Trade Bill

Stewart Hosie Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 17th July 2018 Commons Chamber

[Mr Djanogly]

Yes, the approach that has now been adopted is, I believe, a fair one, subject to some ironing out that might need to be done in the other place. Yes, it is a good deal for my hon. Friend’s constituents.

After no little discussion over the last few months, I think that the position is now very much improved. Let us keep in mind that a single FTA might have many SIs attached to it, so to have the report laid 10 sitting days in advance of the first SI, setting out all the changes in the proposed deal that will need to be considered, should be more transparent than just attaching a period for scrutiny to the SIs themselves. Furthermore, attaching the 10 sitting days’ time delay to the report will allow any comments that people wish to make to be made before the SI is laid, which is more effective from a review point of view.

I am concerned that these powers could be used multiple times on the same FTA—say, if different trading terms were agreed a couple of years after roll-over. I understand that this is not the Government’s intention and I believe that the effect of these Government amendments would be to prevent that, unless the proposed changes came within the scope of the initial report. However, if they did not come within the scope of the report, Ministers should be required to provide a further report. Clarification on this point, perhaps today from the Minister or in the other place, would be appropriate.

I note the insertion of a provision in new clause 13 saying that Ministers should not have to prepare a report on the proposed FTA in exceptional cases. Apparently the Constitutional Reform and Governance Act 2010 contains a similar provision. The Minister has assured me that this provision is unlikely ever to be used, and that if it was, a report would still need to be prepared and there would still be a need for an affirmative resolution. Again, I hope that the Minister will refer to this in his closing remarks.

A further issue is the need to confirm that the scrutiny provisions to be used on these FTAs will be those set out in this Trade Bill and not those in the European Union (Withdrawal) Act 2018. This is provided for in my new clause 6. From discussions with the Minister, I understand that he has been advised that all regulations relating to rolled over EU FTAs will necessarily need to be dealt with under the terms of this Bill, but again, clarification would be helpful.

Yesterday we debated the Taxation (Cross-border Trade) Bill, which itself contains its own powers to make orders. Although other colleagues have been focusing on that Bill, I remain concerned that the scrutiny system in today’s Bill ties in with that Bill. This is relevant because aspects of an FTA, which are customs related, will be dealt with by yesterday’s taxation Bill rather than by today’s Bill. The regulation provisions may therefore need to work in sync.

All hon. Members from both sides of the House have been involved in this, and I thank those who have supported my amendments. The outcome has not been a victory for any Brexit faction; it has been Parliament that has won this debate in upholding its right to review the actions of the Executive. Having said that, I would point out that more than 40 Government amendments were received within the last week. As welcome as they were, and while the principle of them is agreed, the details deserve a review by the other place. I have mentioned the interconnectivity between this Bill and the taxation Bill, and these would be good topics for further review.

[Stewart Hosie (Dundee East) (SNP)]

I should like to speak to new clause 20, which is in my name and those of my hon. Friends. I shall also speak to new clauses 22, 23 and 24 and make brief reference to new clause 21. New clauses 20 to 24 combined are an attempt to provide and further strengthen a comprehensive framework for future trade negotiations. This is to ensure that the devolved nations are respected, consulted and fully engaged in trade deals, and that their voices and national interests are properly reflected in trade deals, from determining the negotiating mandate right through to reviewing progress on deals after ratification and implementation.

That is important because although the UK devolution Acts grant Westminster full power over international trade, the domestic impact of many trade agreements extends beyond the competence of Westminster. The devolved Administrations have responsibility for a broad range of policy issues including health, education, agriculture and the environment, and many modern trade agreements include provisions with the potential to lower environmental standards, open up public services to privatisation, expand intellectual property rights or risk increasing the cost of medicines. Those agreements can encroach on the devolved Administrations’ policy space, restricting their ability to make public policy in those areas. That is something that none of us wants to see.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

My hon. Friend is making an important point, and he is not asking to reinvent the wheel. In Canada, the International Trade Committee heard evidence from John Weekes, who is an ambassador to the World Trade Organisation and also a Canadian negotiator. He said that squaring off the provinces of Canada, though adding to complexity, made for better trade deals and a more harmonious Canada. Canada is obviously more interested in keeping itself together than the current United Kingdom is.

[Stewart Hosie]

My hon. Friend the Chair of the International Trade Committee makes an important point. We have already seen the impact of sub-state Parliaments in Europe on previous European trade deal discussions. Indeed, my hon. Friend is right that we have seen the impact of provincial governments in Canada, and we would do well to take that on board here. In a sense, that is what my new clauses are about.

New clause 20 sets the role of the devolved Administrations in helping to approve the negotiating mandate. It suggests that a joint ministerial committee on trade be set up with representatives from all the devolved Administrations, that that committee be required to reach consensus on any draft negotiating mandate, and that it be revisited if the mandate changes during the negotiations. New clause 20 also requires that the consent of the Scottish Parliament and the other devolved Administrations be secured specifically for areas under devolved control that may be affected by a trade deal. That is not a veto, as the Labour Front-Bench team would describe it; it represents responsibility for the areas that the devolved Governments have responsibility for. In short, new clause 20 ensures that any negotiating mandate is first approved by the devolved legislatures and that a joint ministerial committee is created to co-operate and agree the mandate.

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[Barry Gardiner]

I rise to speak to new clause 4, which stands in my name and those of my right hon. and hon. Friends.

The extent to which the Bill encroaches on matters of devolved competence and undermines the power of devolved authorities is of particular concern. I am proud that it was a Labour Government who delivered the devolution settlements. They were established with a presumption of full devolution, except in matters considered reserved to the Government of the United Kingdom. Indeed, amendments to devolution legislation contained in the Scotland Act 2016 and the Wales Act 2017 specifically put that presumption on to a legislative footing, stipulating that Ministers would not legislate on matters that fell within devolved competence without “normally” seeking the consent of the appropriate devolved Government. However, the Bill seeks to do exactly that.

