Trade Bill (Sixth sitting)

Stewart Hosie Excerpts

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

[The Chair]

Mr Hosie, I am just checking whether you wish to speak.

[Stewart Hosie (Dundee East) (SNP)]

No.

[Hon. Members]

Hear, hear.

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[Greg Hands]

I thank the hon. Gentleman for that intervention, but there is no way of knowing whether the UK-Japan agreement will be significantly different, because it is yet to be negotiated. We are trying to get an enhanced agreement with Japan, but that negotiation is under way. It is be impossible to speculate in what way, or to what degree, it will be different from the EU agreement. We are hoping for an enhanced FTA, and we believe there is further to go with Japan on that, so I do not think the hon. Gentleman’s request would be appropriate.

[Stewart Hosie]

Taking what the Minister has said at face value, it is true that reports have been published, but the affirmative resolution process that he spoke about is effectively a “take it or leave it” option. There is no ability for Members to amend what the Government have proposed. If the Government were to use clause 2(6)(a) to modify retained legislation, we would be given no more than the opportunity to take or leave something that may look considerably different from the pre-existing arrangement we had through the European Union.

[Greg Hands]

I thank the hon. Gentleman for that intervention, and I plan to come to constraints on that power shortly. He rightly said that on the face of it, the power is broad, but there are significant constraints on its use. We must not forget that the continuity agreements are already in effect, and have already been scrutinised through previous processes in both the Commons and the Lords.

I draw the Committee’s attention to our track record. Of the 20 signed continuity agreements passed through CRAG, their lordships have recommended six for the attention of Parliament, most recently the UK-Morocco association agreement on 9 March 2020. As I have said, not a single one of those debates carried a motion of regret. Due to the limited scope of the continuity agreements for which we intend to use the clause 2 power and the existing opportunities for parliamentary scrutiny, the scrutiny procedure set out by the Opposition in new clause 5, to which I will turn in due course, would be disproportionate and unnecessary. That consequently means that amendment 4 is unnecessary.

I will now turn to amendment 5, which would seek to bring new FTAs within the scope of the Bill. The Government are only seeking a power in this Bill to ensure the continuity of trading relations with our existing partners, with whom we previously traded as a member of the EU. The Bill is not, and never was in its previous form, a vehicle to implement agreements with partners, such as the USA, that did not have a trade agreement with the EU before 31 January 2020.

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[Greg Hands]

I was being very generous in saying that my door was open, but it is not open to discuss the content of the current negotiations with the US. That, of course, is a matter—in the proper way—for statements to Parliament, but that is a live negotiation, so what may or may not be in that negotiation is probably a matter for that negotiation.

We laid out our negotiation objectives, in a document that I commend to the hon. Gentleman, on 2 March. It lays out our objectives in the talks, which are live at the moment, so it would be inappropriate for me to go down that road. However, my door remains open to having further discussions with all the Opposition parties about the scrutiny of future free trade agreements.

[Stewart Hosie]

I think the Minister is inadvertently getting to the nub of the concerns of many people both in Parliament and outside. It is all very well him saying, “We have published this, and we have made these statements to Parliament”, but does he not recognise that simply publishing what are no more than heads of terms for negotiations, and then updates that say “Everything’s going swimmingly”, really does not cut the mustard?

[Greg Hands]

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

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[Gareth Thomas]

I do not intend to press the matter to a vote, in the interests of time. I am not convinced by the Government’s argument, and we may return to the matter at Report stage. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Stewart Hosie]

I beg to move amendment 8, in clause 2, page 2, line 33, at end insert—

“(6A) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 6 of Schedule 1), unless the Scottish Ministers consent.

(6B) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 7 of Schedule 1), unless the Welsh Ministers consent.

(6C) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of a Northern Ireland department (within the meaning given in paragraph 8 of Schedule 1), unless a Northern Ireland devolved authority (within the meaning of paragraph 9 of Schedule 1) gives consent.”

This amendment would ensure that the consent of a devolved government is required for regulations under section 2(1) if those regulations contain matters which are within the remit of the devolved government.

