Trade Bill (Third sitting)

Matt Western Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 25th January 2018 Public Bill Committees

[Iain Stewart]

Q I would like to get a sense from the witnesses of what the impact would be on the food and drinks sector, particularly in Scotland, if this Bill did not happen and we left the EU without the carry-over of the existing EU free trade agreements. Have you quantified the value of transferring over what we already have into our domestic legislation?

Sarah Dickson: For us, 10% of our exports go to those countries and benefit from them. I cannot give you an overall figure, but obviously, if you are not paying the tariff, you are not paying the tariff and you do not have that cost. It would make a difference to about 10% of our exports, and our exports were £4 billion in 2016.

Elspeth Macdonald: I do not have figures in front of me, but I think the document the Scottish Government published recently, “Scotland’s Place in Europe”, about business, jobs and the economy, touched on exactly those issues and put some economic analysis around some of that in terms of trade.

Gary Stephenson: All I can say is that I think about 37% of exports of food from Scotland are to non-EU countries, but we have not quantified exactly what the impact would be and how much of that is going to countries with a free trade agreement. I cannot give an exact answer, but it will have an impact.

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

Q My question relates to non-tariff measures, which you have all spoken about in varying ways; of course there are food standards, phytosanitary standards and so on. What level of consultation do you think is appropriate for the Government to carry out with the sectors affected, prior to any negotiation on those provisions?

Gary Stephenson: There has to be deep consultation. The people with the expertise are the ones shipping the products, so they need to be consulted in detail on those provisions, which are very specific. You mentioned phytosanitary; obviously seed potatoes are a big product for Scotland, and they are highly dependent on phytosanitary requirements.

[Matt Western]

Potatoes are?

Gary Stephenson: Yes.

Sarah Dickson: Our experience is that we are often the ones working with the EU to draft the provisions on whatever it might be—labelling, or other requirements that would be needed for a mutual recognition—so we currently work closely with the EU negotiators to provide them with the advice and support that they need.

Elspeth Macdonald: There is a more fundamental issue from my perspective. There are specific exemptions from reservation through the Scotland Act that make it a devolved function for technical standards to be set in relation to food. There is a fundamental question above: it is about not just the Government, but Governments having those discussions with businesses.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Q I have a two-part question, if that is okay, Chair. Gary, coming back to tariff-rate quotas, you suggested that different sectors should be able to have input. Do you have any concerns about devolved Administrations and their need for input, and about how, even if tariff-rate quotas are agreed via subdivision, those quotas will be allocated to the different nations in the UK?

Gary Stephenson: I think it is critical, particularly looking at some sectors, that the devolved Governments consult with sectors, and that there is a unified approach. This is too important to get parochial about. It is an important issue for the whole UK, but there is a higher impact in some sectors, particularly in Scotland and Wales; I am thinking of hill farming products and that type of thing.

--- Later in debate ---

[Alan Brown]

Does anyone else want to add to that?

Jonathan Hindle: The furniture industry has a similar exposure to migrant workers. We have a high degree of Polish migrant workers in the industry, particularly with sewing and upholstery skills. The unknown quantities about all of this have meant that some of them are leaving, so there is concern in the industry to provide some clarity, once again, about how we would deal with migrant issues for industry.

Gordon MacIntyre-Kemp: Again, some of our members have expressed concerns. In particular, highland hotels are saying that 65% to 70% of their staff during the summer are EU nationals and so on. There are significant issues in Scotland. I think that this shows, in terms of the overall remain vote, that immigration is seen radically differently in Scotland in terms of an opportunity to engineer the age of our society and bring skills to Scotland.

[Matt Western]

Q I have a quick question for Mr MacIntyre-Kemp. The very first line of the Bill says that the Bill is to

“Make provision about the implementation of international trade agreements”.

To elaborate on the point you were making earlier, what do you understand that to mean?

Gordon MacIntyre-Kemp: What do I understand the “international trade agreements” to be?

[Matt Western]

Q Yes. Do you think that is exclusive or—

Gordon MacIntyre-Kemp: Sorry. What do I understand “international trade agreements” to mean? They are basically agreements between countries that facilitate trade, such as TTIP and CETA and so on, and they have significant impacts on the different sectors, in terms of what sectors are opened up to particular trade deals. Now, regarding the EU, it already has trade deals with South Korea, Canada and so on. I think that is kind of basic.

However, there could be difficulties if there is not an exact definition in the Bill of what a trade deal is; I refer to evidence from legal experts on this issue, as well. It could mean that deals that are not specifically seen as trade deals can come under the remit of the Bill.

[Matt Western]

Q Right. So you see this as being fairly open? I think that is what you are saying.

Gordon MacIntyre-Kemp: More open than it possibly should be; not as restrictive as it—

[Matt Western]

It could be open?