The Public Bill Committee heard in great detail the serious consequences the Bill would have for the United Kingdom and each of the devolved nations and their respective Administrations.

[Stewart Hosie]

Will the hon. Gentleman give way?

[Barry Gardiner]

A little later.

Certainly, my good friend the shadow Secretary of State for Scotland has impressed on me the deficiencies of the Government’s approach, and it is with her strong advice that I have sought, in consultation with the shadow Secretaries of State for Wales and Northern Ireland, to propose a strong new clause that absolutely and even-handedly respects the devolution settlements and the Sewel convention.

[Stewart Hosie]

Will the hon. Gentleman give way?

[Barry Gardiner]

Once I have explained a little bit about what new clause 4 would do, I will happily give way to the hon. Gentleman.

The provisions in clauses 1 and 2, taken with the Government’s latest amendment 34, would allow the Government in Westminster to use Henry VIII powers to modify primary legislation or retain direct EU legislation in areas of devolved competence, such as procurement, agriculture and food standards, without the consent of the relevant devolved authority—even without any consultation. That goes far beyond the convention of not “normally” legislating in matters of devolved competence without such consent.

Just as the Government have erred on one side by proposing in the Bill a disrespectful power grab downwards into areas of devolved competence, so the Scottish National party, in seeking to amend the Bill, have erred in the other direction by failing to respect the boundaries of the devolution settlement and seeking a power of veto and co-decision making in matters that were always reserved to the United Kingdom sovereign Parliament. We must be clear that international trade is a matter of exclusive competence of the UK Government. At no stage has any devolved authority had any competence in respect of matters of international trade, but I will deal with the Government’s amendments first.

Modern trade agreements are so complex and so extensive that there are areas where matters of trade competence do cross over into matters that would otherwise be devolved competence: food standards, animal welfare standards, access to fishing waters, determination of regulatory and oversight bodies, and so on. All these are the substance of international trade agreements, and where such agreements have been negotiated, a devolved authority is entirely right to consider that its consent must be sought prior to regulations to implement the agreement on such matters being made in accordance with the powers in the Bill.

That the Bill allows for Ministers to act in contravention of that convention and without seeking consent from or even consulting the relevant devolved authority is precisely why neither the Welsh nor the Scottish Government have agreed to give the Bill their legislative consent. That is why Labour said in Committee that it would table an amendment to require the convention to be observed, while ensuring that no power of veto was afforded to a devolved Government on matters that were the exclusive competence of Her Majesty’s Government.

[Stewart Hosie]

Will the hon. Gentleman give way?

[Barry Gardiner]

I am just about at the point where I will.

Our new clause 4 would achieve this by setting out that normally the Government must seek the consent of the devolved Governments before making such regulations, ensuring that the convention is protected in the Bill, while similarly allowing the Government to use existing powers where a devolved Government act or—importantly—fail to act in such a way that ensures the UK is in compliance with its legally binding obligations arising from an international trade agreement.

[Stewart Hosie]

The hon. Gentleman is getting this completely wrong. The Scottish Government do not want a veto; the Scottish National party does not want a veto. We recognise that trade is a reserved matter. Our amendments simply say that Scottish Ministers should be consulted, or their consent sought, when UK policy intersects with devolved policy. This is not a veto on a reserved matter. It is common sense. It is equality—it is parity—in respect of implications for devolved matters. Labour Members should go back to the drawing board, because they are simply getting it wrong.

[Barry Gardiner]

I note the hon. Gentleman’s objections. We clearly have a different view of the nature of the devolution settlement. I will try to take his amendments in turn and explain to him precisely why I believe that he is mistaken.

Let us imagine circumstances in which a devolved Administration simply failed to introduce implementing regulation to an aspect of a trade treaty that that Administration did not like. It would be the UK Government, not the devolved Administration, who were held to be in breach and subject to any penalties that might be imposed. That is why the relevant devolution Acts provide that—not “normally”, but in such exceptional circumstances—the UK could implement such regulations without consent to ensure that the UK complied with its international obligations.

Of course, other amendments have been tabled on these issues. New clause 20, tabled by SNP Members, calls for the devolved authorities to have a right to vote on whether Her Majesty’s Government may exercise what is currently the Government’s exclusive competence to begin trade talks. Our new clause states that negotiating mandates should be formulated transparently and with formal engagement with key stakeholders, including the devolved authorities. However, a right of veto on whether trade talks can begin is a power that no legislature in the country—including the House of Commons—currently has, and it would constitute a substantial new power for the devolved authorities.

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[Barry Gardiner]

I am pressed for time. I know that you want me to conclude my remarks very shortly, Madam Deputy Speaker.

While other amendments are about consent before the making of regulations implementing obligations arising under a trade agreement, that clause would prevent the trade agreement from ever having legal effect, as it could not be ratified unless the devolved authorities had consented. It has been carefully worded, but its intent is clear: it is not limited only to matters of devolved competence, but covers all trade agreements in their entirety even if no aspect of that agreement would touch on devolved competence and even if absolutely no regulations were required to implement that agreement. New clause 23(3)(b) would ensure that any trade agreement

“having an impact within the territory over which the devolved authority presides”

was subject to this consent power. Quite clearly, every single trade agreement will be, as there will be exporters across the UK who can trade under the terms of that agreement. It is a thinly veiled attempt at securing the Wallonian veto power that the hon. Member for Kilmarnock and Loudoun (Alan Brown) told us in the Committee was his intention.

The Committee took many more pieces of evidence. I will not detain the House with them today, but simply say that new clause 4 absolutely respects the devolution settlement. It sets out the right relationship so that Government cannot overreach into devolved competence nor the devolved authorities reach up into powers that are reserved for this sovereign Parliament.

I also support new clause 19, but I will not detain the House any longer.