[The Chair]

With this it will be convenient to discuss the following:

New clause 16—Role of Joint Ministerial Committee—

“(1) The Joint Ministerial Committee is to be a forum—

(a) for discussing—

(i) the terms upon which the United Kingdom is to commence negotiations with respect to any international trade agreement;

(ii) proposals to amend retained EU law for the purposes of regulations made under section 1 or section 2;

(b) for seeking a consensus on the matters set out in subsection (1)(a) between Her Majesty’s Government and the other members of the Joint Ministerial Committee.

(2) Before Her Majesty’s Government concludes an international trade agreement, the Secretary of State must produce a document for consideration by the Joint Ministerial Committee setting out—

(a) Her Majesty’s Government’s objectives and strategy in negotiating and concluding an international trade agreement;

(b) the steps Her Majesty’s Government intends to take to keep the Joint Ministerial Committee informed of progress in reaching an international trade agreement;

(c) the steps Her Majesty’s Government intends to take to consult each member of the Joint Ministerial Committee before entering into an international trade agreement and for taking the views of each member into account.

(3) Before concluding an international trade agreement the Secretary of State must produce a document setting out the terms of the proposed agreement for consideration by the Joint Ministerial Committee.

(4) In this section, ‘the Joint Ministerial Committee’ means the body set up in accordance with Supplementary Agreement A of the Memorandum of Understanding on Devolution, between Her Majesty’s Government, the Scottish Government, the Welsh Government and the Northern Ireland Executive Committee.”

[Stewart Hosie]

Although it was not my intention to press any of our amendments or new clauses to a vote, such has been the public support for new clause 12 on the NHS that it is my intention, if and when we reach that stage of the debate—perhaps on Thursday afternoon —to divide the Committee. I am sorry to leave it so late to advise the Committee of that, but this is the first opportunity I have had to do so.

Amendment 8 relates to the powers of the devolved Administrations, or, more accurately, the ability of the UK Government to make regulations under subsection (1), which makes provisions within devolved competencies, without the consent of Scottish or Welsh Ministers or a Northern Irish devolved authority. It certainly strikes us as fundamental that, if we are to respect the devolved settlement in the UK, Ministers must gain the consent of the devolved Administrations before making changes to regulations that directly affect them, possibly negatively or in a way that runs counter to their policy objectives.

I am aware that the previous Trade Bill from 2017 to 2019 made provision for regulation-making powers to be available to the UK Government and the devolved Administrations within areas of devolved competence. That version of the Trade Bill contained a provision that prohibited devolved Administrations from using powers to modify retained direct EU legislation or any EU law retained by virtue of section 4 of the European Union (Withdrawal) Act 2018 in ways that would be inconsistent with any UK Government modifications to retained direct legislation or EU law, even in devolved areas. As a result, the Scottish Government could not recommend giving consent to the previous Bill, and the Scottish Parliament’s Finance and Constitution Committee supported that position.

That Trade Bill did not complete its passage through the House, as Parliament was dissolved and the Bill therefore fell. The good news is that those provisions have been removed entirely from the reintroduced Trade Bill. However, there remains no statutory obligation for the UK Government even to consult, let alone to seek the consent of, Scottish Ministers before exercising the powers in the Bill in devolved areas.

During the partial proceedings on the previous Trade Bill, the UK Government made a commitment to avoid using the powers in devolved areas without consulting, and ideally obtaining the consent of, Scottish Ministers. The then Minister of State for Trade Policy at the Department of International Trade, the right hon. Member for Bournemouth West (Conor Burns), restated that commitment in a letter to Ivan McKee, the Scottish Government Minister, on 18 March, the day before this Bill was introduced. I asked on Second Reading whether those non-legislative commitments still stood, and I would be grateful if the Minister could confirm that today.

I know that the Minister is aware of those commitments, but I suspect that many other Committee members may not be. The non-legislative commitments I refer to are as follows. The first is that UK Government Ministers will not normally use the powers conferred by the Bill in devolved areas without Scottish and other devolved Ministers’ consent, and that they will never do so without consulting them. The second is that the UK Government will consult the Scottish Government and other devolved Administrations before extending the sunset for the power in clause 2—that is, before extending the period during which clause 2 powers can be used under the Bill.

