text:
Trade Bill - Second Reading
– in the House of Lords at 2:00 pm on 8th September 2020.
All Lords debates on 8 Sep 2020
Lord Grimstone of Boscobel:
Moved by Lord Grimstone of Boscobel
That the Bill be now read a second time.
(Citation: HL Deb, 8 September 2020, c672)
Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy
My Lords, it is a great honour to open this debate and indeed to address this House for the first time. I realise that many noble Lords will want to contribute to this very important debate, so I will set an example by keeping my opening remarks concise and to the point.
I start by paying tribute to the extraordinary people throughout our country who are tackling the coronavirus outbreak. We owe them all a great debt of gratitude.
I thank all those who have extended me help, advice and friendship since I joined your Lordships' House—in particular, my two supporters, the noble Baroness, Lady McDonagh, and my noble friend Lord Blackwell. I also give my sincere thanks to the doorkeepers, the Clerk of the Parliaments, parliamentary staff, Black Rod and the police officers, who have all explained the procedures of this House and, more importantly, have sometimes prevented me getting totally lost. I should also give a special thanks to my noble friend and Whip Lord Younger, whose knowledge and support has been invaluable.
Finally, I must thank my partner, my family, my friends and all those who have helped make me what I am today. My faults are entirely of my own making.
I am an ordinary person from an ordinary family, brought up in Croydon and fortunate to have been given a council scholarship to Whitgift School, from whence I went to Merton College, Oxford. As Private Secretary to the noble Lord, Lord Owen, when he was Minister for Health, and later at HM Treasury, where I helped oversee more than 25 privatisations working for my noble friend Lord Lawson of Blaby, I got my first taste of politics.
I then became a banker at Schroders, travelling to around 50 countries exporting the skills of the City. This taught me that globalisation, trade and investment are the best routes to prosperity and peace, and that no matter what our race or creed, or whether we are rich or poor, we are all the same. The only difference is whether we have been given opportunity.
During two decades spent serving on 20 boards of major companies around the world, including chairing two of the UK's largest financial services institutions, I learned the benefits of good governance, clear thinking and decisiveness. As the first non-military member of a front-line command board when I joined the board of the Royal Air Force's Strike Command in 1999, and then proudly serving as the lead non-executive for six Defence Secretaries, I gained the utmost respect for our Armed Forces.
I am proud to have been asked to serve this House and our country, and I will do it to the best of my abilities. I thank noble Lords for listening to me and I am mightily relieved that that is my maiden over.
Turning to today's business, I am honoured to move that this Bill be read a second time. As the Minister for Investment since March, I have had around 250 ministerial engagements, meeting virtually with hundreds of people from companies big and small. I have also held a number of briefings for Members of your Lordships' House on trade matters, all of which have made me realise the vast experience and knowledge that there is in your Lordships' House and how much I have to learn.
Above all, it has impressed upon me how the Covid-19 pandemic has impacted businesses at an unprecedented speed and scale. To me, that truly highlights the importance of trade: to keep supply chains open and to ensure that we have all the vital equipment we need. In the longer term, it has shown that building resilience and strengthening the rules-based trading system will be crucial to our recovery. That means maximising the economic benefits of trade and ensuring that all parts of the UK, and companies of every size, benefit from it, especially SMEs, the backbone of British business. It means increasing the diversity of our trade—that is, both imports and exports—and reducing our exposure to future economic shocks. Now that we have left the EU, we have the opportunity to do just that: to determine our rules, defend our national interests, and champion free, fair, rules-based trade globally.
This Bill, like its predecessor, the 2017-19 Trade Bill, is about continuity and certainty—continuity of the existing trade agreements that we had in place through membership of the EU, and the certainty that continuity offers for our businesses and trading partners, plus giving the Government the vital tools that they need to secure our future as an independent trading nation.