[Stewart Hosie]

I shall speak to amendment 25 in my name and to amendments 26, 27, 28 and 29. New clause 21 is in this group, but I referred to it earlier so will not do so again now.

First, however, let me make an observation about the Labour party’s position. It seems to rely on the new form of words that the UK Government would not normally legislate or do this or do that in relation to anything that was a devolved competence. If we were talking about normal, reasonable people in normal, sensible times when they did not interfere at all except in extremis, perhaps we could accept that. However, they have taken the Scottish Government to court to undermine a democratic decision of the Parliament, so, of course, we accept the principles of devolution, but to make them work there now must be formal arrangements and consent must be sought. We can no longer rely on the formulation of the UK Government not normally doing x, y or z.

[Angus Brendan MacNeil]

Does it not also show, sadly, a centrist approach from the Labour party, which cannot adopt the maturity of Trudeau’s Canada and scoffs at the fact that Belgium is not such a control-freak state that it can allow Wallonia some say in the governance of Belgium?

[Stewart Hosie]

“International” only goes so far—perhaps just to the white cliffs of Dover.

The Trade Bill among other things ensures that the UK can implement any procurement obligations that arise from it being a member of the GPA—agreement on Government procurement—in its own right and ensures that agreements with partner countries corresponding to the EU’s free trade agreements are in place prior to Brexit. If that is all the Bill did, and it maintained all the rights and responsibilities, it might not be great, but it would make sense and probably go through on the nod. The problem is that it goes further than that: it carries on from the provisions in the EU withdrawal Bill limiting the actions of the Scottish Government and other devolved Administrations in areas that are, or ought to be, devolved, and—this goes to the first point about the GPA—that includes procurement.

That is why when the Scottish Government lodged a legislative consent motion in the Scottish Parliament initially, it explained their objections to the Trade Bill with the recommendation that Parliament could not consent to it being introduced. While they welcomed the powers being conferred on Scottish Ministers, the LCM made it clear that they could not accept the constraints placed on the use of those powers, which were analogous to those in the EU withdrawal Bill.

Legislative consent is required for part 1 of the Bill, but is not required for some of the other parts. Specifically, consent is required for the purposes within the devolved competence of the Parliament, which is that the Trade Bill seeks to maintain continuity in the UK’s trade and investment relationships through two implementation powers: implementation of the agreement on Government procurement as an independent member of the WTO; and assisting in the transition of current trade arrangements by enabling, so far as may be required, the implementation in UK domestic law of trade agreements the UK intends to conclude after withdrawal from the EU. These powers may be exercisable within devolved areas, and that is why this is important.

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[John Redwood (Wokingham) (Con)]

I want to be able to understand whether this is a real problem. Can the hon. Gentleman give me a specific example of where he thinks the UK Government might assert a power that they should not assert, and how that might arise?

[Stewart Hosie]

That is a reasonable question, and I will answer it properly. Clearly we cannot tell precisely where the problems will arise, because we do not yet know precisely what the UK Government might do. Having said that, the Bill gives back to Ministers discretionary powers over procurement. In Scotland, because of the actions taken there, 78% of publicly procured contracts go to small and medium-sized enterprises, 60% to Scottish SMEs. The UK Government figure is 20%. If that power is taken back, and if oversight is retained by Westminster, there would be a real risk that we could lose that economic diversity and that fantastic achievement in a real-life area. That is a real concern that I hope the right hon. Gentleman will share.

I shall turn briefly to the amendments. Amendments 25 and 26 seek to address an issue in the Bill that has a direct read-across to clauses in the European Union (Withdrawal) Act 2018 that confer powers on UK Ministers in devolved areas without any form of devolved consent. No amendments have been made to the Act to alter that approach or to require the consent of Scottish Ministers when UK Ministers make regulations in devolved areas. Amendments 25 and 26 seek to ensure that the UK Government seek consent from devolved Ministers before amending legislation in devolved areas.

Before I move on, I meant to say that I recognise that Government amendments 64 and 66, and consequential amendments 65 and 67, now require Scottish Ministers only to consult and not to seek consent in certain areas. However, the number of areas is limited, and the amendments do not address all the problems.

Amendment 27 requires the Secretary of State to consult Scottish Ministers before deciding whether, or for how long, to prolong the period during which implemented powers can be used. That is important because there is no equivalent provision in the European Union (Withdrawal) Act 2018, and because no amendment has been made to the existing provisions in the Trade Bill that allow the UK Government unilaterally to alter the powers of Scottish Ministers in relation to grandfathering trade arrangements for further periods of up to five years at a time.

At present, it is envisaged that the powers in the Trade Bill relating to the grandfathering of existing free trade arrangements with third countries would have to be used in only a very small number of cases that could not be dealt with under the European Union (Withdrawal) Act—for example, for reasons of timing. However, with so much uncertainty around the ease with which existing agreements will be rolled over, it is possible that this restriction could have a more significant impact, not least because many of the 24 areas likely to be subject to the clause 11 regulations—that is, the power grab—are highly relevant to the world of trading and trade deals. If left unamended, or amended only along similar lines to the amendments in the withdrawal Act, this provision in the Trade Bill would in effect allow the UK Government to change the law in devolved areas to allow for the implementation of these arrangements, which might not necessarily remain exactly as they are at present. In essence, that is close enough to having an ability to implement a new trade Bill with almost no consultation or consent at all. Our amendment 28 deals with that problem.

Amendment 29 is small and seeks a direct read across from the European Union (Withdrawal) Act 2018. It would replace the need for consent from UK Ministers in certain circumstances with the need only to consult. As I said, I note the Government amendments in that regard.