The third is that in relation to the Trade Remedies Authority—the TRA—the Secretary of State will notify the devolved Administrations of decisions to initiate a trade investigation that will have a particular impact on the devolved nation. The fourth is that the Secretary of State will notify the devolved Administrations of the TRA’s recommendations to the Secretary of State at the same time as consulting other Government Departments, so that they can feed in their views. The fifth is that the devolved Administrations can proactively submit to the TRA any information that they consider relevant to an investigation. The final commitment is that the Secretary of State will seek the devolved Administrations’ suggestions on the optimal way of recruiting TRA non-executive members with regional knowledge, skills and experience.

I hope the Minister can confirm that those non-legislative commitments still stand. That would be particularly helpful. That would not remove the obvious need for an amendment of this kind, to ensure that devolved Governments have an input in statute to changes that directly affect them, and that, at the very least, consent is sought and received before such changes are proceeded with.

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[Greg Hands]

I welcome the opportunity to discuss the important issues raised in the amendments, which I think are fundamentally on different topics from those that we have dealt with for much of today. There is significant common ground between the Government and the Opposition parties. I welcome the hon. Member for Dundee East to the debate, for his first contribution today. It was noticeable that he chose not to take part in the chaos that ensued earlier when the main Opposition party’s Front Benchers struggled with whether they are for or against the Canada agreement and so on. He wisely decided to sit that one out.

Under the UK constitution, the negotiation of international trade agreements is, as I have already made clear, a prerogative power of the UK Government. It is also a reserved matter, where the UK Government act on behalf of the whole UK. When exercising that reserved power, the Government have made clear that they will deliver trade agreements that benefit all parts of the UK—I have already referred to the scoping assessment for the US deal, showing that Scotland would be the nation or region of the UK that benefited most—unleashing the potential of businesses from all four countries of the United Kingdom.

I recognise the important role that the devolved Administrations can and should play in that endeavour, not only as representatives of their respective nations’ interest, but because we know our trade deals will interact with areas of devolved competence. As such, my Department has worked and will continue to work closely with the DAs on our trade policy.

Turning to new clause 16, I will explain why I think it is unnecessary and impractical, although the principle of engagement behind it is one that I share. The new clause seeks to create a statutory role for a joint committee of the UK Government and the devolved Administrations as a forum to discuss trade policy, but such an arrangement is already in place.

During the passage of the Trade Bill 2017-19, the previous Secretary of State for Trade, my right hon. Friend the Member for North Somerset (Dr Fox), committed to establishing a new bespoke ministerial forum for trade with the devolved Administrations, in recognition of the importance of this relationship. That forum had its inaugural meeting in January and meets regularly to discuss our approach to trade negotiations, including key areas such as our objectives for the US trade agreement.

I am also happy to put on record my commitment to continuing to work closely with the devolved Administrations at all stages of trade negotiations, not only through the ministerial forum for trade, but via bilateral ad hoc engagement to reflect the sometimes fast-paced nature of trade negotiations. Indeed, I spoke about the US free trade agreement with all my counterparts in the devolved Administrations last month and have also recently written about the Trade Bill and other trade policy issues.

My former ministerial colleague, my right hon. Friend the Member for Bournemouth East (Mr Ellwood) travelled to Belfast in February to meet colleagues in the Northern Ireland Executive to discuss trade policy. For the benefit of the hon. Member for Dundee East, I restate the commitments made by my right hon. Friend, when he was a Minister, in his March letter to the Scottish Minister Ivan McKee.

In short, we are already delivering the engagement envisaged by proposed new clause, and we have achieved that while continuing to observe the important constitutional principles enshrined in the devolution settlements. In contrast, this proposed new clause would give the devolved Administrations a statutory role in the reserved area of international trade negotiations, which would be constitutionally inappropriate.

Nor is this proposed new clause practical. It would lock us and the DAs into prescribed ways of working under the existing intergovernmental memorandum of understanding, a document last updated in 2013. It would constrain our ability to develop and adapt bespoke engagement mechanisms as we embark on negotiating our first UK trade agreements for more than a generation.

Turning to amendment 8, the powers created by this legislation will be used for the purpose of transitioning trade agreements with those countries that the UK had agreements with through its membership of the EU. That will ensure certainty, continuity and stability in our trade and investment relationships for businesses, citizens and trading partners in all parts of the UK.

