Oral Answers to Questions
Nigel Huddleston Excerpts(1 year, 7 months ago)
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Sir Desmond Swayne (New Forest West) (Con)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
The Department for International Trade is absolutely committed to increasing trade opportunities for the UK financial services sector. Through our network of in-market sector specialists located in Europe, India, Singapore and beyond, the Department is identifying and removing market access barriers and supporting companies to export their services to the world. Working with organisations such as the City of London, the Investment Association and others, we are promoting the UK’s world-class financial services overseas. We are also championing financial services through our free trade agreements.
Sir Desmond Swayne
Has the Minister a programme of support for fintech and start-ups in that sector?
Nigel Huddleston
I thank my right hon. Friend for raising that sector, which is hugely important to the UK economy and a major export generator. Our export strategy, which we published last year, outlines the Government support available for British exporters, including the financial services sector. The strategy updates the Department’s support for services firms and helps to give businesses and financial tech innovators the flexibility and resilience to thrive and trade globally. As well as providing large amounts of online support and information, including webinars, the Department provides tailored support services—for example, through trade advisers—from which firms of all sizes can benefit.
Clive Efford (Eltham) (Lab)
If we are to increase trade opportunities for the financial services sector, does the Minister agree that we must deal with the prevalence of money laundering for Russian kleptocrats, which has earned London the nickname “Londongrad”? Does he believe that we need to ensure that we can tackle such illegal activity in the City?
Nigel Huddleston
The hon. Gentleman makes an important point and, of course, that is exactly what we are doing. The Government are very aware of the issues and, with the support of the whole House, have taken robust action on sanctions against Russia, and will continue to do so.
Charlotte Nichols (Warrington North) (Lab)
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
The UK-Australia free trade agreement is expected to unlock more than £10 billion pounds of additional bilateral trade. We are working at pace to implement it, so that businesses can benefit from it as soon as possible. The Trade (Australia and New Zealand) Bill is making its passage through Parliament. It passed Report and Third Reading on Monday, and was introduced into the House of Lords on 13 December. The Government and the devolved Administrations are working together to progress the required statutory instruments to implement the agreement. We expect the free trade agreement to come into force in spring 2023.
Gerald Jones
The UK-Australia trade deal has been beset by difficulties and major delays to its passage through this House, and even the previous Secretary of State, the right hon. Member for Camborne and Redruth (George Eustice), no longer has to put a “positive gloss” on what was agreed. I, too, have serious concerns about the impact of the deal on Welsh and UK farmers. Will the Minister explain the delay behind the scenes? What discussions have been had with business managers about the delays to the Bill’s passage through the House, and will he give us some clarity?
Nigel Huddleston
I would like to correct the hon. Gentleman. We are progressing at pace, and we are having conversations with the devolved Administrations—indeed, I had conversations with Ministers from Wales and Scotland recently. Overall, enthusiasm for the deals is considerable right across the UK. Let us not forget that they will boost the economy, to the tune of £2.3 billion for the Australia deal and more than £800 million for the New Zealand deal. That will bring huge benefits right across the country, and all nations of the UK will benefit from a 53% and 59% boost to bilateral trade through the Australia and New Zealand deals respectively. We all want to move at pace, and we are having constructive conversations with the devolved Administrations.
Gareth Thomas (Harrow West) (Lab/Co-op)
The UK- Australia free trade agreement is, so the House has been told, a stepping stone to accession to the comprehensive and progressive agreement for trans-Pacific partnership. As we saw on Monday, it is not clear that Ministers have learned the lessons from the rushed negotiations on the Australia deal, and there is real concern that the existing rules of the CPTPP will be largely forced on Britain. I am sure the Minister will not want Britain to be a rule taker, so can he assure us that we will not be subject to any new secret courts through the investor-state dispute settlement?
Nigel Huddleston
The hon. Gentleman will be aware that discussions with the CPTPP are ongoing, and we are confident that we will strike a mutually beneficial and extremely good deal. I advise him to watch this space.
Liz Twist (Blaydon) (Lab)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
The UK trade remedies framework has been established to ensure that the Trade Remedies Authority has full independence when investigating unfair trading practices. As is the case with aluminium extrusions, the TRA provides thorough, objective and expert advice to Ministers based on evidence collected during the course of an investigation. The reasons for the TRA’s recommendation will be published alongside the ministerial decision to accept or reject the recommendation in its entirety.