We are not arguing for vetoes for Scotland nor for any sense of Scottish exceptionalism; we are simply looking at the facts, understanding what is going on and what needs to happen. If Scottish Ministers are required to consult or seek consent when Scottish parliamentary responsibilities intersect with UK responsibilities, we are simply arguing that UK Ministers should be under the same obligation to consult or seek consent where UK policy responsibilities intersect with those of the devolved Administrations. It was said in the last debate that that happens with the Parliaments of Belgium, and it also happens with the Canadian provinces. The world does not collapse when proper respect and statutory weight is given to the rights and responsibilities of sub-state administrations. It is common sense. We are trying to improve the situation to make it work and to ensure that our voices and our national interests are protected and that the rights of the devolved Administrations are respected.

Time is short, and we do not want many votes on this group so as to allow time for the last group, particularly new clause 18, which needs to be properly debated, but I hope to press amendment 25 to a vote.

[Kirsty Blackman (Aberdeen North) (SNP)]

I will not speak for long because our Front-Bench spokesperson, my hon. Friend the Member for Dundee East (Stewart Hosie) has covered the issues well, but I want to talk briefly about why it is important that the Scottish Parliament, Scottish Ministers and the Scottish people in general should have more of a say in deals going forward than is proposed by the UK Government.

In recent times, the UK Government have not had responsibility for signing off and negotiating trade deals. They have not been the key player. Therefore, they have not been able to undertake some of the practices that we think they could undertake, so it is understandable that the Scottish people are worried given that we have been monumentally badly served by the UK Government over decades. Just look at the roll-out of universal credit, the bedroom tax, the rape clause and the passage of the European Union (Withdrawal) Act 2018—legislation that happened despite the Scottish Parliament refusing consent. All those things show the ways in which the UK Government are badly serving Scotland.

Until I was an MP, I genuinely thought that the UK Government were, at times, probably trying their best. When I got elected to this place, I discovered that when the UK Government propose legislation and we say to them, “Have you thought about how this will affect Scotland?” the answer is not that they are trying to do anything bad, it is just that they forget we exist. They just do not even consider the views of Scotland or the differences in Scotland. Look at how the common fisheries policy has been negotiated by the UK Government, for example. The way that the Government negotiated swaps removed quota rights from Scottish fishermen to the benefit of fishermen in the south of England. Such choices made by the UK Government have a direct negative impact on Scottish people. On that basis, it is understandable that we are worried that the UK Government will not take decisions in Scotland’s best interests because they may simply forget that we exist.

Trade Policy

Stewart Hosie Excerpts

Monday 16th July 2018 Commons Chamber

[Dr Fox]

I will not take any more of the House’s time, Madam Deputy Speaker, but it is entirely untrue that that was the reason for the statement.

[Stewart Hosie (Dundee East) (SNP)]

I thank the Secretary of State for his statement and for advance sight of it, and indeed for the tone that he adopted. I am particularly grateful for what he said about enabling Parliament to scrutinise future trade deals in a timely fashion. However, it should be ensured that we have enough information to be able to scrutinise them properly.

I will not be as cynical as others, but I find it slightly odd that an urgent statement has been made about a nine-month-old document. Nevertheless, what was said was welcome, especially in relation to liaison with businesses, workers and non-governmental organisations, particularly those concerned with trade justice. I ask the Secretary of State to confirm that there will be sufficient sight and enough detail of future proposals for them to do their work as well.

I also welcome what the Secretary of State said about liaison with devolved institutions. However, it is not enough simply to have liaison, discussion and consultation if there are real implications that consent may be required. A role in setting the negotiating mandate may be necessary. Actively seeking consent throughout the process towards ratification is a process that I would have expected the Secretary of State to welcome, and I hope he will look at our new clauses 20 to 24 tomorrow in that regard.

But most importantly, I hope the Secretary of State takes on board when he is liaising—and I take him at his word that this will happen—the deep concern in society, in campaign groups and throughout all sorts of organisations about the implications of trade deals in the future for public safety, good hygiene and the environment, and understands that we never again, as he mentioned in his statement, want to get into a position such as we were with the Transatlantic Trade and Investment Partnership, where, after a short period of time, there was mass opposition to a bad treaty not discussed with the public in advance.

The Secretary of State talks about future trade deals, and I understand why he is making that distinction, but if we have a trade deal that is being rolled over but requires some tweaks or changes that are subsequently extended beyond five years, that may look very similar to a new trade deal. I hope he will look actively at having the same scrutiny of and consultation on those arrangements as he does simply for deals in the future.

[Dr Fox]

I am very grateful to the hon. Gentleman for a response with some substance. He is quite right to say that the length of time available is important; it is why we have chosen a consultation period of 14 weeks—the EU, for example, has 12, and other countries have less than that—and it is important that we allow that to happen. He is also right that with TTIP many of the public felt they had not been involved from the beginning of the process; there was no equivalent process to the one we are setting out today for the pre-negotiation phase so that the public could set out their ambitions and objectives for any trade agreement.

On future agreements, I ask the hon. Gentleman to look at what this House has already agreed on CETA: chapters 23 and 24 specifically place restrictions on Governments from watering down in any way their labour or environmental laws for the promotion of trade. We have already agreed that that will be the basis of our future trade agreement with Canada, and I ask the hon. Gentleman to judge the Government on what we do, not on what is said.

Oral Answers to Questions

Stewart Hosie Excerpts

Thursday 28th June 2018 Commons Chamber

[Graham Stuart]

What my right hon. Friend is absolutely right about is that there will be real opportunities for the UK when it leaves the EU. The appetite throughout the world is first for continuity, but among so many of our existing trade partners there is also a real desire to deepen that relationship and thus support British exports in a way that, sadly, the shadow Secretary of State seems signally not to do.

[Stewart Hosie (Dundee East) (SNP)]

It is not enough, though, simply to promote exports and global trade. They need to be facilitated, which is likely to require new trade deals with our major trading partners, such as the United States. That, however, is not without its risks. When the Minister and the Secretary of State are going about their business promoting trade and starting early discussions about a trade deal, will they make it clear from the outset that our NHS, our public services, our food hygiene rules and important geographic indicators are off limits and out of bounds?

