Trade Bill

Viscount Younger of Leckie Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Thursday 1st October 2020 Grand Committee

I hope that the Minister will be able to allay my fears with regard to the American position and state categorically that we are not adopting a Tony Abbott and Donald Trump approach, but want a British approach, leading the world on trade and sustainability.

[Viscount Younger of Leckie (Con)]

My Lords, I start by thanking all noble Lords who have contributed to this debate. There have been some heartfelt speeches, with not a little similarity to those made during the recent passage through this House of the Agriculture Bill, as my noble friend Lord Caithness pointed out. I have been left in no doubt about the strength of feeling about the importance of environmental protection as it has been linked by Peers to trade. Some powerful speeches were made by many, including my noble friend Lord Sheikh, the noble Baroness, Lady Hayman, the right reverend Prelate the Bishop of St Albans and the noble Earl, Lord Sandwich.

I will first address Amendment 12, tabled by the noble Lord, Lord Grantchester, the noble Baroness, Lady Hayman, my noble friend Lord Duncan and the noble Lord, Lord Oates, which would stipulate that Clause 2 could be used only to implement trade agreements which are fully compliant with named international environmental obligations, including the Paris climate change agreement. We understand and share the public’s support for the UK’s high standards of environmental protection. The noble Baroness, Lady Hayman, put it more eloquently and extensively than I, but there is so much to do when it comes to fighting climate change. However, this Government have already done a huge amount to protect and improve the environment.

Our departure from the EU offers a unique opportunity to design policies that drive environmental improvement with a powerful and permanent impact tailored to the UK’s needs. As set out in the 25-year environment plan, our ambition is to be the first generation to leave the natural environment in a better state than we found it. It is worth emphasising that we were the first major economy to legislate for net zero emissions by 2050. We are doubling our international climate finance spend to £11.6 billion by between 2021 and 2025. The UK has world-leading capabilities in areas including offshore wind, smart energy systems and electric vehicle manufacture. As I read my newspaper last week, I noticed that the sales of electric and hybrid vehicles recently overtook the sale of diesel vehicles, which is interesting progress. As your Lordships have already heard, none of our 20 signed continuity agreements has reduced environmental protection in any area, and nor will they.

The noble Baroness, Lady Boycott, raised three important concerns about FTAs which do not have standards included. I remind her that decisions on standards are not made in FTAs; they are domestic decisions which are and always will be made in Parliament. No FTA in itself has the power to change standards. Giving evidence to the Bill Committee in the other place, a representative of ClientEarth, a leading environmental law charity, described our approach to continuity as “sensible”. The Trade Justice Movement, the NFU, the Confederation of British Industry and others agreed.

Let me now address Amendment 14, tabled by the noble Lord, Lord Stevenson, and my noble friend Lady McIntosh. During the passage of the Bill in the other place, the Government were accused of attempting to deliver upcoming agreements which go far beyond our mandate for continuity. I emphasise that that is not the case and, as my noble friend Lord Lansley said, we have stayed true to our mandate of reproducing the original EU agreements, subject only to the technical changes required to make the agreements operable in a UK context.

In some areas, significant technical changes to agreements are required to make them work in a UK context. In these circumstances, the power would be used to make the necessary changes to UK domestic law to ensure that the obligations under the agreement are met. Let me give your Lordships an example: resizing quotas with a trading partner to reflect the fact that the UK comprises a different share of a partner country’s trade than did the EU.

Your Lordships will be aware that the Government have recently reached agreement in principle for a UK-Japan comprehensive economic partnership, which analysis shows could increase bilateral trade by £15.2 billion and offer a £1.5 billion boost to the UK economy. This agreement locks in the benefits of the EU-Japan deal and, picking up on my noble friend Lady McIntosh’s argument—and her hopes—goes even further in a number of areas, such as digital and financial services. By excluding this agreement from the scope of the Bill, the amendment would deny UK business and consumers the benefits which the agreement will bring. Your Lordships will already be aware of the enhanced scrutiny package which we have provided, reflecting its status as an enhanced agreement. The Government do not need this power to negotiate or sign agreements, but to implement in domestic law the obligations which arise from them. The “substantially similar” standard is ambiguous and would, unfortunately, introduce an element of uncertainty to the scope of the power.