Gordon MacIntyre-Kemp: Yes. It could be seen that way. I am just asking for it to be tightened up a little bit.

[Matt Western]

Q I have a question for Mr Hindle, just in relation to the British Furniture Confederation. I want to explore rules of origin and the complexity of supply chains. I have a particular manufacturer in my area; I know that a lot of its components come from Europe and a lot come from the UK. I just want to explore something. If our European content is no longer under the same rule of origin, what impact do you think that will have on future trading relationships for these companies or for us in markets other than Europe?

Jonathan Hindle: Fairly limited, inasmuch as when most people look for certificates of origin in tendering processes and evidence of supply chain in that regard, they ask for either an EU reference or a UK reference. If we were to devolve to a UK reference as a source of origin, it would carry equal weight in the minds of those in the particular markets that I am familiar with who often require that evidence.

Regarding the quantities coming out of the EU versus the UK, normally we are asked to make a judgment on a split and err towards the country of origin being where the majority of the material originates or where the bulk of the manufacture occurs. There are some guidelines that we tend to follow, along those lines. I am not hearing any concerns from our industry that that will present any problems. We continue to adhere to the current remit for declaring origin.

[Matt Western]

Q So you do not think that if, say, there was 60% of material from Germany or Scandinavian countries going into the components of British manufactured furniture, that would be an issue for your members?

Jonathan Hindle: Offhand, I cannot see it impacting the ability to trade effectively, or our competitiveness, or how we are perceived in any way; no, I cannot see that and I am not getting anything from our industry, as we poll it, to suggest any specific concerns on that particular point.

Of course, we have all the problems that we have had with a weak currency and all the inflationary impact that that has had, because most of our industry relies for a large part of its materials on continental Europe and elsewhere in the world. Weak sterling has had an impact and countered, if you like, the benefits that we might otherwise have enjoyed as an exporter from having a weaker currency on the other hand. It has been a double-edged sword in that regard.

[Matt Western]

Q Finally, would you very much like your sector to be involved in any TRA?

Jonathan Hindle: Very much so, yes. We would certainly welcome having someone on that TRA that understands our sector and all the nuances and complexities that have been alluded to—absolutely.

[Barry Gardiner]

Q Very briefly, Mr MacIntyre-Kemp, I understood your example about chlorinated chicken not to be because you did not realise that this Bill was not about doing a trade deal with America, but to be talking about the need for the devolved Administrations to be involved in determining what are in those trade agreements, because of the way in which they may impact upon the implementation of what are devolved competencies. Do you believe—and do you believe that it is the Scottish Government’s position—that there should not only be consultation but consent at that level for the trade agreements before they are implemented?

Gordon MacIntyre-Kemp: Yes, exactly, and as food safety is a devolved issue in Scotland—

Trade Bill (Second sitting)

Matt Western Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 23rd January 2018 Public Bill Committees

[The Chair]

We are having trouble with time and scrutiny as well. We have only two minutes left for Matt Western.

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

Q Professor Winters, this Bill is supposed to be about the roll-over of pre-existing agreements. If that is the case, why is it necessary to include the Henry VIII powers?

Professor Winters: Because the roll-over is not straightforward. Maybe you can say that this is an implicit recognition that it is not entirely straightforward and that there will have to be changes. Some might be purely technical, but some are clearly going to be substantive.

It is precisely because it is difficult, contentious and requires negotiations, that the Henry VIII powers are so important, because it is the Minister, their designated authority or delegate who will make those decisions.

[Matt Western]

Q Can you give an example of a substantive?

Professor Winters: The division of tariff-rate quota on cheese into Canada, or which bit of law financial services access to Korea will refer to. There are, I have no doubt, plenty of others.

[Matt Western]

Q Can I ask that of the others?

George Peretz: I am not sure I have much to add to that very complete answer to the question.

Does it require Henry VIII powers? It probably does require them because you have to amend primary legislation. The questions about the degree of scrutiny and so on, are, I think, questions for you, but the need for a pretty fast procedure to amend our law to deal with what will quite often be technical points that involve changes seems fairly clear.

[Alan Brown]

Q We have heard that Wallonia has got a veto. The devolved nations do not have a veto in this. Indeed the UK Government can make provision in devolved competencies. If you were a Scottish or Welsh Minister, would you recommend withholding a legislative consent motion unless this Bill was amended?

Michael Clancy: When I get elected?

--- Later in debate ---

[Judith Cummins]

Q Unfortunately, my original question was to Mr Stace, but I will ask it to Mr Stevenson. Clause 6 of the Bill suggests that the TRA’s remit will extend to more than just trade remedies and to the analysis of trade disputes. Does that raise any concerns?