[Graham Stuart]

I am happy to give those assurances, but earlier this week we saw the Scottish National party—the hon. Gentleman’s party, under his leadership in this area—vote against a deal that fully supports the continuity of existing protections. It is interesting that the Scotch Whisky Association and all the thousands who work in the Scotch whisky business strongly support that deal, whereas the SNP opposed it.

EU-Japan Economic Partnership Agreement

Stewart Hosie Excerpts

Tuesday 26th June 2018 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

I welcome the new Minister to his place. I want to start by making an observation about trade deficits and surpluses, which seemed to get the hon. Member for Brent North (Barry Gardiner) into a bit of a pickle. They will not be solved by trade agreements alone, and they will not be exacerbated by trade agreements alone. They will not be resolved by general protectionism. They will be resolved, if they are deemed a problem, by Scottish companies, UK companies and EU companies making better products, marketing them better, designing them better and manufacturing them more cheaply. All trade agreements do is facilitate trade, and that is why this Japan agreement, which is mercifully free of an unacceptable investor-state dispute resolution mechanism, is very much to be welcomed.

I say that because Japan is a massively important market for Scotland. Indeed, the value of Scottish food and drink exports has surged to almost £100 million a year. Japan is Scotland’s 13th largest food and drink export market. Scotch whisky sales alone are up to some £76 million, making Japan the 14th largest global market for Scotch whisky. There are 85 businesses in Scotland with parent companies registered in Japan, with 210 local sites employing more than 6,000 people, with a turnover of £1.5 billion. That represents an increase of some 520 local employees on the 2015 figures and an additional £187 million of Scottish turnover. The more we can encourage investment from Japan into Scotland, and the more we can sell directly from Scotland, the UK and the EU to Japan, the better.

[Bob Stewart (Beckenham) (Con)]

I assume that the hon. Gentleman is saying that his party is fully supportive of and enthusiastic about this deal.

[Stewart Hosie]

I am saying that we see absolutely nothing in the Japan deal that would cause us to vote against it, which, on balance, is a good thing.

We very much welcome this. There was a bit of a bun fight in the previous debate on CETA, but this is a much calmer affair, and it allows me to speak for far less time, which makes me very happy indeed. I agreed with much of what the previous Minister, the right hon. Member for Chelsea and Fulham (Greg Hands), said about global free trade. I was also very taken by the example he gave of Harley-Davidson, which is important in terms of the Japan deal and other trade deals. We have seen the US tariffs on imported steel and aluminium increase Harley-Davidson’s costs in the States by around $30 million. We have seen the reaction to President Trump’s tariffs lead to an increase in the cost of an exported Harley-Davidson to Europe of around $2,500. These tariffs in and out are bad, and they are counterproductive. I hope that people get calm quickly and that these things are wound back, because tariffs do not protect jobs. Tariffs destroy trade and ultimately weaken jobs. [Interruption.] I am glad that the Conservatives are saying that this is an excellent speech.

I am going to say that again in a different way, in the context of the Japan agreement, by quoting the Front Benchers’ favourite European, Jean-Claude Juncker. [Interruption.] I thank the Minister for that marvellous introduction. Jean-Claude Juncker said:

“The step we are taking today paves the way for our companies and citizens to start benefitting from the full potential of the Economic Partnership Agreement with Japan already in the coming year.”

He went on to say—this is the philosophical bit where there is pretty much broad agreement, apart from the proto-Trumpian economists on the Labour Front Bench—that the agreement

“sends a clear and unambiguous message that we stand together against protectionism and in defence of multilateralism. This is more important than ever.”

[Several hon. Members rose—]

Draft EU-Canada Trade Agreement Order

Stewart Hosie Excerpts

Tuesday 26th June 2018 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

I will be as brief as possible to allow as many others in as possible. [Interruption.] I may take slightly longer than four minutes, but I will be as brief as possible.

The Secretary of State said we should take this opportunity to reaffirm our commitment to the principles of free trade. I think we should take any opportunity to reaffirm principles in support of free and fair trade, but we are not engaged in a general debate on trade; we are engaged in a debate on a specific trade agreement—one which is incredibly important to the whole of the UK, and indeed for Scotland because of our history and record of trade with Canada.

I welcome what the Secretary of State said in response to my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), the Chair of the Select Committee—that he was sympathetic to finding other ways to engage and consult with the devolved Administrations, and indeed wider society. That is very important, particularly for Scotland, because we are a trading nation. Indeed, the most recent stats—year-end, quarter 1 of 2018—showed that Scotland’s international exports were growing at the fastest rate of any UK nation: a 12% increase over the year, compared with 8% for the UK—6.5% for England and as low as 5% growth for Northern Ireland. Scotland saw some phenomenal increases in trade—a 48% rise in exports with the Netherlands—and the Secretary of State laid out the trade increase between the UK and Canada.

So we would normally want to be able to support free and fair trade agreements that support and encourage trade, GDP growth, productivity growth and jobs. But trade agreements need to be properly scrutinised and debated, and to contain necessary protections to ensure that our vital public services are protected now and into the future, and there are two aspects of this CETA treaty that we must take issue with and probe. There has not been time to scrutinise it properly, and one might argue that that is now par for the course for this Government, not least in the way that they treat this Parliament. Indeed, in October 2016, the Secretary of State had to apologise to the European Scrutiny Committee after failing to make time for a debate on CETA before the decision was made in the Council by the UK Government to support it, and since then, although there have been outings in Committee, Westminster Hall and oral questions, there has been nothing substantive on the Floor of the House. It is also a disgrace that the Scottish Parliament has not been given any formal role in the negotiation process, particularly when we saw the input of the Canadian provinces and sub-state Parliaments in the EU.