Liz Twist
Over the past year I have been asking about the impact of the Trade Remedies Authority’s determination on this issue, and I now hear that the final determination is due to be published in days. There are real concerns that the proposed tariffs will do nothing to support our domestic aluminium extrusion producers, such as Hydro in my constituency, and producers in the constituencies of other MPs. What support will the Minister give to our domestic aluminium extrusion producers, should their fears about the dumping of aluminium extrusion prove correct? Will he meet me to discuss the situation?
Nigel Huddleston
The hon. Lady is correct. She will be aware that the recommendations are due to be published soon; she will understand that I cannot pre-empt today the conclusions of the investigation. As I have said, the TRA is independent and it reviews evidence very carefully indeed. On the hon. Lady’s other question, I would be delighted to meet her to discuss the matter further.
Gareth Bacon (Orpington) (Con)
Wayne David (Caerphilly) (Lab)
Will the Government accept that if the anti-dumping duties placed on Chinese imported aluminium extrusions are too low, the result could be the loss of thousands upon thousands of British jobs?
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
As I said a few moments ago, a report will be coming out very soon, and we will be able to comment further at that point. We have had many representations, and the Trade Remedies Authority has worked very carefully on these issues.
Martin Vickers (Cleethorpes) (Con)
Trade (Australia and New Zealand) Bill
Nigel Huddleston ExcerptsMonday 12th December 2022
(1 year, 7 months ago)
Commons ChamberRead Full debate Trade (Australia and New Zealand) Act 2023 View all Trade (Australia and New Zealand) Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 12 December 2022 - (12 Dec 2022)
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.
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.
Draft Extraterritorial US Legislation (Sanctions against Cuba, Iran and Libya) (Protection of Trading Interests) (Amendment) (EU Exit) Regulations 2022
Nigel Huddleston Excerpts(1 year, 7 months ago)
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The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
I beg to move,
That the Committee has considered the draft Extraterritorial US Legislation (Sanctions against Cuba, Iran and Libya) (Protection of Trading Interests) (Amendment) (EU Exit) Regulations 2022.
It is a pleasure, again—second week running on a Thursday—to serve under your chairmanship, Mrs Harris. This instrument amends the Extraterritorial US Legislation (Sanctions against Cuba, Iran and Libya) (Protection of Trading Interests) Order 1996—the 1996 order. It aims to correct a minor and technical deficiency arising from the UK’s withdrawal from the European Union. Specifically, it updates a single cross-reference to section 30(3) of the Small Business, Enterprise and Employment Act 2015 so that it matches an update made to the provision that was itself made during the withdrawal process. That is all the instrument does. It makes a minor and technical amendment, and does not alter policy.
The 1996 order is part of the legislation that sets out the United Kingdom’s protection of trading interests regime, which also includes the Protection of Trading Interests Act 1980 and the retained version of Council Regulation (EC) No. 2271/96, the EU version of which is also known as the blocking regulation, or the countermeasures regulation. Together, those concern a matter of vital interest to the United Kingdom as an international trading nation. They seek to protect against and counteract the effects of so-called extraterritorial domestic legislation made by other countries—that is, legislation that seeks to enforce those countries’ economic and commercial policies beyond the normal bounds of national jurisdiction as recognised in international law.
For example, most countries impose sanctions on persons that rely on either a territorial or a nationality-based jurisdiction, nexus or connection. To be clear, when I say “persons”, that can mean an individual or a corporation. However, certain countries claim extraterritorial jurisdiction to apply sanctions beyond their borders to all persons, regardless of their connection to the issuing country, and such measures can be unilaterally deployed by third countries to coerce UK operators to withdraw from activities that are otherwise lawful in the UK—in effect, imposing domestic law overseas. Such measures currently include US sanctions against Iran and Cuba. Despite the title of the 1996 order, the instrument does not currently concern US sanctions against Libya. When the 1996 order was originally drafted, one of the proscribed sanctions laws for the purposes of the blocking regulation was the United States’ Iran and Libya Sanctions Act of 1996, but that was removed from the list of proscribed US legislation in the blocking regulation by an amendment in 2018.