Cliff Stevenson: In principle, I think it is not necessarily a bad idea—that if you have an organisation full of trade expertise, you might use it for other purposes as well. I mentioned Canada earlier. The Canadian international trade tribunal, the independent entity that makes determinations on injury, can also be given other tasks and produce expert reports. So I do not think it is a bad idea in principle that the TRA may do other things. The concern would be about resourcing.

Trade remedy investigations are highly resource-intensive. They are incredibly detailed. Gareth mentioned earlier about the dumping calculation being easy. In a sense, what he was saying is that it is straightforward, the steps are very clear—but it is a massive calculation with thousands of data entries on a spreadsheet or in a model. To the extent that there would be a concern, it would be to ensure that there was sufficient capacity ring-fenced for the different functions. Principally, it seems to me that the Trade Remedies Authority’s purpose is the administration of the trade remedy regime. That would be the only issue I would raise.

[Matt Western]

Q We heard from Mr Stace a moment ago about an effective trade remedies system. In that one example, an effective system does not necessarily lead to higher consumer prices or significantly higher prices. Do you have other examples you can give, Mr Reynolds?

Tom Reynolds: One example I can give you is from MTRA partner sectors, the chemicals fertiliser sector, around the long-term implications for the consumer if adequate trade remedies are not installed. In Ireland, for instance, the domestic manufacturing industry for fertilisers sadly went by the wayside, because the anti-dumping measures were not introduced in time to provide a defence for their industry. As it became a less attractive market because of less competition, the prices started to rise for all the previously dumped exports, so the lack of competitive environment in Ireland ended up costing farmers more for their fertilisers.

Cliff Stevenson: Obviously, it depends on the product, because when you are talking about products used in another industry, such as in the case of steel, even a fairly substantial anti-dumping duty, if you work it through to the final price to the retailer of the downstream product, is going to have a much smaller effect. Obviously, in the case of a consumer product, where the product goes directly to the consumer, the impact of the duty would be exactly at the level of the duty, so that is certainly true.

It is important always to consider what the purpose of trade remedies is. They are about remedying a distortion, an anti-competitive situation or a subsidy. In that way, any time you increase a duty the users, the importers, or the consumers of that product are going to face the negative impact of the increase in duty. What is really important to remember about trade remedies is that they are not about protecting domestic industry, I do not believe. They are about restoring effective competition. That is a key point. Even if a consumer product does increase in price, in the long term the consumer is better off if effective competition is maintained.

[The Chair]

Are there any questions? No. May I thank you both very much for your very useful evidence? I am sorry that a Division disturbed the middle of your session—these things happen in Parliament. It was very kind of you to come, so thank you very much. If the next witnesses are here, perhaps they would like to take the stand.

Examination of Witnesses

Anastassia Beliakova, Stephen Jones, William Bain and Edward Bowles gave evidence.

Public Sector Pay

Matt Western Excerpts

Monday 4th December 2017 Westminster Hall

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

This was before my time, so correct me if I am wrong; a few years ago it was voted through that Members of Parliament would receive a pay increase. If the principle was right then for MPs and it was seen to be appropriate, why is it not appropriate for all our public sector to receive a pay increase?

[Andrew Jones]

The hon. Gentleman is perhaps not absolutely correct about the process. That also predates my time in the House and goes back to the expenses crisis in 2007 and 2008. Any hon. Members who have been here a bit longer are welcome to jump in, but I think that at that point, Parliament basically gave all responsibility for its pay rises to an independent body. Since then, I do not think that it has voted on the matter. I have certainly never voted on Members’ pay. I recognise that that is a contentious point, but Parliament is no longer responsible for its pay.

--- Later in debate ---

[Andrew Jones]

I accept that—I was actually quoting the shadow Chancellor. Let me press on. The pay review bodies will consider evidence from stakeholders, including employers, Governments and unions, and they will make their recommendations in spring and summer next year. Secretaries of State will use the recommendations to inform the final pay awards in the normal way. The PRBs’ recommendations will recognise the wider economic context. The need remains for continued fiscal discipline, and Departments will take that into account when making any decisions.

Many Members have mentioned the NHS, which I want to spend a bit of time discussing. First, the Government are entirely committed to the NHS. Funding for the health service is at record levels. [Interruption.] Opposition Members may mock, but funding is in fact at record levels. They should be doing what we are doing, which is backing the service.

We know that pay restraint has been challenging and we are listening to the concerns of NHS staff and their representatives. We recognise that the NHS now faces greater pressures than at any point in its history, and the reasons for that are an ageing population, which is a significant challenge for western economies, and the greater demand that we are therefore seeing for NHS services.

[Matt Western]

rose—

[Catherine West (Hornsey and Wood Green) (Lab)]

rose—