Despite this lack of scrutiny, however, the UK is subject to all the rights and obligations arising from CETA while it remains in the EU, it will be bound by its obligations during the transitional period, and the UK Government’s aim is to roll over the EU trade agreements into an equivalent UK third-party agreement post the Brexit transition. It is therefore all the more important that there is proper scrutiny both in this House and the devolved Parliaments and Assemblies.

We also have concerns that CETA fails to properly secure key protections for Scottish, and UK, public services. According to a note prepared for the European Parliament—the Secretary of State alluded to this today—public services are excluded from CETA, including health, education and other social services. But the counter-argument notes that negotiators have used the so-called negative list approach, which means that all services are open to market liberalisation unless a specific and accurate reservation is entered, at the outset. That can, of course, lead to the creeping liberalisation of public services, as negotiators have failed to include sufficiently watertight exclusions.

I am conscious that time is short, so I will end with two quotes. I heard very clearly what the Secretary of State had to say about protections, but Friends of the Earth has said—I am grateful to the Library for this—that the CETA proposals,

“offer no significant improvement to the dangerous”

investor-state dispute resolution agreement

“and should fool no-one”,

and that the new or renamed

“Investment Court System is nothing but private arbitration under another name”.

The Corporate Europe Observatory and others summed up their objections in this regard by saying that

“it would empower thousands of companies to circumvent national legal systems and sue governments in parallel tribunals if laws and regulations undercut their ability to make money.”

The very fact that those strongly worded critiques exist and run counter to what the Secretary of State says tells me and my party that there is not sufficient clarity or certainty that the protection for our public services is fully and properly in place in this agreement.

European Affairs

Stewart Hosie Excerpts

Wednesday 14th March 2018 Commons Chamber

[Greg Hands]

I am going to make a bit of progress.

I am going to give a few examples of our work around Europe. I promoted the UK’s defence industry in Sweden, visiting Saab, whose new generation Gripen fighter jet could be worth £1.1 billion to UK industry. I and my colleagues engaged with the Polish Government directly on behalf of UK companies to discuss high-value retail opportunities in the Czech Republic—in Czech, I might add, Madam Deputy Speaker. I and my colleagues from DIT and the Department for Exiting the European Union have addressed chambers of commerce right the way across the European Union—in Austria, Hungary and Bulgaria, among many others. I enjoyed making use of my language skills when I gave speeches in German to senior business leaders in Munich, Düsseldorf, Osnabrück, Tegernsee and so on.

DIT’s relationship with Europe does not just extend to export and investment promotion. The vote to leave the EU was not a vote to undermine the EU. It is very important to understand that it is in this country’s interest to have a strong and effective EU. We continue to engage constructively in ongoing EU trade policy, as we currently are a full and equal member of the EU. As the House heard on Monday, we are working closely with our European partners as well as bilaterally to respond to President Trump’s decision to impose tariffs on imported steel and aluminium.

[Stewart Hosie (Dundee East) (SNP)]

Will the Minister give way?

[Greg Hands]

I will make a bit more progress. We are committed to ratifying the CETA agreement with Canada, which provisionally came into effect in September. I was delighted that we were joined by 86 Labour MPs—many of whom are in the Chamber at the moment—who, in defiance of their Front-Bench team, supported the EU’s trade agenda in making sure that CETA was passed. In defiance of the party Whip, they voted for that important agreement with Justin Trudeau’s Canada.

We are supportive of the EU’s work to sign third-country trade agreements in future, and I have attended four Trade Ministers’ Foreign Affairs Councils, which included discussion of these. The Commission has been particularly focusing on agreements with South America’s Mercosur union and with Mexico. We continue to support the ongoing negotiations for both free trade agreements. On Mexico, we would like to see progress made wherever possible in the negotiations, although we recognise the complexity of North American Free Trade Agreement renegotiations running in parallel. We will continue our support for EU-Mercosur trade negotiations and would like to emphasise the urgent need to progress the trade components. It is essential to keep momentum and to achieve a swift political agreement.

Another high-profile agreement is the EU-Japan economic partnership agreement, which the Commission is strongly pushing to fast-track, so that it can be signed during Japan’s Prime Minister Abe’s visit to Brussels in July 2018. As a champion of free trade, the UK has been one of the strongest advocates—actually, I believe the strongest advocate—of this EPA, and we warmly welcome the work of both sides to reach this agreement, which will support global prosperity. We continue to engage constructively on EU business and with our European partners, and we continue to push UK trade and investment to businesses on the European continent. It is important that our trade engagement includes Europe, because our trade with Europe—our nearest and largest neighbour—will always be of great importance.

I often hear the criticism that trade deals outside the EU cannot make up for a loss in EU trade—that has already been referred to in a couple of interventions—but, as I say, this is not an either/or choice. I can assure the House that the Government fully understand the importance of European trade. The EU is our largest trading partner, accounting for 43% of our exports and 54% of our imports. Complex and integrated supply chains across the UK and EU show the importance of making cross-border trade as free and frictionless as possible, and that is why it is important that we get our relationship with Europe right.

--- Later in debate ---

[Greg Hands]

It was a long intervention, Madam Deputy Speaker.

With all due respect to my right hon. Friend—she and I served alongside each other in government—the British people have made the decision to leave the European Union. That was the crucial decision made in June 2016. The Government’s purpose is now to ensure that we have the best possible frictionless trade deal with the European Union, while still being able to take advantage of trade opportunities beyond the EU. As I have stated repeatedly during this debate, that is the Government’s objective.

[Stewart Hosie]

Will the Minister give way?

[Greg Hands]

No. I have already used up 25 minutes, and I am going to make a little more progress.

On services, we have the opportunity to establish a broader agreement than ever before. Of course we recognise that we cannot have the rights of single market membership, such as passporting for financial services, just as we understand that we cannot have all the benefits of single market membership without the obligations, but that does not mean that we should be shackled by existing precedent.