I will address Amendment 21, tabled by the noble Lords, Lord Oates, Lord Purvis and Lord Fox, and the noble Baroness, Lady Sheehan. We believe that it is not required—there, I have said it, which will not please the noble Baroness, Lady Northover, but I will give my explanations.

I have set out the Government’s commitment to maintaining the UK’s high standards of environmental protections and our ambitious targets for the future. In addition, of the 40 continuity agreements that we are seeking to make, every partner country has signed the Paris Agreement, although it has not yet been fully ratified by all partners. I remind your Lordships that this Bill cannot be used to implement any free trade agreement with the United States, as it did not have a free trade agreement with the EU on exit day. We have already said that we will bring forward separate legislation for new FTAs if required.

Turning to Amendment 22, proposed by the noble Lord, Lord Stevenson, while I understand the concerns that some noble Lords, including the noble Lord, Lord Grantchester, have raised about this power, without it our continuity agreements would be inoperable, which in turn would disrupt the trade flows on which businesses and consumers rely. This power is necessary. It is proportionate and constrained. It is proportionate because it allows solely for the amendment of primary legislation that is direct principal EU legislation or primary legislation that is retained EU law. Obligations in continuity agreements often fall into one of these two categories, which is why this power is needed.

The noble Lord, Lord Beith, said that he did not think that the Henry VIII power is sufficiently constrained and urged the Government to listen to, among others, the Delegated Powers Committee on the use of these powers. I was pleased to see—I hope that he will have seen it, too—that the Delegated Powers Committee in its 21st report expressed no concerns at all over the delegated powers in this legislation. In fact, I point out to the noble Lord that the committee has twice considered this and raised no concerns on either occasion.

On Amendment 40, tabled by the noble Lords, Lord Purvis and Lord Oates, and the noble Baroness, Lady Boycott, I can confirm that our continuity agreements and the underlying EU agreements on which they are based are in full compliance with the United Nations Framework Convention on Climate Change, the Convention on International Trade in Endangered Species of Wild Fauna and Flora and every other international environmental obligation named in the amendment.

Amendment 69, in the name of my noble friend Lady McIntosh, seeks to achieve similar outcomes to the amendments that we have already discussed. It would give Parliament a greater role in determining whether food, animal welfare and environmental standards have been weakened. It would also amend the Taxation (Cross-border Trade) Act 2018 to oblige Her Majesty’s Treasury to have regard to these standards when establishing tariffs and duties.

My noble friend Lord Trenchard spoke about unintended consequences and I draw your Lordships’ attention to two that the proposed new clause could have. The first relates to the impact on the developing world, from which we import a huge amount of food each year. Due to the predominance of agriculture in the economies of developing countries, increasing barriers to trade between these countries and the UK could have an exaggerated effect on the economies of countries with which we sign an FTA. It is not economically viable for firms in the developing world to produce goods to multiple sets of standards for different export markets. Higher standards inevitably lead to higher costs, which could in turn lead to less demand for products and exports from these countries.

The second unintended consequence is the disruption posed to UK consumers in the price and availability of foodstuffs. The effect of the amendment could be to disrupt agri-food imports provided under FTAs entering the country in the short and possibly longer terms, while also jeopardising relationships with friendly trade partners, who would be concerned about this unique and unilateral action. When it comes to developing countries in particular, the UK imports predominantly raw food and ingredients, such as tea, cocoa and bananas, among other things. Where these imports are included within FTAs, they would be required to prove that they meet the UK’s domestic environmental standards, among others, before they could continue to be exported to the UK, which would put businesses in developing countries at risk. It would also disincentivise developing countries from seeking new opportunities through FTAs with the UK. On the proposed amendment to the Taxation (Cross-border Trade) Act, I assure the Committee that consideration for food, animal welfare and environmental standards underpins government policy in every department.