In practice, the issue of extraterritorial sanctions legislation arises primarily in relation to the US, although it is right that we take similar action against other countries as the necessity arises. By way of a more concrete example, consider a UK company with no connection to the US that imports something—say, cigars—to the UK from Cuba. It might find itself denied insurance for those imports by a UK bank on the grounds that providing such insurance could breach US sanction laws. The protection of trading interests legislation provides that it would be unlawful for a bank to refuse insurance on that basis. That protects the importer’s trading interests and those of the UK more broadly.
The function of the retained blocking regulation and the 1996 order is, then, to protect UK entities from being forced to comply with such extraterritorial laws. The retained blocking regulation also allows UK entities to recover damages arising from the application of sanctions imposed by another country. The 1996 order initially provided the mechanism for implementing the EU blocking regulation in domestic law by setting out the offences and penalties relating to that regulation, and it has continued to provide the same function in relation to the retained blocking regulation.
Article 4 of the 1996 order sets out various requirements for carrying out a five-yearly review of the regulatory provisions contained in the order. In particular, article 4(4) cross-references and paraphrases section 30(3) of the Small Business, Enterprise and Employment Act 2015, and that cross-reference specifies that a review carried out under article 4 must, so far as is reasonable, have regard to the rules on penalties applicable to infringement of the EC counter-measures regulation and the measures taken to implement it in other EU member states.
There are two deficiencies in the current drafting. First, the cross-reference to section 30(3) of the Small Business, Enterprise and Employment Act 2015 is out of date and does not reflect changes made to that section following the UK’s withdrawal from the EU. Secondly and similarly, following our withdrawal from the EU, the EC blocking regulation no longer applies to or in the UK. Therefore, the instrument seeks both to update the cross-reference to section 30(3) of the 2015 Act and to remove the obsolete reference to EU law and EU member states.
Instead, the replacement text provides for considering other applicable international obligations, in line with the current wording of section 30(3) of the 2015 Act. This will allow us to tailor our assessment to the UK’s relevant international obligations and properly reflect our departure from the EU.
The proposed amendment is a technical fix; it does not change the approach of His Majesty’s Government to the issue. Ultimately, the blocking regulation has a single and non-contentious objective to ensure that commercial decisions by UK persons are not subject to the extraterritorial laws of other countries that exceed the boundaries of the international law on jurisdiction. The instrument laid before this House ensures that the 1996 order, as amended, remains fit for purpose.
I beg to move that the Committee approve the instrument.
Nigel Huddleston
I thank the shadow Minister for her comments and her support, and for her grasp—as always—of what are sometimes quite technical issues. I also thank the officials, for the engagement they have had with her and for drafting the legislation.
As I stated, the purpose of the legislation we are considering today is to make an amendment that is a technical fix. The instrument does not change the Government’s approach to the issue, nor does it change the Government’s approach on other diplomatic and trade issues. It simply updates the 1996 order to reflect the fact that the United Kingdom has left the European Union so nothing in this regulation represents a change for British businesses.
I thank all hon. Members and everybody else who has attended today for the swift progress that we have made.
Question put and agreed to.
Draft Export Control (Amendment) (EU Exit) Regulations 2022
Nigel Huddleston Excerpts(1 year, 7 months ago)
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The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
I beg to move,
That the Committee has considered the draft Export Control (Amendment) (EU Exit) Regulations 2022.
It is a genuine pleasure to serve under your chairmanship, Ms Harris.
The aims of the draft statutory instrument are threefold: first, to make technical amendments to the Export Control Order 2008 to implement the European Union dual-use regulation, which applies in Northern Ireland by virtue of the Northern Ireland protocol; secondly, to correct an error introduced by an earlier instrument; and thirdly, to remove the Russian Federation as a permitted destination from the scope of certain general export authorisations.
Let me step back to provide some context. The draft instrument amends legislation relating to the United Kingdom’s export controls. This is a technically complex area of law, so I hope Members will bear with me as I provide some background. The export controls to which this instrument relates specifically are strategic exports, which include goods, software and technology capable of having a military use. In particular, it relates to dual-use exports, which are capable of both civilian and military uses. The restrictions that apply to strategic goods, software and technology are known as controls, and can take different forms. For example, controls may relate to dual-use items or to end uses relating to weapons of mass destruction. Controlled items may be licensed for export, but exporting controlled items without a licence constitutes an offence.
