Trade (Australia and New Zealand) Bill

Nigel Huddleston Excerpts

Report stage
Monday 12th December 2022 Commons Chamber

[Geraint Davies]

I am certainly a big supporter of what the EU is doing on carbon border adjustments, for instance ensuring that we have a level playing field for steel made in south Wales, which emits half the carbon of Chinese steel, and that there is an incentive to invest in green production domestically. The EU has taken a lead and we need to catch up. The United States is subsidising green industry and, as my hon. Friend will know, there is a tension between the two different strategies when it comes to ensuring a sustainable and greener future for all.

Turning to procurement, clearly it is not exactly a new idea that big multinational corporations will use unelected, private, often secretly held tribunals to try to fine democratically elected Governments who want to pass laws to protect the environment and public health. We saw that in investor-state dispute settlements. Most obviously, at the moment, we have got the Energy Charter treaty, which binds countries for 20 years to being sued if they try to pass laws to help the environment.

People will know that Germany, France, Poland, Spain and others are trying to withdraw from that treaty, although we have not heard much for the United Kingdom—because of its fossil fuel interests, I assume. My question is: why, when we know those companies will be quick on the draw in taking us to court and suing us, do we allow them a way in on procurement, so that when they do not get the business with the NHS, they can suddenly sue us? That concern is covered in new clause 1, which I very much support.

Finally, it is obvious that, out of the carnage of the botched Brexit deal, while obviously we want deals with Australia and New Zealand, the haste with which we have approached these deals has left us in a situation where they get all the benefits and we face a prospective loss. That is absolutely disgraceful maladministration from the Government, and I support the amendments to try to mitigate some of the harm done by their hopeless negotiation.

[The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)]

May I say what a pleasure it is to speak on behalf of the Government today as we scrutinise this landmark piece of legislation? I thank colleagues for their contributions to the debates on this Bill, including the general debate, where many of the points raised today were also covered and responses were given by my hon. Friends on the Government Benches. I will try not to repeat that debate now.

The Government are of the view that the amendments tabled are ultimately unnecessary, and I hope that I will be able to persuade right hon. and hon. Members to withdraw them. The new clauses that deal with issues on impact assessment are unnecessary, as the Government have already committed to undertake assessments of impact of these deals at regular intervals.

First, the Government have committed to publishing a monitoring report every two years and a compressive evaluation report for each of the agreements within five years of their entry into force. Those evaluation reports will aim to show how, why and for whom the agreements and their implementation have delivered, addressing many of the points raised by hon. Members in the debate.

[Hywel Williams]

Can the Minister therefore confirm that there will be detailed assessments for Wales, including within regions and sectors in Wales?

[Nigel Huddleston]

We will be happy to discuss with many stakeholders the precise nature, content and scope of those reviews, and we will do that in due course.

This Bill is based on procurement, but while procurement is the only area that requires primary legislation for implementation, it should not be the only area that is subject to review. Therefore, publishing and considering impact assessments that only cover procurement implementation would not be an effective use of parliamentary time, nor would it give parliamentarians a full picture of the economic impact of the agreements. On multiple levels, the proposed amendments relating to impact assessments would not be fit for purpose.

Regarding the negotiation of the procurement chapters, both chapters build on the baseline in the World Trade Organisation’s agreement on Government procurement, or GPA, setting new international precedents, notably on data transparency and facilitating SME involvement in procurement. While all negotiations are different, my Department is committed to learning from each negotiation and applying those lessons directly to its work. I am confident that that approach towards negotiating procurement chapters allows for high-quality chapters that work well for British business and consumers.

As mentioned by several hon. Members today, the Bill Committee heard evidence from Professor Sanchez-Graells. We respectfully disagree with the professor’s reading that the chapters do not align with the GPA or that suppliers will not have access to legal remedies against contracting authorities and so cause confusion for and disadvantage British businesses. We do not believe that is the case. My predecessor, my hon. Friend the Member for Rochford and Southend East (Sir James Duddridge), wrote in detail to the Committee on that and I have nothing more to add.