I know that some Members will ask how we can be sure that the EU will agree to our approach. The main point to bear in mind is that it is strongly in EU countries’ interests—economic and otherwise—to sign and agree such a deal. On the day we leave, the United Kingdom will overnight become the EU’s second largest trading partner—larger than China, Japan or India. The Commission estimates trade between the UK and the EU27 to be worth €812 billion. That is only 8% behind the EU27’s main trading partner, the United States, but it is 60% more than with China, which comes third.

Given the effort that the EU has put into deals with the likes of Mexico, Vietnam and Singapore—all of which, crucially, we support, but each of which is significantly less important to the EU than ours—it would be odd indeed for it to reject proposals from us. Furthermore, both the EU and the UK need to send a loud and clear message that we are strong believers in free trade. What message would be sent if we could not reach a free trade agreement?

However, even that underestimates our importance to the EU, because it is the type of trade that matters, not just the volume. Our strongest comparative advantages are in the business, professional and financial services that other businesses need to grow, and in the pharmaceutical goods that no one wants to exclude. For an advanced economy, good financial infrastructure is just as important as physical infrastructure, even if it is not as obvious. Restricting Europe’s access to the City’s financial infrastructure would be the act of a latter-day Beeching—although this time the main line would be closed, not the branch. Yes, the rest of the network could try and pick up the slack—the Frankfurts or Parises—but as I know, because I have worked in the sector, that network has less capacity and is less efficient, and EU businesses and manufacturers could not connect with the capital market that they need. The EU talks about a capital markets union, but how tenable is that without access to Europe’s main capital market?

Our relationship goes beyond mutual economic interest, however. Our membership of the EU is only one part of our relationship with Europe. We can still be neighbours when we leave: we are 30 km from the coast of France. We have cultural ties from before the EU was founded. We will still be in the same core organisations that the EU or its members are part of, from the European Court of Human Rights to the UN to NATO, and from the International Monetary Fund to the World Trade Organisation—the economic, security and humanitarian firmament that holds the international system together.

--- Later in debate ---

[Stephen Gethins]

Well, we have worked out the impact on the NHS and on education, and that will be devastating to our public services because of the empty promises that each and every one of us will pay for.

[Stewart Hosie]

Will my hon. Friend give way?

[Stephen Gethins]

I will just make a little bit of progress.

I say gently to Government Members that there are serious issues around tax raised and GDP that we must all wrestle with in a serious manner, offering some suggestions, but right now the Government are not handling some of the big issues of the day. Time that is being taken up with this issue is strangling political debate. The strikes in our universities right now are crucial for all parties and we should all take them seriously; yet, as we look to a fair solution, this matter cannot be a priority because this Government are so consumed by Brexit and what is going on with leaving the European Union that other issues simply get ignored. Brexit strangles that proper and serious debate.

--- Later in debate ---

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

I would like to focus on the ongoing negotiations between Scotland’s two Governments on the powers set to be transferred from Brussels to the Scottish Parliament, which will have an impact on Scotland’s ability to do business and trade, especially if we get it wrong.

While those negotiations are ongoing, and in the light of the fact that the UK Government have now published their amendment to clause 11 of the EU withdrawal Bill, the SNP Scottish Government are rushing another Brexit Bill through the Scottish Parliament. The EU withdrawal Bill may have its faults, but it is at least legal; the same cannot be said of the SNP Government’s so-called continuity Bill, which is currently being considered by Holyrood. It has been ruled unlawful by the Scottish Parliament’s Presiding Officer and strongly criticised as inconsistent by a range of experts, yet it is still being rushed through in a few days with minimal scrutiny by MSPs.

[Stewart Hosie]

I hope that the hon. Gentleman will be very clear in his words. The continuity Bill has not been declared illegal by anyone. The Presiding Officer has raised a question over its competency, but as the hon. Gentleman well knows, the Lord Advocate has said that it has been carefully drafted so that it is not incompatible with EU law and does nothing to alter EU law until after Brexit, and he made the rather serious point that it is simply preparing for Brexit in exactly the same way as the UK’s withdrawal Bill. I hope, therefore, for the sake of clarity and accuracy, that the “illegal” word will be withdrawn.

--- Later in debate ---

[Stewart Hosie (Dundee East) (SNP)]

My hon. Friend the Member for North East Fife (Stephen Gethins) made a very considered speech in which he laid out in some detail the damage that Brexit will do. I do not intend to go over that ground. Rather, I want to talk specifically about the Scottish Government’s continuity Bill. It is important that the House understands precisely what the Scottish Government are doing in relation to Brexit and why they are doing it.

Before I do so, I want to comment on two things that were said earlier. First, the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont), who is no longer in his place, spoke about the continuity Bill in Scotland being subject to many amendments. Indeed it is—147 or so wrecking amendments from the Tories. I simply say gently to the Tories from Scotland that it would have been better if they had signed up to amendments to the UK’s EU withdrawal Bill as a bloc rather than tabling all those wrecking amendments to the Scottish legislation.

Secondly, the hon. Member for Aberdeen South (Ross Thomson) spoke about trade liberalisation—and I agree with him. At the moment, however, an American company, the Harley-Davidson motorcycle company, is telling us that Donald Trump’s tariff regime will add $30 million to its cost base. If his Administration are prepared to damage all-American businesses, it is naive in the extreme to assume that some kind of good deal will be cut for the UK.

[Ross Thomson]

I am glad that the hon. Gentleman agrees about trade liberalisation. Does he not agree, therefore, that as the EU is the most protectionist organisation there is, with high tariffs on imports coming into it, we will be better off out of it, so that we can help lead the world in liberalising trade?

--- Later in debate ---

[Stewart Hosie]

I know the Scottish branch of the Tory party does not like expert opinion, but the pre-Brexit Treasury leak estimates a loss of up to 10% of GDP, the post-Brexit analysis estimates an almost similar amount, and the Scottish assessment estimates a comparable amount. We are faced with a catastrophe in every circumstance, not only if we go to WTO rules. Better, I think, to fix the problem, to maximise trade, to try to stay within the customs union, and to accept the free movement of people, than to talk about unicorns and rainbows—the Brexiteers favourite slogan.