When the United Kingdom was a member of the European Union, it was subject to the EU law on export controls. The EU set out a number of controls relating to strategic exports, as well as extensive lists of goods, software and technology subject to control. As Members are aware, since the UK’s withdrawal from the EU, certain EU rules have continued to apply in Northern Ireland, in accordance with the terms of the Northern Ireland protocol. When the United Kingdom left the European Union in 2020, many of the detailed rules describing which strategic goods could be exported without a licence were set out in European law.
I will set out three distinct descriptions of relevant legislation and use them throughout the rest of my speech. First, the old EU dual-use regulation applied to the United Kingdom before our withdrawal from the EU; it continued to apply throughout the EU, and in Northern Ireland in accordance with the Northern Ireland protocol, until 9 September 2021. Secondly, the retained dual-use regulation is the version of the old EU dual-use regulation that was retained in UK law when we left the European Union; it applies in Great Britain. Thirdly, the new—I use the EU word—recast EU dual-use regulation came into force on 9 September 2021; the recast dual-use regulation replaced the old regulation in the EU and has applied automatically since 9 September 2021 in Northern Ireland, in accordance with the rules of the Northern Ireland protocol.
The recast dual-use regulation sets out the laws that govern the export of dual-use goods, software and technology from the EU and Northern Ireland. It includes new controls on cyber-surveillance items and technical assistance, and it provides for additional controls relating to EU member states’ national control lists. For regulatory purposes, the recast dual-use regulation is incomplete: it sets out controls on dual-use items but does not provide the necessary legislative detail on how to license exports of such items, the offences applicable for breaching controls, or the applicable customs enforcement powers. Such matters have been left to domestic implementation.
In this case, the regulation that we are seeking to ensure functions properly controls the export of dual-use goods, which are goods that have both military and civilian use. The draft statutory instrument therefore aims to make the necessary changes to the Export Control Order 2008 to ensure that the recast dual-use regulation is properly connected to the existing domestic-law provisions on licensing, offences and customs enforcement. To that extent, it provides for the technical implementation of the United Kingdom’s obligations under the Northern Ireland protocol, rather than representing any change in export control policy.
I should clarify that this statutory instrument is subject to the draft affirmative procedure, because it modifies criminal offences to make the new European Union controls on cyber-surveillance items, technical assistance and national control lists all operable in Northern Ireland. Paragraph 8F(1) of schedule 7 to the European Union (Withdrawal) Act 2018 specifies that instruments that make provisions falling within paragraph 8F(2) fall must be made using the draft affirmative procedure.
Let me explain what the regulations do, first with respect to the changes to the Export Control Order 2008 and then with respect to the changes to the retained dual-use regulation. First, on the 2008 order, regulation 3 updates and clarifies definitions relating to the recast dual-use regulation as it applies in Northern Ireland and the retained dual-use regulation as it applies in Great Britain.
Secondly, regulations 4 to 8 and 15 and 16 update various cross-references to refer to the recast dual-use regulation. For instance, references to article 20(1) of the old dual-use regulation have been updated to refer to the equivalent provision in article 27(1) of the recast dual-use regulation.
Thirdly, regulations 9, 13 and 17 modify the offences provisions in the 2008 order to cover the new controls in the recast dual-use regulation. That is, they make it an offence to contravene the prohibitions and restrictions in the recast dual-use regulation and specify applicable penalties. They also more clearly distinguish between the offences applicable in Northern Ireland and those applicable in England, Wales and Scotland. Specifically, regulation 9 limits the application of article 35 of the 2008 order to offences relating to the retained dual-use regulation as it applies in England, Wales and Scotland. Regulations 13 and 17 create new offences in Northern Ireland in respect of the new controls in the recast dual-use regulation.
Fourthly, regulation 10 both updates certain cross-references to the recast dual-use regulation and extends His Majesty’s Revenue and Customs’ customs powers in Northern Ireland in respect of the new controls.
Fifthly, regulation 12 updates a cross-reference to a European Council directive from 18 June 1991 on the control of the acquisition and possession of weapons, known as the EU firearms directive. This, too, was replaced by an updated directive on the same subject matter: directive (EU) 2021/555, which came into force on 26 April 2021. The new directive now also applies in Northern Ireland in accordance with the Northern Ireland protocol, and it is appropriate that we update the cross-reference accordingly.