On Amendment 73, I assure the noble Baroness, Lady Jones, that the UK will continue to be bound by those international multilateral environmental agreements —MEAs—to which it is party. The amendment, however, goes beyond the UK’s MEA commitments. It could prevent the UK from negotiating and agreeing international trade agreements with many countries at a time when the Government’s priority is to promote free trade as well as to improve the trade and export opportunities for sectors where increased trade can provide both economic and environmental and climate benefits. In other words, there is merit for us, as my noble friend Lord Trenchard mentioned. The proposed new clause could hinder both our trade and environment and climate ambitions by restricting the opportunities for dialogue with trading partners and limiting the constructive dialogue and good will that are key to making positive progress as the UK leads globally on climate change at COP 26 and more broadly.

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[Baroness McIntosh of Pickering (Con) [V]]

I am grateful to my noble friend Lord Younger for explaining in some detail the negotiating mandate we have agreed with the US. Could he confirm that this extends to animal welfare, as well as environmental protection standards, which is the subject of Amendment 69?

I was a little confused when my noble friend Lady Noakes talked about tomatoes. I had not talked about tomatoes, but there we are. The Minister referred to “unintended consequences”, which I am loath to envisage, and specifically to tea, cocoa and bananas. I understand that they are largely covered by fair trade provisions for marketing in the UK. Is that indeed the case?

[Viscount Younger of Leckie (Con)]

I thank my noble friend for that. I am not sure that I can be drawn to talk about tomatoes. The best thing I could do, particularly for the points on the US, is to write to her with a full answer on animal welfare, which I could attempt, but also on tea, cocoa, bananas and the fair trade question.

[Lord Grantchester (Lab)]

I am very grateful to all noble Lords who spoke on this group of amendments. The Bill is an opportunity to restate trade policy in the important area of environmental protections, in support of the UK’s international obligations. With COP 26 next year, when the Government must be a global leader on the climate emergency, the UK must set an example to the rest of the world by drawing attention to trade that is built on international commitments entered into with so many multilateral agreements.

I hear again that the UK cannot impose regulations on overseas jurisdictions. I merely reply that we already send inspectors into factories and workplaces in countries such as India and Bangladesh, to check on their work practices in the manufacture of clothing. The nature of trade agreements has changed considerably since the UK entered the EU, when it ceased to be the sole competent authority on trade matters, a point acknowledged by the Minister in his reply to an earlier debate on Tuesday. I thank the noble Lord, Lord Beith, for his remarks on the powers subject to annulment by Amendment 22. Your Lordships’ Delegated Powers Committee has not been entirely satisfied by the Government’s reply on this presumptive power.

However, I listened carefully to the reply from the Minister and the many contributions regarding how the Committee may return to the issue later, so I beg leave to withdraw the amendment for further consideration.

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The point about the issues raised by the recent US agreements and the USMCA about Section 230 of the Communications Decency Act will not go away. No doubt it would prompt the noble Lord, Lord Lansley, had he put his name down, to say what he said already —that that is for the future, not for now. We have to have a debate about this, and whether it is now or later, the Government cannot duck this very important issue that matters so much to the people of this country.

[Viscount Younger of Leckie (Con)]

My Lords, I will first speak to Amendments 15 and 16, tabled by the noble Lords, Lord Clement-Jones and Lord Stevenson, and my noble friend Lady Neville-Rolfe. I thank them for their engagement on the Bill and for their wider work over many years on the vital issue of intellectual property. As my noble friend Lady Neville-Rolfe said, this debate is rather reminiscent of six years ago when I was somewhat steeped in intellectual property in the old BIS department. The noble Lord, Lord Stevenson, was my opposite number, and my noble friend Lady Neville-Rolfe was my successor. This could therefore, perhaps, be described as a continuity debate on a continuity Bill.

These amendments would require the Government to publish reports detailing the impact of a trade agreement on intellectual property and data flows before they could make implementing regulations under Clause 2. I am proud to say the UK’s IP regime is consistently rated as one of the best in the world. That is a point also made by the noble Lord, Lord Clement-Jones. Now that we have left the EU, in line with our WTO commitments, the Government will continue to maintain our high level of protections of intellectual property. Let me say that at the outset. We recognise that an effective intellectual property system needs to strike a balance between supporting the UK’s world- class technology sectors to research and innovate and reflecting wider public interests. This balance will be reflected in our approach to intellectual property when striking new free trade agreements.