The Government are resolute in our determination to protect the NHS, recognising that it is an institution that is very important to the UK and its citizens. That is reflected in the specific protections negotiated in respect of the NHS in the agreements: health services are expressly excluded from coverage under the procurement chapters and both agreements specifically refer to the NHS and the general exclusions that apply to it.

On small businesses, the procurement chapters in both agreements include articles on facilitating the participation of SMEs in procurement. We will have people on the ground in the UK, Australia and New Zealand to help to fully exploit the opportunities, and I can assure the hon. Member for Strangford (Jim Shannon) that we will be providing that support across the UK. The Government have an active agenda of facilitating SME participation and continue to advance that agenda across the free trade agreement programme. We have consulted with businesses throughout the negotiations, including with small and medium-sized enterprises, and will continue to do so throughout the implementation.

On protecting farmers—again, a hot topic in previous debates—in both the Australia and New Zealand FTAs, the UK secured a range of measures to safeguard our farmers, including tariff rate quotas for a number of sensitive agricultural products and product-specific safeguards for beef and, for Australia, sheepmeat, alongside a general bilateral safeguard mechanism providing a temporary safety net for all products. Equally, this Government are committed to ensuring that UK farmers have the tools they need to secure the export benefits of these trade deals.

Additionally, it is unlikely that products from Australia or New Zealand will flood the UK market. In 2021, more than 80% of Australian beef exports and nearly 70% of Australian sheepmeat exports went to markets in Asia and the Pacific. New Zealand already has a significant volume of tariff-free access into the UK for sheepmeat but used only a third of that quota in 2021, meaning that New Zealand could already export more sheepmeat to us tariff-free, but chooses not to.

[Geraint Davies]

If New Zealand is not utilising its current quota, why have we chosen to give a completely unlimited quota in 15 years’ time? Given the Minister’s reasoning, New Zealand presumably does not need it, and it just exposes us to unnecessary risk.

[Nigel Huddleston]

All negotiations involve give and take. The hon. Gentleman will also acknowledge, I am sure, that we are also seeking market access right across the globe for farmers and our fantastic food and beverages—for example, by opening up the market in the US for sheepmeat for the first time in 20 years. At the same time, we are seeking opportunities right around the world. Of course, as several hon. Members have mentioned, we are proud of our high animal welfare and food safety standards, which is why we are ensuring that this deal does not compromise on them and that no new permissions for imports such as hormone-treated beef were granted.

On the Government’s engagement with the devolved Administrations, right hon. and hon. Members will be aware that the Minister for Trade Policy, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), chairs the inter-ministerial group for trade, previously known as the ministerial forum for trade. That forum provides an opportunity for discussion on all matters of trade policy, including the implementation of UK free trade agreements. The forum is not the only opportunity for ministerial discussions; there are frequent bilateral meetings between Ministers. Indeed, later this week, my right hon. Friend is set to meet the Scottish Minister for Business, Trade and Enterprise, to whom I spoke last Tuesday. I also spoke to the Welsh Minister for the Economy on 1 December on a similar basis. In addition to ministerial engagement, discussions with devolved Administrations at official levels have totalled hundreds of hours across the Australia and New Zealand FTAs, including frequent updates by chief negotiators and detailed discussions to draft text.

It may be helpful to also remind the House that on Second Reading, the previous Secretary of State for International Trade, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), who is sitting near me now, committed at the Dispatch Box never to use the power in clause 1 without consulting the devolved Administrations first. That is a sincere commitment, and one that we will honour.

[Hywel Williams]

Is not the Minister confirming that taking back control extends to Ministers and officials in the devolved Governments but not to the elected representatives?

[Nigel Huddleston]

I am afraid that the hon. Member is misrepresenting the situation. In terms of concurrent powers, this is an established part of our devolution settlement. We are not, in these proposals, proposing anything unusual.