Let me turn to the amendment the instrument makes to the retained dual-use regulation. First, regulation 19 corrects an error in an earlier instrument made during the withdrawal of the United Kingdom from the European Union. It reinstates the Secretary of State’s power to reduce, annul, suspend, modify or revoke brokering-services authorisations in the retained dual-use regulation.
Secondly, regulations 20 to 22 amend the retained dual-use regulation to remove the Russian Federation as a permitted destination in certain general export licences that apply to Great Britain.
Mark Eastwood (Dewsbury) (Con)
The Minister mentioned the Russian Federation. I fully support what we are doing with sanctions and to try to restrict exports into and imports from Russia; however, the Russian Federation seems to be very good at circumventing our rules or finding loopholes that allow imports into or exports out of this country. Will the Minister clarify how his Department will address that?
Nigel Huddleston
My hon. Friend is absolutely right, and I assure him that we are all over this. We have one of the most robust export control licensing regimes in the world, and we are playing very close attention, working with our international partners, to make sure that Russia is not able to exploit loopholes. We have rigorous conversations with our partners to ensure that is not the case. The very point of the amendment regulations before us is, as Members will recognise, to do everything we can and that is necessary to step in in the light of Russia’s invasion and annexation of Ukraine’s sovereign territory. I understand my hon. Friend’s great interest in this matter.
I hope Members will forgive me if I do not go into the detail of the remaining draft regulations, which make minor and technical amendments in consequence of those that I have just set out. I ask Members to support the draft regulations, which I commend to the Committee.
Nigel Huddleston
I thank the hon. Lady for her comments and her welcome. I very much look forward to working constructively with her and the Opposition team on many matters, the vast majority of which relating to the Department for International Trade and the whole remit are not party political. We share the same goals in terms of promoting trade and, as the hon. Lady mentioned, ensuring that where trade happens on sensitive items it happens appropriately. She will be aware of the measures that we have in place. We can be proud to have developed, under multiple Governments, one of the most robust control systems in the world.
Let me respond briefly to the items the hon. Lady raised. Let us be clear and honest about the error that was made: it was a simple error—in government we make human errors every now and again. It was identified by officials and this is the process for correcting it. There have been no consequences to that error since it occurred, so there has been no material impact. We are correcting it at the earliest opportunity.
On the scale of the items covered, according to our licensing data 11 Northern Ireland exporters were granted standard individual export licences for dual use in 2021. They were issued with 315 licences to export dual-use items from Northern Ireland, valued at £13 million. We hold licensing data on open licences, but that data does not include information about end users.
The hon. Lady asked about the impact assessment. The draft instrument implements existing policy; it has no impact on businesses, charities or voluntary bodies and there is no significant change. The EU regulation that it implements was the subject of an EU Commission impact assessment, which is available online. I assure the hon. Lady that we do not believe the differences between the old and the recast regulation will have a significant impact. I mentioned an error; I am afraid they happen every now and again, but I hope that she will accept the apology and the quick turnaround.
My hon. Friend the Member for Dewsbury raised a broader point about sanctions. I reassure him that our sanctions are there to fulfil a whole range of purposes. In the UK, those purposes include complying with UN and other international obligations, supporting foreign policy and national security objectives, and maintaining international peace and security. The UK implements a wide range of sanctions regimes through regulations made under the Sanctions and Anti-Money Laundering Act 2018, which provides the main legal basis for the UK to impose, update and lift sanctions. UK sanctions regulations made under that Act apply in the whole of the UK, including Northern Ireland.
Mark Eastwood
I thank the Minister for that answer. I have picked up on the disparity between sanctions and controls and restrictions in respect of Russia and Belarus. Will the Minister provide reassurance that they are consistent, and that the sanctions and any restrictions and export controls are applied equally in respect of the Russian Federation and Belarus?
Nigel Huddleston
I reassure my hon. Friend that we have extremely rigorous export controls. He raises issues and points that go beyond the remit of the regulations, but I am happy to follow up and have a conversation with him to discuss those matters. I am aware that he is extremely concerned about such issues, as indeed we all are, and I thank him for raising them, but the Chair will forgive me for taking that conversation offline.