I turn to the main elements of the Bill. First, it allows us to implement the UK's obligations arising from the trade agreements that we are transitioning from the original EU/third country agreement, such as those with South Korea, Chile and Switzerland, thus allowing trade to continue to flow freely with our established partners. The Government have already signed 20 continuity agreements with 48 countries, representing 74% of the trade with countries with which we are seeking continuity. Every single one of these agreements illustrates the Government's commitment to maintaining our high standards, whether in relation to the environment, animal welfare, workers' rights or human rights.
My noble friend Lord Lawson of Blaby once wrote:
"The NHS is the closest thing the English … have to a religion."
I am sure that he meant no offence to the Lords spiritual, but he captured the importance of the NHS to the people of this country, and to this Government. We have been clear: the NHS is not, and never will be, for sale to the private sector, whether overseas or domestic.
I know that a lot of concern has been raised about the trade deals and how they will impact our hard-working farmers. I can reassure your Lordships' House that this Government are committed to upholding our world-class food safety and animal welfare standards. Food imported into or produced in the UK will always be safe. Chlorinated chicken and hormone-injected beef are not permitted for import into the UK. The independent Food Standards Agency and Food Standards Scotland make sure that all foods comply with our existing standards. I make it absolutely clear that decisions on these standards are separate from trade agreements.
Not only have the Government put farmers and other businesses at the very heart of our negotiations but we have listened to the concerns of Parliament. We have launched the independent Trade and Agriculture Commission with representation from farming unions across the UK that will make policy recommendations to the Government. We have launched an agri-food trade advisory group to provide the Government with strategic insight and expertise throughout our FTA negotiations. I am pleased that its members include the National Sheep Association, the NFU and the International Meat Trade Association, among others. We are committed to a serious examination of what can be done through labelling to promote high standards and high welfare across the UK market. We have also published an agri bounce-back plan that will provide unprecedented help for SMEs and allow them to capitalise on the trade agreements being negotiated with the US, Australia and New Zealand.
I should like to make it clear that this Government and I are committed to transparency around the trade continuity programme. We have published voluntarily, and will continue to do so, parliamentary reports outlining significant differences between the original EU/third country agreements and the new UK/third country agreements. Regulations implementing these agreements are subject to the affirmative resolution procedure. I note that the 21st report from the Delegated Powers and Regulatory Reform Committee made no recommendations on the delegated powers in the Bill.
I recognise that there has been concern that upcoming continuity agreements with countries such as Canada or Singapore will go beyond continuity. Let me reassure noble Lords that this is not our intention. Where we have set out to achieve an enhanced agreement, as in the case of Japan, we have committed to additional scrutiny arrangements that closely mirror those we have put in place for new FTAs.
Secondly, the Bill allows the UK to implement our obligations under the WTO Agreement on Government Procurement, or GPA, once we accede as an independent party. As noble Lords will be aware, the GPA is an agreement seeking to mutually open up government procurement markets among its 20 parties. Acceding to the GPA in our own right will guarantee British businesses continued access to this £1.3 trillion a year market. That is so important. We intend to accede to the GPA on broadly the same terms as our current membership through the EU. I want to be crystal clear: becoming an independent GPA party does not restrict government from deciding how to deliver health services in the best way for the UK.
Thirdly, the Bill establishes the independent Trade Remedies Authority to protect our businesses against injury caused by unfair trading practices, such as dumping or subsidy, or unforeseen surges in imports. The TRA will deliver an independent investigation process that businesses can turn to when others are breaking the rules, and will recommend appropriate measures where necessary.
Finally, the Bill provides for the use of data to enable government to discharge its trade-related functions now that we are no longer members of the EU. It gives HMRC powers to share data with other public bodies to fulfil its trade-related functions, such as in relation to trade disputes. It provides for a data sharing gateway between departments and specified public bodies to safeguard existing trading relationships by helping ensure that trade flows freely across our borders.