The breadth of our trade agreements means some policy issues will be within the competence of the devolved Administrations. The Government have always recognised that modern trade deals cover an increasingly broad array of policy matters. To enable more technical discussions, of course, we share draft treaty text with devolved Administrations for comment. That facilitates more detailed and comprehensive discussions between Department for International Trade officials and officials in devolved Administrations. There have already been discussions with the Scottish Government on the drafting of secondary legislation. In respect of the amendments, I understand that the Scottish Government wish to make the necessary statutory instrument to amend Scottish procurement regulations.

On new clause 12 and its consequential amendments, the super-affirmative procedure is used for statutory instruments when an exceptionally high degree of scrutiny is thought appropriate. An example would be remedial orders, which the Government can use to amend Acts of Parliament should the courts find them in breach of the European convention on human rights. It is therefore wholly disproportionate to use that process to approve a minor technical change needed to implement procurement commitments in the Australia and New Zealand deals. The potential unnecessary use of the affirmative or super-affirmative procedure could lead to delays in those agreements entering into force.

The Government are working to enter the agreements into force to ensure that UK businesses and consumers can benefit from the significant economic advantages as soon as possible. That is, of course, also the desire of the Labour Governments in Australia and New Zealand.

I hope that I have reassured hon. Members and that they will not push their amendments.

[Gareth Thomas]

It is always a pleasure to listen to the Minister, but it was rather striking that not one Conservative Back Bencher was willing to come along tonight to defend their party’s deal. We have nevertheless had an important debate with important speeches from my hon. Friends the Members for Preston (Sir Mark Hendrick), for Brighton, Kemptown (Lloyd Russell-Moyle) and for Swansea West (Geraint Davies), and the hon. Members for Gordon (Richard Thomson)—whom I congratulate on his appointment—for Chesham and Amersham (Sarah Green), for Strangford (Jim Shannon) and for Arfon (Hywel Williams), as well as important interventions from my right hon. Friend the Member for Warley (John Spellar) and the hon. Members for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), for Totnes (Anthony Mangnall), for Westmorland and Lonsdale (Tim Farron) and for Tiverton and Honiton (Richard Foord).

Ministers know that there are real concerns about the Australia deal and the precedent that it sets for future deals, and that here have been real concerns across the House about the parliamentary scrutiny of all trade deals, particularly the Australia deal. The behaviour of the previous Secretary of State, the right hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), has only underlined those concerns. Many have noted the huge giveaway of access for Australian farmers and how little we have secured in return in the same space. That is the fault not of the Australian negotiators but of the Government’s own wilful determination to get a deal by an arbitrary deadline, whatever the price.

The House will inevitably return to the issue of procurement. We will certainly encourage those in the other place to explore the concerns that I in particular have articulated in the debate—particularly as negotiations on CPTPP accession are moving forward. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 2

Assessment of impact on farmers

“At least three months, but not later than six months, after the coming into force of the government procurement Chapter of—

(1) the UK-Australia FTA, and

(2) the UK-New Zealand FTA,

a Minister of the Crown must lay before Parliament an assessment of the impact of the Chapter on farmers in—

(a) each region of England

(b) Scotland

(c) Wales, and

(d) Northern Ireland.”—(Gareth Thomas.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Nigel Huddleston]

I beg to move, That the Bill be now read the Third time.

Our deals with Australia and New Zealand are the first trade agreements in almost 50 years that the UK has negotiated from scratch. Members from across the House have rightly been eager to engage with the Bill, and I thank them all for continuing to do so. I also thank Members who sat on the Public Bill Committee for their work in scrutinising the Bill, and in particular my right hon. Friend the Member for The Wrekin (Mark Pritchard) and the hon. Member for Halton (Derek Twigg) for their expertise in chairing the Committee.