As parts of these agreements touch on devolved matters, this legislation will create concurrent powers. We have sought to put in place concurrent powers to provide greater flexibility in how transitional agreements are implemented, allowing each devolved Administration to implement the agreements independently in some cases, while also allowing the UK Government to legislate on a UK-wide basis where it makes practical sense to do so. This approach permits greater administrative efficiency, reducing the volume of legislation brought through the UK Parliament and through the devolved legislatures.

I recognise that the devolved Administrations and members of this Committee seek reassurance that those powers will be used appropriately. The Government have already made clear that we will not normally use them to legislate within devolved areas without the consent of the relevant devolved Administration or Administrations, and never without consulting them first. I am, of course, happy to restate that commitment here.

It is not appropriate, however, to put that commitment on a statutory footing, as, like new clause 16, it would give the devolved Administrations a statutory role in the reserved area of international trade, undermining the important constitutional principles enshrined in the devolution settlements. We recognise that the technical implementation of international obligations in devolved areas is a devolved matter. However, as I have explained, the decision on which international obligations the UK enters into is a reserved matter and a prerogative power exercisable only by the UK Government. This rightly ensures that the UK Government can speak with a single voice under international law, providing certainty for our negotiating partners and the strongest possible negotiating position for the whole of the UK, for the benefit of all of the UK.

A statutory consent provision in the Bill would in effect give the devolved Administrations a veto over a reserved matter. This would be highly constitutionally inappropriate and could lead to a situation where international agreements applied in some parts of the UK but not others. This would be a fundamental weakening of our Union and the long-established principle that in the matter of international relations the UK Government negotiate for all parts of the UK.

Additionally, placing the commitment on a statutory footing could open us up to convoluted and lengthy procedures in which the courts were asked to determine in minute detail what was reserved and what was devolved. This is disproportionate and would create significant uncertainty for UK businesses, undermining the fundamental purpose of the Bill, which is to maximise certainty and continuity of trading arrangements. Our commitment to not normally legislate in areas of devolved competence without consent, and never without consultation, strikes the proper balance between providing sufficient reassurance to the devolved Administrations while preserving international relations as a reserved matter. It is a sincere commitment that we will honour, as we have honoured the commitments made to the devolved Administrations on the Trade Bill 2017-19.

For example, we committed to seeking suggestions from the devolved Administrations on the optimal way of recruiting non-executive members for the Trade Remedies Authority, which we will discuss on Thursday, with regional knowledge, skills and experience, and we fulfilled that earlier this year.

Our new independent trade policy absolutely calls for engagement with the devolved Administrations and respect for the important role that they can and should play, but it does not call for fundamental shifts in the nature of devolution or the weakening of powers that Parliament agreed should remain reserved to the UK Government. We have worked collaboratively with all the DAs to ensure that the Bill enables us to transition arrangements in a way that delivers for the whole UK. Our existing commitments, which I have restated today, provide sufficient reassurance to the devolved Administrations on the issues covered by the amendments. This is demonstrated by the fact that the Welsh Government have recommended consent to the relevant clauses of the Bill.

I hope I have been able to satisfy hon. Members that we have recognised and met their objectives in this amendment and that the hon. Member for Dundee East will withdraw it.

[Stewart Hosie]

I thank the Minister for reconfirming the non-legislative commitments made by his predecessor in his letter to Ivan McKee. That has genuinely helped. However, the Minister falls back on the argument that bespoke powers are better than a permanent credible structure. I disagree. I think a permanent credible structure provides more stability and certainty than the bespoke ad hoc use of powers and discussions from time to time. However, in the current devolved process, I recognise that international treaties are reserved matters. I absolutely understand and respect that, but he knows as well as anyone who might be listening that the interface of the intersection between an international trade treaty and a devolved competence might be fairly high. That is all the more reason for structured statutory formal engagement rather than an ad hoc bespoke process, which may or may not satisfy one or more parties, or one or more of the nations, in the UK about the Government’s actions over a given international trade agreement.

Although I do not intend to press the matter to a vote, and I thank the Minister sincerely for the commitments he has restated, there is a fundamental difference of opinion on the bespoke ad hoc approach being suggested and a formal statutory structure, and I am sure we will return to that theme on Report. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned.— (Maria Caulfield.)