Let me also be clear what this Bill is not about. It is not about implementing those FTAs we are seeking with new partners around the world, such as the United States, Australia and New Zealand. The implementation of such agreements will be subject to separate scrutiny arrangements, and, in line with provisions included in the amendment relating to scrutiny passed during debate on the 2017-19 Trade Bill, the Government will publish their negotiation objectives, voluntarily publish impact assessments before and after negotiations, and keep Parliament updated. At the end of negotiations, treaties will be subject to the usual ratification procedures. Parliament will retain, through the CRaG process, the right to block any treaties from being ratified.
FTAs cannot change UK law; as noble Lords know, only Parliament can do that. Parliament will retain the right to reject any domestic implementing legislation necessary for a trade deal. By blocking any legislation, should it be required, Parliament can also block ratification. This is in line with similar systems, such as Canada's, and goes further than those in countries such as Australia and New Zealand, where parliaments cannot directly block ratification of a trade treaty.
The International Trade Committee in the other place has proposed to the Secretary of State a structure for providing scrutiny. The department is taking this very seriously and we will be working with it, and the International Agreements Sub-Committee, on developing this. I very much welcome this. These committees do an excellent job and I intend to maintain a close relationship with the IAC and its chairman, the noble and learned Lord, Lord Goldsmith; I know that my right honourable friend the Trade Secretary will be doing similarly in the other place. As part of this, we are committed to ensuring that committees are able to scrutinise trade deals on an ongoing basis, and, where possible, we will share information with those committees on a confidential basis.
Nor is the Bill about negotiations with the European Union on our future relationship. That too will be subject to separate scrutiny arrangements. This Bill is solely concerned with ensuring we have the right tools in place to implement obligations from trade agreements with countries that the EU had an agreement with before 31 January.
The unprecedented economic challenge of coronavirus makes the need for this Bill clearer than ever. It will ensure continuity through powers to implement trade agreements with partner countries which previously applied under the EU; it will secure continued access for UK businesses to the vitally important global public procurement market; it will establish an independent body to provide our businesses with the protection they need from unfair trade practices; and it will ensure that we have the necessary data to offer the best possible support for businesses to trade and to help their goods flow seamlessly across our borders.
In conclusion, as we recover from this economic crisis, providing certainty and predictability in our trading arrangements will be vital to securing the interests of businesses and consumers, and to fulfilling this Government's mission to unleash the potential of, and level up, every region and nation of our United Kingdom. This legislation will provide us with the tools to do precisely this, and I commend the Bill to the House.
Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Digital, Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy and International Trade) 2:18 pm, 8th September 2020
My Lords, first, I congratulate the noble Lord on his maiden speech. He has had to wait a long time to make it in these extraordinary times, but that has not stopped him performing, as he shared with us, dual responsibilities in both DIT and BEIS for the last few months. As we have just seen, the noble Lord has become rather a seasoned performer, and I am sure your Lordships will recognise that he is more than ready to take on his responsibilities with this Bill. We also look forward to the maiden speech of the right reverend Prelate the Bishop of Blackburn, and to further contributions from both.
We have more than 75 names listed for the debate today, which shows the increased level of interest in trade matters right across your Lordships' House. We welcome this and look forward to the many and varied contributions from noble Lords.
I thank the Minister for the many virtual meetings and discussions we have had since the Bill was introduced in the other place and since he took up his position. It is possibly based on a shared background of reading chemistry at Oxford, but we have been able to develop what I hope he would agree is a good working relationship. This will be of value as we deal with some of the difficult issues raised by the Bill and as we go through its various stages during the next few months.
In his speech, the Minister spent quite a lot of time trying to persuade us that this was a simple continuity Bill, limited in scope to ensuring that we continue to benefit, after 31 December 2020, from the free trade agreements negotiated by the EU since 1972. I should warn him: his predecessor tried this argument last time round; it did not work then, and it will not work now. The arguments have not improved with time.
On the one hand, if the Bill receives Royal Assent in its present form, our trade policies will be determined within a structure with far fewer opportunities for scrutiny and debate inside and outside Parliament than are available within the EU at present. Civil society, consumer groups, worker representatives and many others—now largely excluded from the list of consultees—all had the opportunity to submit views and attend meetings and to influence the way in which the EU Parliament took its decisions.