Dame Nia Griffith
Will the Minister respond to my question about whether any discussions about this legislation were held with Northern Ireland officials or Northern Ireland representatives? I fully understand why there did not have to be such discussions, but we understand the sensitivity of the situation.
Nigel Huddleston
I assure the hon. Lady that we have regular discussions. The Under-Secretary of State for International Trade, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), who is responsible for export policy, has regular conversations with the devolved Administrations and we follow through with them on an ongoing basis, so discussions happen very frequently indeed. I am happy to write to the hon. Lady about that. I ask the Committee to support the regulations.
Question put and agreed to.
Oral Answers to Questions
Nigel Huddleston Excerpts(1 year, 8 months ago)
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Virginia Crosbie (Ynys Môn) (Con)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
The Government have put in place enhanced scrutiny arrangements for free trade agreements. We publish extensive information prior to negotiations, including our strategic objectives and an economic scoping assessment. During negotiations, we engage closely with Parliament, publishing updates and holding briefings for colleagues. I particularly look forward to working closely with the International Trade Committee, whose members bring considerable knowledge and insight. Signed deals, together with an impact assessment, are laid before Parliament at the earliest opportunity, allowing for extensive scrutiny over several months. The House will debate the Australia-New Zealand trade agreement soon.
Virginia Crosbie
I thank the Minister for his answer and I welcome him to his place. This week, I celebrated Back British Farming Day with Aled Jones, president of National Farmers Union Cymru. One of the best ways we can back our hard-working farmers, such as those in Ynys Môn, is by ensuring that once a trade deal is in force, there are people on the ground who know the market and can help get the most out of the agreements. Will the Minister update the House on the progress the UK Government have made in appointing agricultural counsellors and attachés?
Nigel Huddleston
I thank my hon. Friend, who is always a fantastic champion for her constituents and constituency, as evidenced by Anglesey Day, which was a fantastic event earlier this week here in Parliament. Also this week, my officials gathered over 20 small businesses from across north Wales and Ynys Môn to discuss how they can internationalise their businesses and take advantage of our free trade agenda. She is right: we do not just need to do the deals; we need to get the most out of them. We will get help there, too, because our eight new agri-food attachés will help unlock opportunities in growth markets. All have been recruited and will start work soon.
Dame Nia Griffith (Llanelli) (Lab)
Business organisations, trade unions, consumer groups and the trade Committees in both Houses have all called for greater and more timely parliamentary scrutiny of trade deals. In contrast to Parliaments elsewhere, such as the US Congress, which has scrutiny opportunities right from the initial negotiating mandate through to voting on ratification, this Government have done deals with no chance for this Parliament, and therefore the people we represent, to have a real say. With a new team in place, will the Minister now commit to meaningful parliamentary scrutiny of trade negotiations—not an afterthought—and bring back control to this Parliament?
Nigel Huddleston
I am afraid that I have to disagree with what the Opposition Front Bencher has laid out. The Constitutional Reform and Governance Act 2010—that date is significant, because it was introduced that April under the previous Labour Government—outlines the process, which is rigorous and stacks up well with other parliamentary democracies around the world, such as Australia, New Zealand and Canada, which have similar systems. For example, with the Australia and New Zealand agreements combined, we delivered an oral ministerial statement at the launch of each negotiation; 10 negotiating round updates; extensive information on the deals when we reached agreement in principle; 12 sessions with Select Committees, including private briefings; eight MP briefings on the FTA programme; the Trade and Agriculture Commission reports and section 42 reports well ahead of the CRaG deadline; six months of scrutiny time; and many other things. [Interruption.] I just wanted to make that point, Mr Speaker—
Mr Speaker
I am going to make an even bigger point: we are not reading out phone books as answers.
I call the Scottish National party spokesperson, Drew Hendry.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I welcome the Minister to his places—I think that is the right thing to say.
It is vital that, for a change, we get a chance to actually scrutinise proposed deals before they become real. India has no detailed plan, for example, to cut emissions, and 70% of its economy is powered by coal. Cabinet Office emails have shown that the former Trade Secretary and Prime Minister decided to
“drop both of the climate asks”
from the UK-Australia agreement to get it “over the line”, even though Australia has a history of coal pollution. Given that the current Prime Minister had to be shamed into attending COP27, does that mean that no legally binding demands will be made in the UK-India discussions?