None of the 20 continuity agreements we have signed has weakened IP protections in any way, replicating as they do the provisions in the underlying EU agreements. They do not introduce new or diluted provisions in the fields of IP, data flows or any other areas. As a result, we heard positive endorsements of the Bill during Committee in the other place from service-oriented industries including the Advertising Association, the Institute of Directors and EY.

The noble Lord, Lord Fox, invited me to take the questions that were raised by the noble Lord, Lord Clement-Jones, and I say at the outset that I should and do take his questions seriously. One of the points that he raised was: will the Government include a wide range of specified provisions on IP in the trade agreements? Given that this is a continuity Bill, I suggest to him that the answers to his question can be found in the status quo. He mentioned negotiations on IP with the USA and New Zealand, which are not included in the scope of the Bill. However, DIT Ministers hold regular briefings with Peers on the progress of negotiations; I have attended at least two, and I encourage him to join up next time round.

Further to this, the noble Lord asked about the question of IP in our negotiating objectives in the US agreement. If he would like more information on our approach to IP in the negotiations with the USA, he can consult our negotiation objectives. Giving him a bit more detail, I assure him that, first, we will secure copyright provisions that support UK creative industries through an effective and balanced global framework. We will project UK brands while keeping the market open for competition, and we will promote transparent and efficient administration and enforcement of IP rights.

We have already mentioned the parliamentary reports we publish alongside signed agreements explaining our approach to delivering continuity. We believe that publishing additional reports alongside these would slow down the process of concluding agreements and increase the bureaucracy involved. In fact, taken cumulatively, all of the amendments tabled to the Bill by your Lordships would compel the Government to publish no less than 11 new reports alongside every single continuity agreement we sign. I believe that this would not be a good use of time or resources, and I hope the Committee agrees with that.

The UK has long been, and remains, a strong supporter of an open, rules-based international trading system. The WTO’s TRIPS—which was referred to in the debate on the last group—sets out the minimum standards for trade in intellectual property across all WTO member nations. As the UK updates the terms of its WTO membership, we will be making sure that we remain compliant with the TRIPS agreement and, as part of future trade deals, the UK will look to refer to—and improve on—the standards set out in international agreements.

With regard to future FTAs—although they are not included in the scope of this Bill—we support ambitious and liberal provisions that support international cross-border data flows while understanding the importance of ensuring that personal data protections are not put at risk. The UK Government are committed to ensuring that uninterrupted data flows can continue between the UK, the EU and other countries around the world. I reassure the noble Lord, Lord Clement-Jones, that the free flow of data, including personal data, is crucial to international co-operation in the modern world, but it must be underpinned by high data protection standards. We are equally committed to ensuring high standards of data protection and privacy after the end of the transition period.

The noble Lord, Lord Fox, mentioned in his remarks the 2020 Schrems II judgment, which I will say a few words about to help him with some more information. As I said earlier, the UK Government are committed to ensuring high data protection standards and supporting UK organisations and businesses is very important. The UK Government are reviewing the details of the judgment in the case referred to earlier—Schrems II— and considering its impact on data transfers for UK organisations.

As he may know, the UK Government intervened in the case, arguing in support of standard contractual clauses—so-called SCCs—and are pleased that the court has upheld this important mechanism for transferring data internationally. Therefore, the UK may independently take steps to address issues arising from the judgment after the transition period. The Government are working with the Information Commissioner’s Office to ensure that updated guidance on international data transfers will be available as soon as possible. The Government will continue to work with the commissioner’s office and international counterparts to address the impacts of this particular judgment.