Committees in the EU see draft mandates, receive regular reports on discussions and have the power to approve the final deals. Recent trade agreements proposed by the EU such as TTIP and the Canadian Free Trade Agreement have had material changes made to them because of input from elected Members. Because we have no existing responsibilities for trade and hence, nothing set out in current legislation, unless we amend the Bill, Ministers will be free to negotiate future trade deals using archaic royal prerogative powers, almost entirely avoiding accountability to Parliament.
No other major trading country actively prevents its elected representatives having a say in shaping, reviewing and agreeing its trade policies, and there is no other area of public policy in the UK which is off limits in the way that trade will be to both the House of Commons and the House of Lords. This is not acceptable. Why, when our democratic system depends largely on checks and balances on the Executive being exercised through scrutiny and review by both Houses of Parliament, are the Government trying to pretend that there is no need for this in current and future trade agreements? Volume of consultation is not a replacement for active participation in Parliament.
Our approach to the Bill is consistent with the approach we took in 2017-19, which found favour right across the House. We want to ensure that, as the UK regains responsibility for its own trade policies after five decades, we have an Act in place that sets out our long-term vision for trade—something absent from this Bill—and our plans and detailed policies to secure growth, protect rights, safeguard supply chains and tackle global challenges such as climate change and pandemics. Doing so will not only show clearly our intent and purpose but will help to build public and market confidence, which matters even more than usual in these uncertain times. This is particularly important given that questions about how we will shape our new, post-Brexit trade policies and ensure that we maintain the high standards we currently enjoy have been gaining traction among the public in recent months, not least because of concerns about lowering standards of food imports and the impact of Covid-19. Ministers can carry on claiming that this Bill is nothing more than a technical measure but they are, once more, out of step with the public, who understand that it goes to the heart of what we are as a nation and how we engage with the world.
I turn to the Bill itself. Our key amendment is based on the belief that the Government need to establish appropriate parliamentary scrutiny of trade deals, be they significant changes to existing EU deals or new, freestanding FTAs. We would like to build on the first steps taken by the Government, which we welcome—they represent a change of heart—but we believe they need to go further. We will suggest that the International Trade Select Committee and the Lords' new EU International Agreements Sub-Committee should have early access to, and the power to propose changes to, negotiating mandates, receive ongoing negotiation reports and have the power make recommendations about whether Parliament should approve trade treaties and agreements.
The current arrangements under CRaG 2010, which the Minister explained in some detail, provide only for retrospective approval, and only if the Government allow that, since they control the time in which these debates can take place. Using the negative procedure is ineffective in practice and inappropriate for such a key area of public policy.
We must also ensure that consumers, trade unions and wider civil society are fully engaged in trade policy. The new trade advisory groups, with their restricted memberships and non-disclosure agreements for those who serve, have been widely criticised, and rightly so. As presently constituted, they cannot provide the wide range of views the Government say they need —and how can they, when they do not even include consumer or worker interests?
The meretricious persiflage surrounding the new appointment to the Board of Trade, complete with its single Privy Council member and strictly limited set of advisers, is surely modelled on a comedy penned by WS Gilbert. In any case, it is no answer to the broader point about lack of parliamentary scrutiny.
Given that certain trade policy issues are not reserved, we need to ensure that the devolved nations and regions of the UK have the powers they need to deliver their responsibilities and that proper mechanisms are in place to respect the constitutional settlement, including a robust dispute resolution mechanism, should there be disagreement. Of course, this is not an issue limited to trade but, even so, the status quo is completely unsatisfactory and needs to be addressed. In this respect, the Northern Ireland protocol to the withdrawal agreement and its implications for customs and tariffs across the new border in the Irish Sea needs detailed further examination; we will be raising this in Committee.
