a food and farming standards commission. It is very easy to talk about the United States in isolation, and the concerns that the public have over such things as hormone-treated beef or chlorinated chickens. As I mentioned earlier, producers in Australia also supply that market, and have industrial-scale battery caged hens producing vast quantities of eggs.

It is likely that in any UK-Australia trade deal we would lose at least 20% of our current market of eggs produced in the UK to Australian producers. That is the sort of impact that we need to understand. I think the farming community is beginning to understand it fully. Consumers need to understand it as well because, at the end of the day, it is this sector that will be sacrificed in any future trade deal.

Just look at the YouGov poll that I think was announced in the last 24 hours. Some 80% of consumers do not want chlorine-washed chicken. They appreciate and enjoy very high standards currently and they do not want to see such standards reduced in a future trade deal, whether with Australia, the US or anywhere else.