Members have rightly shown a great interest in the Bill, and I would like to use this opportunity to give the House further assurances. First, Members expressed concerns about the opportunities that the devolved Administrations have had to shape the Bill. I can assure the House that our procurement teams have consistently held roundtables with their counterparts from the devolved Administrations. During negotiations with Australia and New Zealand, they discussed the text of procurement chapters. Discussions on the Bill, and the changes in procurement regulations that it creates, have regularly taken place. Indeed, during negotiations, ministerial and official level engagement on these free trade agreements totals hundreds of hours. That includes 25 meetings with the Australia FTA chief negotiator, specific discussions at the ministerial forum for trade, and senior official conversations on policy content. My officials continue to work closely with their counterparts at the devolved Administrations to address the concerns raised regarding the powers in the Bill. I myself have also had constructive conversations with Ministers from the devolved Administrations. The Government remain committed not to using the concurrent power in the Bill without first consulting the devolved Administrations. I want to stress to the House that the powers are the most logical and efficient way of making minor, technical changes to our procurement regulations.

On Report, we discussed how the Government are committed to providing, for each agreement, a monitoring report every two years, and an evaluation within five years of entry into force. The reports will assess the entirety of the agreements and not limit themselves to the procurement chapters alone.

I would like to say a couple more thank yous: first, to the Bill team at the Department for International Trade—James Copeland, Donald Selmani, Jack Collins, Alex Garcia-Pineiro and Catherine Ajani—as well as the other officials who make up my fantastic team. I would like to thank the parliamentarians who have taken part in this and other debates on the legislation, and of course the International Trade Select Committee, as well as the wonderful staff here in the House.

I also want to thank the Opposition spokespeople for the constructive way in which they have approached scrutiny of the Bill. It was remiss of me earlier not to welcome the new SNP spokesperson, the hon. Member for Gordon (Richard Thomson) to his role, and I do so now. I also thank his predecessor, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). Who knows, but perhaps under the new leadership we may actually get the SNP to vote in favour of a trade deal. [Interruption.] Indeed, I suspected that may be the case.

[Drew Hendry]

Will the Minister also extend the hope that the Government may accept one of the SNP amendments one of these days?

[Nigel Huddleston]

The key thing is that we estimate that these deals will considerably boost the UK economy and all nations. Businesses in every single constituency will be able to grasp new opportunities from this Bill. It will therefore benefit the whole of the country, and I hope that just perhaps it will get the support of the whole House. I am delighted to commend this Bill to the House.

Trade (Australia and New Zealand) Bill

Nigel Huddleston Excerpts

Consideration of Lords amendments
Wednesday 22nd March 2023 Commons Chamber

[The Minister of State, Department for Business and Trade (Nigel Huddleston)]

I beg to move, That this House agrees with Lords amendment 1.

This Government amendment, tabled in the other place and agreed to, rectifies a minor and technical typographical error in the Bill, and clarifies the power available to Ministers of the Crown or a devolved authority under clause 1. The amendment inserts a single word, “different”, in clause 2(1)(a), making it clear that regulations under clause 1 may make different

“provision for different purposes or areas”.

The intention of the provision overall is to make clear that if it were wanted, the Government procurement chapters could be implemented differently for different types of procurement or in different sectors. The Government do not anticipate relying on this flexibility for the initial set of regulations implementing the procurement chapters, because the chapters will be implemented in the same way for the procurement subject to those chapters. None the less, it is important to retain the flexibility should the need arise in the future—for instance, if it were necessary or expedient for regulations to make provision implementing an amendment to the chapters in one way for utilities and a different way for local government.

The flexibility is also reflected in regulations that may be made to implement trade agreements within the scope of the Trade Act 2021. Section 4(1) of that Act similarly provides that regulations

“may…make different provision for different purposes or areas”.

However, I assure the House that any regulations made under the Bill can be made only for the purposes described in clause 1, namely implementing the Government procurement chapters and/or dealing with matters arising out of or related to those chapters.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Last week the Office for Budget Responsibility published figures on trade which changed the context for this debate on what is an apparently innocuous amendment from the other place. According to the OBR, we now face two years of declining exports, with a huge 6.6% drop in British exports this year, a further drop next year, and then an average growth in our exports of less than 1% for the next three years. We are reaping the results of the Conservatives’ failure to negotiate a better trade deal with the European Union or complete a trade deal with the United States, and the impact of significant cuts in support for attendance at trade shows and access to overseas markets is now all too obvious.