Turning to other areas of the Bill, your Lordships' House will recall that, when considering the predecessor Trade Bill in 2019, your Lordships' House made some 30 amendments to it. Some of the key ones covered employment rights, food, environmental standards, custom arrangements and future EU collaboration. As the then Minister put it,
"no legislation passes the scrutiny of the House without being improved … this is unquestionably true here."—[Official Report, 6/3/19; col 615.]
Yet these changes have been stripped out of the current Bill. Even the Government's own amendments on gender equality and reports to Parliament have gone.
During the Commons debate on the current version of the Bill, our Labour Front-Bench colleagues proposed amendments to protect current import standards in respect of animal welfare, the environment and food quality, to guarantee rights and protections for working people and to fully protect the NHS in future trade negotiations. Ministers rejected all these amendments and more, but we will be challenging these decisions again in Committee.
On other sections of the Bill, we will probe how the government procurement agreement will work in practice. At the same time, we have to make sure that UK firms can compete for the procurement opportunities on offer in signatory countries on a fair and equitable basis. I agree with the Minister that we need to strengthen the independence and integrity of the Trade Remedies Authority. The TRA cannot be effective if it is simply another non-departmental public body under the control —or, perhaps, the thumb—of the Secretary of State.
The UK is, and always has been, a strong trading nation. Labour believes strongly that trade will play a vital role in our economic future, not least as we struggle to recover from the devastating effects of Covid-19. The Government should welcome the wider interest now being shown in how we develop our trade policy, and recognise that encouraging Parliament, the devolved Administrations and wider society to play a constructive role not only strengthens their own hand in negotiations but is the right thing to do.
Baroness Kramer Liberal Democrat Lords Spokesperson (Treasury and Economy) 2:27 pm, 8th September 2020
My Lords, I join in the welcome to the noble Lord, Lord Grimstone; he brings great experience to our House.
This Bill is a successor to the Trade Bill passed by this House last year, but significant elements have now been stripped out—primarily, the amendments agreed in the Lords. It is a Bill that reaches into the DNA of my party, as free, open and fair trade is the bedrock of our political movement. We will defend those principles as we engage with the Bill. The Bill is also about much more than continuity agreements, as the Government themselves have demonstrated in data-sharing clauses. My colleagues and I will follow the Government's lead and use the Bill to address UK trade issues more broadly.
The amendments made by this House last year were necessary then and are necessary now. They remain crucial to underpin transparency, the devolution settlement, the future of the NHS, the Northern Ireland border, the movement of people, minimal trade barriers and, above all, safeguarding the status of Parliament with regard to treaties. Given the Government's negative attitude to international development and aid, development issues will need to be considered in this Bill process, as will regulatory standards, climate change and sustainability, given the alarm bells that have sounded in the Government's shaping of the Agriculture Bill.
Speaking personally, the issue that exercises me most is Parliament's role—or the lack of it—in making trade treaties. Trade now shapes much of the economy of this country, yet, under the Government's plans, Parliament's role in this key area is largely reduced to that of a talking shop and bystander. When we were a member of the EU, people and organisations in the UK concerned with matters of trade and its impact could follow the negotiations in some detail because of high levels of transparency. Even more importantly, they could turn to elected representatives to challenge and change the negotiating mandate and the final treaty; that was parliamentary democracy. Now, both continuity agreements and new trade agreements will be subject only to the procedures in the Constitutional Reform and Governance Act—CRaG—which the Lords Constitution Committee has described as "anachronistic and inadequate". In the Lords, this is a particularly weak power without the capacity to delay ratification; in both Houses, of course, it prohibits amendment. Ironically, it also weakens the UK's ability to negotiate. The USA constantly refuses trade concessions, saying, "We can't get that concession through Congress". UK negotiators must have that same leverage.
I particularly express my respect for the Conservative MPs in the House of Commons—notably the Member for Huntingdon, Jonathan Djanogly—who stood up for Parliament and democracy. I hope Members across all parties in the Lords will have that same courage.