Nigel Huddleston
Again, I disagree with that characterisation —respectfully, because I am looking forward to a constructive relationship with the Scottish National party, Opposition Members and the devolved Administrations on trade deals. Let us be very clear: we will not sign any deals that are not in the UK’s interests.
Drew Hendry
The Minister did not answer the question. The UK has rolled over 35 EU agreements and signed trade deals with Australia and New Zealand, yet they have included no realistically enforceable measure to plug the climate change gaps that we have pointed out in all of them from the start. The New Zealand text cannot be enforced and climate has been dropped altogether from the Australia deal. There are gleeful reports from India that there will be no more than warm words on climate change. Why is real action on the climate emergency ignored in every deal that this place brings forward?
Nigel Huddleston
The hon. Member mentions “every deal that this place brings forward”, and again, it would be nice if we actually got support from Opposition Members at some point. He will know that our friends, colleagues and trading partners in Australia, in particular, given the situation they face, are as concerned about climate challenges as we are.
Wendy Chamberlain (North East Fife) (LD)
Ian Levy (Blyth Valley) (Con)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
The Department is working tirelessly to remove the trade barriers that British businesses face across the world. In the last financial year alone, we have removed 192 barriers across 79 countries. The removal of just 45 of those barriers is estimated to be worth £5 billion to businesses over five years, but we want to do more. Targeting the 100 trade barriers on our most wanted list has the potential to deliver export opportunities worth £20 billion for businesses across the UK.
Ian Levy
I welcome the team to the Front Bench.
On Monday, my right hon. Friend the Secretary of State visited the port of Blyth to see for herself the offshore blade testing facility at the Catapult. As the only deep-water port in Northumberland, the port of Blyth is at the heart of international trade, but if we are to continue to trade competitively on a global scale, we must look at the bureaucracy surrounding export licences. Will the Minister meet me to look at how we can smooth the way to a more efficient trading platform and drive exports around the world?
Nigel Huddleston
My hon. Friend and I have talked about this before. I know that the Secretary of State very much enjoyed her visit earlier this week. My hon. Friend is absolutely right to highlight the great expertise in renewable energy and green technology sectors in the UK. We need to do more to export those fantastic skills. The Government take our export control responsibilities incredibly seriously, because there are some sensitive areas, but I am extremely mindful of the commercial pressures that businesses face and of the need to process export licences as swiftly and reasonably as possible. I would be happy to meet my hon. Friend to understand in more detail the specific issues that he is facing.
Patrick Grady (Glasgow North) (Ind)
Is it not the case that the Tories’ hard Brexit has actually increased trade barriers at a range of levels? Is the Minister aware of the challenges faced by touring musicians based in my constituency who are trying to take their merchandise to Europe? Although it is a massive area in which they can profit from their business, either it is not viable for them to sell, or they have to source the merchandise in the country in which they are touring, which means there is a loss to producers of such merchandise in the UK.
Nigel Huddleston
We do, of course, have an arrangement with the European Union now. I am familiar with the issues that the hon. Gentleman has raised as a result of my time at the Department for Digital, Culture, Media and Sport, but I know that Ministers at that Department and, indeed, the Department for Transport are engaging with individual countries and progress is being made on those issues, most recently with Spain and Greece. As well as benefiting from the overall agreements, we are trying to unlock barriers individually, sector by sector and country by country.
Kate Osamor (Edmonton) (Lab/Co-op)
David Simmonds (Ruislip, Northwood and Pinner) (Con)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
This is a very important deal. Earlier this year, we launched negotiations between the United Kingdom and Israel on an upgraded, innovation-focused free trade agreement with services at its heart. The first round of negotiations with Israel were completed in September. An upgraded FTA with Israel will cement our relationship with that rapidly growing economy, and take our trading relationship to the next level.
Jim Shannon (Strangford) (DUP)
As the Minister of State knows, the Northern Ireland protocol poses a massive trade barrier for Northern Irish farming and businesses. The farming industry in Northern Ireland is worth £1.3 billion, so what discussions have been undertaken with the Secretary of State for Northern Ireland on smooth and frictionless trade for Northern Ireland’s farmers?