The Scottish Government’s continuity Bill prepares Scottish devolved laws for the UK’s withdrawal from the European Union. It means that the EU laws currently in force will be retained after withdrawal and that the Scottish Government will be given the tools needed to make sure that our laws keep working after withdrawal. It is a devolved version of the UK Government’s EU withdrawal Bill. I want the House to understand that the Scottish Government have not rejected out of hand the UK Government’s proposals. Their preference is to rely on the UK’s EU withdrawal Bill. But the Scottish and Welsh Governments continue to seek an agreement with the UK that would allow the necessary consent to be given. In this scenario, the Scottish Government would seek to withdraw the continuity Bill. However, the continuity Bill has to be introduced now, and it is going through the Scottish Parliament now, so that if legislative consent is not given, Scotland’s laws will still continue to work properly. That explanation is rather different from the uber-Unionist “wrecking” version that we heard from the hon. Member for Berwickshire, Roxburgh and Selkirk.

This is important because under the UK Government’s proposed way of preparing for the EU withdrawal Bill, they acknowledge that it requires the consent of the Scottish Parliament to become law. Right now, though, neither the Scottish Government, the Welsh Government, nor, on a unanimous cross-party basis, the Scottish Parliament’s Finance and Constitution Committee agree that consent should be given. That is extremely important because, as they say, the Bill allows the UK Government to take control of devolved powers without the agreement of the Scottish Parliament. That is why both the Scottish and Welsh Governments have called it a power grab. The all-party Finance and Constitution Committee has said that it is “incompatible” with the devolution settlement in Scotland. The UK Government’s proposed changes to the EU withdrawal Bill do not yet address that. They would retain the UK Government’s ability to change the limits of devolution without the agreement of the Scottish Parliament. That is important.

In that way, the Scottish Government’s measures differ greatly from the UK Government Bill. The main difference is that the Scottish continuity Bill gives the Scottish Parliament its full role in the preparation of Scotland’s devolved laws for EU withdrawal. It gives the Scottish Parliament an enhanced role in scrutinising proposals for changes to laws as a result of withdrawal and makes some different policy choices, including retaining in law the EU charter of fundamental rights. It also contains a power to keep pace with EU law, for good reason, where appropriate, after the UK chooses to leave the EU.

[Paul Masterton]

The Opposition amendments to the Scottish Government’s Bill significantly water down the massive power grab attempt by Scottish Ministers in relation to continuing alignment with the EU, which I think the Scottish Government want for five years, then five years, then five years. Does the hon. Gentleman agree that those amendments to the Bill are a welcome defeat of the Scottish Government?

[Stewart Hosie]

When Conservatives talk about a power grab in Holyrood, it is code for defending all powers coming to London. I suspect that lots of Tories would settle for direct rule of Scotland and the abolition or dismantling of devolution completely. I am not going to fall into the trap of the hon. Gentleman’s trick question.

The question is: why are the Scottish Government introducing this legislation now? The truth is that Scotland’s laws must simply be prepared for the day the UK leaves the EU. If we did nothing, laws about matters such as agricultural support or food standards may fall away entirely. Many others would stop working in the way they were intended. That is important.

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

Will the hon. Gentleman give way?

[Stewart Hosie]

No, I have given way twice, and there are no extra minutes left.

As my hon. Friends said earlier, we accept in principle that there may be a need for UK-wide frameworks on some matters. It is true that the Scottish and Welsh Governments have been working with the UK to investigate those issues and explore how those frameworks would work. However, it is vital to recognise and respect the way that devolution works. If it is not reserved, it is devolved. If it would normally fall under the remit of the Scottish Parliament and is currently in Europe, it must be put into the devolved institutions now. Should a UK-wide framework and joint working be required, let the UK, the Scottish, the Welsh and indeed the Northern Ireland Governments negotiate that framework.

What we simply cannot have is a power grab where the powers that the UK Government are not certain about are taken back to London, and they then decide in a very patronising way what, if anything, might be devolved in the future. It is completely unacceptable for the UK Government to rip up the devolved settlement. That, in a sense, is the consequence of the power grab.

On Thursday 8 March, the UK Government said that they had drawn up a new list of powers, including ones they say are reserved, that had not previously been shared or discussed with the Scottish or Welsh Governments. A year down the line of these negotiations, a new list is drawn up. We have agreed that the list should be published for the sake of transparency, but we certainly do not agree to the list.

[John Lamont]

Will the hon. Gentleman give way?

[Stewart Hosie]

No, I am not going to give way again.

The Scottish Government are being asked to sign away the Scottish Parliament’s powers with no idea how UK-wide frameworks will work, how they will be governed and how we will go from them being temporary restrictions the UK Government want to agreeing longer-term solutions.

Despite the UK Government’s promise, they failed to bring forward an amendment in the House of Commons to the flawed clause 11 of the withdrawal Bill. Those measures are going through the Lords, but of course, that does not allow proper debate in this place. However, a new amendment—the one that has been proposed—would still allow the UK Government to restrict the Scottish Parliament’s powers unilaterally through an order made in this place, and it could be done without requiring the consent of either the Scottish Parliament or the Scottish Government.

If Brexit is itself, as I believe, an unmitigated disaster, its implementation—because it has not been thought through, and there is no plan—is threatening devolution entirely. There is a lack of understanding and respect for the idea that if a power is not reserved, it is devolved. I therefore ask the Minister to return to the respect agenda: if a power is not reserved, devolve it now. The Government should stop the power grab and get on with negotiating properly with the devolved Administrations, so that the UK withdrawal Bill can actually work without threatening the powers of the other nations within the UK.