This amendment, and the debates in the Lords, strike me as a big missed opportunity—not for want of trying by Opposition colleagues—to start attempting to put things right. Abolishing the Department for International Trade and moving the deckchairs around in Whitehall is not going to hide away the Conservatives’ dismal record on trade and economic growth. We are lagging behind the rest of the G7 on exports to the world’s fastest growing economies in the G20, and nothing that the Minister has said so far, this afternoon or in previous debates, is going to improve the situation any time soon.

I do not want to detain the House too long, but while the amendment might involve the insertion of only one word in the Bill, the difference it makes does matter, both for what it does and what it does not do. Although there is support across the House to increase trade with our friends in Australia and New Zealand—particularly on the Labour Benches, not least because both countries are now led by progressive Labour Governments—there has also been widespread concern, among hon. Members and certainly outside the House, about what Ministers have negotiated, particularly in the trade deal with Australia. As I say, this amendment feels like a missed opportunity to begin to address those concerns.

We know that Ministers decided to throw British farmers under the bus, ignoring the concerns of the National Farmers Union. We know that the Prime Minister could have intervened, but did not. And we know that the desperation to get any deal meant that too much negotiating leverage was given up. One of the questions that the amendment raises is whether its wording in any way helps to offset, even just a little, those significant negotiating failures by the Government. We on the Labour Benches warned Ministers that the Australian deal would be used as a precedent by the other countries with which Ministers are negotiating, and as the Minister knows, that is exactly what is happening. The weaknesses in the deal that his predecessors negotiated are now being used to demand further concessions in our current negotiations, particularly by the countries with big agricultural interests.

I have considered carefully whether this amendment helps us to find any comfort following the devastating analysis of these trade deals offered to the House by the right hon. Member for Camborne and Redruth (George Eustice), when he explained, back in November, that we

“gave away far too much for far too little in return”.—[Official Report, 14 November 2022; Vol. 722, c. 424.]

He also said that

“the value of the UK agri-food market access offer was nearly double what we got in return”.

I have also considered carefully whether this amendment from the other place improved the scrutiny by Parliament, or even the scrutiny of how the regulations bringing into effect the procurement chapters of these trade deals are implemented. If the amendment had forced Ministers to consult with and in the nations and regions of the UK before the regulations were introduced, it would have been extremely helpful. After all, surely one of the most important lessons from these two trade deals is that the process of parliamentary scrutiny for trade deals is not fit for purpose.

Granted, Ministers in the Department for International Trade were busy disagreeing and attacking each other at the time, but when the then Trade Secretary failed to turn up eight times to give evidence before the International Trade Committee on these deals—and despite that, would not extend the time for the Committee to report on the deals to the House—it became clear that something was very amiss with the system of scrutiny. It is hardly surprising that the International Trade Committee has been abolished by Ministers, but instead of improving the scrutiny of trade negotiations, or even just the regulations implementing the procurement chapters of the negotiations, the amendment makes things a little easier for Ministers.

--- Later in debate ---

[Richard Thomson (Gordon) (SNP)]

Out of all the potential amendments that could have come back along the corridor from the other place, this is not one that would have been top of my list. Let me surprise the Minister by saying that this is a very good trade deal—for those viewing it from Australia or New Zealand. It is not such a good trade deal—it is a pretty lousy one—for those viewing it from Scotland. We are dealing with a single-word amendment, and I can think of many farmers in my constituency who could probably sum up their views of this deal in a single word—none of their words would be parliamentary, I hasten to add.

I hear what the hon. Member for Totnes (Anthony Mangnall) has to say about this not being a static arrangement, but even then it still requires a great deal of catching up in order to make up the ground here. The UK Government’s own analysis shows that the trade deal with New Zealand will bring in an increase of 0.03% of GDP over 15 years, with a figure of 0.08% of GDP from the Australia deal, all while the UK trade and co-operation agreement with the EU leads to a 4.9% fall for the UK over the same period.