Let me say a few words on the trade remedies authority. Why it will get the name "authority" I simply do not understand, because authority is precisely what it will not have. An advisory body is not a regulatory body. It also means that in any dispute the UK position will be seen as politically tainted and not the work of an independent objective body testing against clear criteria. I hope that at the very least in the course of the Bill we will get some illumination on that process.
Those discussions will also help us to understand the implications of the Government's state aid position. I belong to a free trade party very concerned about the use and distortions of state aid, except in instances of market failure. European rules have provided a constraint on inappropriate state aid. The failure to find a common state aid standard between the EU and the UK will trigger a new wave of competitive state aid and everyone will lose.
We had the bluster on Monday from the Prime Minister announcing that no FTA with the EU would be a "good outcome" for the UK. I am sure that business across the country shuddered. Then came the leak revealing that the internal market Bill will eliminate the legal force of parts of the withdrawal agreement in full cognisance that this will breach international law. I notice the Minister talking about the importance of a rules-based trading system and, frankly, I begin to wonder how those two actions are squared. To me, it sounds as if we are reaching some new low.
Trade is critical to the UK economy so we have to get these deals right, but more is at stake. If the Government set Parliament aside, it will diminish this country and in the end we will all lose.
Viscount Waverley Crossbench 2:23 pm, 8th September 2020
My Lords, this self-styled continuity Trade Bill is a building block. However, in its current form it does not contain all the necessary components. The Bill is also being brought forward in an environment of a moving target, with a degree of despondency over the Brexit endgame process now setting in, not so much because of the exiting itself but because of the manner in which we appear to be doing so. Departure on bad terms would present a Brexit double jeopardy, which is no panacea and certainly not a long-term solution. At some point the UK and the EU must and will enter into a trade deal, but at what cost and when remain in question. My single focus, together with geopolitical positioning and the upholding of British standards, is to assist in making global trade a success. I offer four observations, some good, one not so.
I returned last night from Turkey and have listened carefully to the Minister's remarks on FTA scrutiny. However, I wish to illustrate that country as a positive example. Turkey has all the potential ingredients of a strategic relationship for the UK, one that includes a broad range of sectors and industries, ranging from energy to manufacturing and from banking to services, and includes a large domestic market with large near-neighbourhood possibilities. It is a G20 economy with a large and young population of 82 million. I am also informed that, given our good political relations, we are well-placed to expand trade and investment in both directions. We would, without reservation, be pushing at an open door—exactly the indicators we should be looking for in a global Britain. It would be helpful if the Minister had time to inform us of the status of the FTA discussions.
What is not such good news is that elsewhere—the name of the country itself is not important—a Secretary of State refused to take a Zoom call to explore a relationship with a certain Deputy Prime Minister on multiple attempts, to which there was zero response. It was one where a major British entity is present and, I am sure, would welcome a boost. This, to my mind, is unacceptable. Additionally, Whitehall does not even have the good manners to properly manage that request, so nul points on that one. In a new era of post-Brexit Britain, surely one advantage must be that we remain agile and open.
I shall conclude on two possible initiatives. First, I am instrumental in the formation of a new APPG for chambers of commerce and trade associations. Both sets of multipliers need to be a focus of attention post Brexit to make them more effective. My purpose is to draw attention to their importance and their need to assist in the UK's trading endeavours. The Government must look beyond the narrow confines of Whitehall, build a formal process for engaging with stakeholders and ensure that trade opportunities are distributed equally across our regions, utilising local expertise to close on opportunities. We must be innovative in our approach, ensuring that the UK maintains its position on the global stage and furthering our place as a motivator for business.
Secondly, in a declared initiative to serve the UK's interest, I have developed a trade and network platform for emerging markets, SupplyFinder.com, which provides practical tools and increases bilateral trade with solutions to serve SMEs globally for 224 countries in 14 regions, introduced in eight languages.
I wish the Minister well. There is certainly much to do, and I look forward to the opportunity of engaging on the Bill and other aspects in due course.