The Government have been clear that FTAs do not provide a legal basis for the cross-border transfer of personal data. I make it clear that this will be controlled by our domestic data protection legislation. Moving forward, as we develop our trading relationships with other countries, our approach must be transparent and inclusive. We are working closely with a wide range of stakeholders to develop our priorities around trade and intellectual property, including the devolved Administrations, industry and consumers. Getting the right outcome for UK inventors, creators and consumers will be key. Given that we are seeking to replicate commitments in existing EU trade agreements, I do not believe that producing further reports, in addition to those we already publish, alongside each signed agreement is necessary or proportionate.

I now turn to an important part of this debate. Amendment 34 is intended to prevent the Clause 2 power being used to implement continuity agreements which do not comply with existing domestic and international obligations regarding the important subject of the protection of children and other vulnerable user groups using the internet. We heard passionate speeches from the noble Baroness, Lady Kidron, and others, including the noble Baroness, Lady Ritchie. I want to be clear, perhaps echoing the words of the noble Baroness, Lady Kidron, that this Government are, and must be, committed to making the UK the safest place in the world to be online and for children to be online. We carefully consider any interaction between trade policy and online harms policy in trade agreements. I can confirm that we stand by our online harm commitments, and nothing agreed as part of any trade deal will affect that.

In 2019, as the noble Baroness and others will know, the DCMS published the online harms White Paper, with the initial government response in February this year, setting out the direction of travel. The DCMS will publish a full government response to the White Paper consultation later this year. This will include more detailed proposals on online harms regulation and will be released alongside interim voluntary codes on tackling online terrorist and child sexual exploitation, as well as abuse content and activity. The DCMS will follow the full government response with legislation, which is currently being prepared and will be ready early next year.

It should come as no surprise that our continuity programme is consistent with existing international obligations, as it seeks to replicate existing EU agreements, which are themselves fully compliant with such obligations. By transitioning these agreements, we are reaffirming the UK’s commitment to international obligations on protecting young and vulnerable internet users, which is so important.

The noble Baroness, Lady Kidron, asked whether the agreement between the EU and the US on data services should be considered in the scope of the Bill and be able to be rolled over. The scope of the Bill applies to either FTAs or agreements that relate mainly to trade between a partner country and the EU signed before the UK left. She will know that we are in negotiations with the US on an FTA, as I mentioned earlier, and we will bring forward separate legislation on that if required. I hope that that gives her enough reassurance at this stage.

Our continuity agreements will safeguard, not undermine, our domestic protections and international commitments regarding online protection of young and vulnerable internet users. In the light of those reassurances covering all the amendments, I hope that Amendment 15 will be withdrawn and that noble Lords will not press Amendments 16 and 34.

[The Deputy Chairman of Committees (Lord Haskel) (Lab)]

My Lords, I have had two requests to speak after the Minister from the noble Lords, Lord Fox and Lord Stevenson. I now call the noble Lord, Lord Fox.

[Lord Fox (LD)]

I thank the Minister for his response on Schrems II, which was very helpful. I would like just one further detail. Can he confirm that the advice, when it comes, could concern where databases are domiciled? If so, the advice needs to be made available earlier rather than later so that companies are able to comply. Therefore, can he give some indication of the timetable for when business might get some guidelines so that they can work out their new data management policy?

[Viscount Younger of Leckie (Con)]

Absolutely. That is a very fair question from the noble Lord. As he will expect, I do not have a timeline, so the best thing for me to do is to look at his question and write to him, giving whatever information we have from the department, together with any extra information that might be helpful to him.

[The Deputy Chairman of Committees (Lord Haskel) (Lab)]

I have also had a request from the noble Baroness, Lady Kidron, to speak after the Minister, but I now call the noble Lord, Lord Stevenson.

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[The Deputy Chairman of Committees (Lord Haskel) (Lab)]

I now call the noble Baroness, Lady Kidron.

[Viscount Younger of Leckie (Con)]

I believe I should respond to the noble Lord, Lord Stevenson, if I may. The noble Lord makes a very fair point. It is fair to say that this is, just by dint of the coincidence of timing, tied up with all the work we are doing on the online harms White Paper. He will know that more detailed proposals on the regulations will be released alongside the interim voluntary codes. We need to look at this in tandem with what we are doing with free trade agreements. That is the answer I can give to him at the moment. Again, I will write to him with more details on this because it is a very important subject.