The Scottish National party has a simple yardstick on trade deals: we will support those that are good and oppose those that are poor. Nothing that has come back alters our view of this particular deal.

[Nigel Huddleston]

I shall be brief. I thank Members for their contributions today. We have had two glass half empty responses and one glass half full one. That does not surprise me at all, because I am still waiting for the Opposition to support one of our trade deals. It is important to remember that the Australia and New Zealand deals benefit every nation and every region of the UK. I am disappointed to hear what the hon. Member for Gordon (Richard Thomson) said, because the attitude of the Scottish whisky manufacturers might be slightly different, as huge benefits will likely come from these deals.

As I said in my opening speech, this Lords amendment is a minor and technical one. It ensures clarity on the point that the power in the Bill can be used only to implement and deal with cases arising as a result of these free trade agreements. Again, the Government do not—

[Gareth Thomas]

I realise that the Minister probably does not have much more to say, but may I take this opportunity to press him to set out the plan to help small businesses benefit from the trade preferences in these deals?

[Nigel Huddleston]

The hon. Member is being slightly too impatient. I said that my speech would be short, but it is not too short. There are a couple of comments that I will come on to.

On the amendment, the Government do not anticipate relying on this flexibility for the initial set of regulations implementing the procurement chapters, but it is nevertheless important that the flexibility is retained should the need for it arise in the future.

I will respond to comments made by hon. Members. I have already mentioned the economic benefits of the Australia and New Zealand trade deals. They will generate billions of pounds of economic activity, to the benefit of UK businesses and, of course, the people we represent. This will lead to more jobs, which is why it is unfathomable that anybody would vote against this.

The scrutiny that we give Bills stacks up pretty well compared with other parliamentary democracies and, of course, is based on CRaG—the Constitutional Reform and Governance Act process—which I remind Opposition Members was developed and implemented during the time of the last Labour Government. If they do not like it, they are criticising their own legislation.

On protections to support the most sensitive parts of the UK farming community, we have secured various measures across both deals that are collectively available for 15 to 20 years for the most sensitive products. We have engaged, and continue to engage, with the farming industry. Of course, these and the many other deals we are negotiating are also ensuring that we are fit for the 21st century. We are no longer in a world where all we do is ship widgets from country A to country B via the countries closest to us. Services, particularly those delivered digitally, are now vital to the UK economy. They represent 80% of the UK economy and it is absolutely vital that they form a key part of our trade deals, as is the case with these two deals with Australia and New Zealand.

On support for businesses, of course, as the Secretary of State has said many times, we need to not only deliver on the deals but make sure that businesses, large and small, right across the country are able to benefit from them, so we will continue to support small and medium-sized businesses. My hon. Friend the Member for Totnes (Anthony Mangnall) highlighted this morning’s export showcase event, at which MPs and Lords were surprised at the extent to which support is already, and will continue to be, available, whether in training, export support services or UK export finance. That is not just for big businesses; it is for small and medium-sized businesses as well. There will be extensive support because we want all businesses, large and small, to benefit from these deals.

The Bill’s measures might be technical in nature, but they will make a real difference for people right across our constituencies and right across the United Kingdom.

Lords amendment 1 agreed to.

UK Infrastructure Bank Bill [Lords] (Programme) (No. 3)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the UK Infrastructure Bank Bill [Lords] for the purpose of supplementing the Order of 1 November 2022 (UK Infrastructure Bank Bill [Lords]: Programme), as varied by the Order of 1 February 2023 (UK Infrastructure Bank Bill [Lords]: Programme (No. 2)):

Consideration of Lords Message

(1) Proceedings on the Lords Message shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.

Subsequent stages

(2) Any further Message from the Lords may be considered forthwith without any Question being put.

(3) The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Jacob Young.)

Question agreed to.