[Baroness Kidron (CB) [V]]

I thank the noble Lord, Lord Stevenson, for asking half of my question, but, as the Minister just said, it is tied up with online harms, we are tied up with trade—I think that is our collective anxiety, if you like. At what point do these things start impacting on each other in ways that are negative to children? The reason for having a standard going in is to make sure that children are not victims of what happens over the next months and so on. I want to make that point.

I have another question, if the Minister would be kind enough to answer. He mentioned, a couple of times, high standards of data protection, but does he mean the standards that we negotiated so long and so heavily during the passage of the DPA 2018? Are those the standards, and will those remain the standards, or are we talking about some other general high standards of data protection?

[Viscount Younger of Leckie (Con)]

To answer the second question from the noble Baroness, we could well be. I think I have said, in other respects, when we do finally leave the EU after the transition period, because we will have left the EU it will be up to us to look at our standards and raise them if we think that is right. On the way forward on online harms, which is very close to the heart of the noble Baroness, I reassure her that there is a lot of cross-departmental work going on here. Although this is DCMS-led, I reassure her, on behalf of my noble friend Lord Grimstone, that the DIT and other departments are working together on the way forward, bearing in mind the White Paper.

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for his response. It was useful to be reminded by the noble Baroness, Lady Neville-Rolfe, of his antecedents. I remember many happy hours discussing copyright exceptions—I think it was from 2013 onwards —and I am sure it was one of the Minister’s favourite jobs at the time, with all the minutiae of intellectual property involved.

This has been a relatively short but, I hope, well-argued debate and I am grateful to those who supported not only my Amendment 15 but Amendments 16 and 34, which I strongly support as well. If we were looking for an order of priority, Amendment 34 in the name of the noble Baroness, Lady Kidron, is the absolute touchstone for this debate. She referred to putting an intentional red line in the negotiations, a very powerful phrase. The noble Lord, Lord Sheikh, said that children’s safety should not be traded away again, which really emphasises the importance of this. The point was made that we do not yet have all the legislation we need in this area, therefore any negotiations need to take account of future legislation. It is a really tricky one. The Minister has a wonderful bedside manner and used the word “reassure” on a number of occasions, but this is a really difficult and important area. Personally, I am not 100% reassured and if the noble Baroness wanted to bring her amendment back on Report, many of us would give her a great deal of support.

Turning to data, I agree with my noble friend Lord Fox: the one thing giving business sleepless nights is the whole issue of data adequacy and data flows. Post Schrems, that is a really difficult area. The Minister mentioned it and the noble Lord, Lord Agnew, answered a Written Question from me recently about the taskforce. It is urgent that we should have those guidelines in place. It is not adequate that people should simply have to rely on standard contractual clauses, especially for small business, as it will imply that they have to take a great deal of legal advice. I should say that since I no longer charge by the hour, I have no direct personal interest in that. However, it is a serious area and I hope it is being taken on board at speed.

On the IP front, there was a kind of multiple-choice questionnaire which I hope the Minister will use in future negotiations to tick or cross, as the case may be. The big problem is that this all demonstrates the feeling that the scrutiny process is inadequate, whether on continuity agreements or new agreements. The Minister says that the amendments would require another 11 reports, or whatever the tally would be, but that demonstrates a theme that has run through Second Reading and Committee so far: that the level of scrutiny we are being given over free-trade agreements is inadequate. Whether on things such as IP and data, which are crucial to business, or things which have a greater moral and societal foundation, as in the amendment of the noble Baroness, Lady Kidron, this is about the opportunity for scrutiny not being adequate at this point.

I will obviously withdraw the amendment, as we are in Grand Committee, but we are, in a sense, still back with the feeling that we have to go much further on scrutiny. If that involves 11 reports, so be it: these are important agreements for our future. I beg leave to withdraw the amendment.

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Moved by

[Viscount Younger of Leckie]

That the debate on Amendment 17 be adjourned.

Motion agreed.