Lord Astor of Hever Conservative 2:36 pm, 8th September 2020
My Lords, I welcome my noble friend the Minister to the Dispatch Box for his first Bill and congratulate him on his maiden speech. I agree with him that trade is the best route to prosperity. I wish him well with the Bill and will support him when I can.
I declare an interest as president of the Thai-UK Business Council and as the Prime Minister's trade envoy to Oman. In that role, I am hugely grateful for the outstanding support that I receive from the DIT team in Muscat and here in London. I also pay tribute to the UKEF. Major trade deals often flounder due to a lack of funding but UKEF has been hugely supportive of the work that I have done in Oman.
I think the trade envoy initiative has been a success. I understand that a list of newly appointed trade envoys was due to be announced, and some countries, including Thailand, are waiting impatiently for that announcement. Can the Minister say when that might be? Asia will drive the global economic growth of the future, and the DIT's vision statement for Asia Pacific is
"to support UK business to take advantage of the scale and breadth of opportunity in the region—promoting it as the region with the greatest potential for economic growth."
Thailand has the second-largest economy in south-east Asia, and there are a huge number of export opportunities there for British companies. It really needs a trade envoy from this country as soon as possible.
I welcome the Bill, which introduces sensible provisions to ensure continuity and certainty for British business. I welcome the fact that the Bill will not be used to reduce standards. Our high domestic standards for labour, environmental protection and food safety will continue to apply, and imports from trade partners will continue to be required to meet those standards. None of the continuity agreements erodes any domestic standards of the NHS.
I also welcome the fact that the Bill prevents disruption to UK business and consumers by creating powers to make regulations, if needed, to assist in implementing trade agreements that will transition with existing third-country trade partners. This will help to ensure the continuity of existing trade and investment arrangements across the UK, providing certainty to workers, consumers, businesses and international trading partners.
Lord Adonis Labour 2:39 pm, 8th September 2020
My Lords, I strongly welcome the Minister to the House and I entirely endorse the three principles of good public policy that he set out in his speech: good government, clear thinking and decisiveness. Alas, they entirely refute the trade policy that the Government are following, which does not observe any of these three principles. This is because by far the best trade policy for this country is membership of the European Union, the second best is membership of the single market and customs union and the third best is membership of the customs union with the best deal we can get in terms of access to the single market and services.
The first policy—membership of the European Union—was the policy of every Prime Minister of every party and Government from Harold Macmillan in 1962 through to David Cameron in 2016. The third of those policies—membership of the customs union—was effectively the policy of Theresa May, and we have come to this pass because of the collapse of successive waves of good government, clear thinking and decisiveness.
However, we have to make the best that we can of the dire situation. I will make two comments on the situation in which we currently find ourselves. The first is to do with the wider trade negotiating strategy of the Government with the European Union because, with all due respect to the noble Lord, Lord Astor, it accounts for half of our trade and dwarfs all the other potential trading partners.
If it is true, as reported this week, that the Government are proposing to unilaterally withdraw from the withdrawal agreement and the Northern Ireland protocol that was agreed last year, not only would that be a major issue for the Government in terms of their breach of international law—we have seen that the Government's chief legal adviser has resigned today because he is not prepared to implement that policy—it would also be a very big issue for this House. When the legislation comes to us, we will be invited to agree to a course of action that is, frankly, unconstitutional. It is also a clear breach of the Salisbury convention, which states that, in respect of major, controversial policies, Governments should abide by their election manifestos, and the Conservative Party's manifesto pledged to implement the withdrawal agreement and the Northern Ireland protocol.
Therefore, it is my view, on reading about our present constitutional arrangements, that we should reject outright a Bill that involves Her Majesty's Government abrogating the withdrawal agreement and the Northern Ireland protocol agreed by Boris Johnson last year.
In respect of the wider trade negotiations taking place at the moment, the two key sticking points appear to be fishing and state aid. Obviously, we want the Government to get the best deal they can in terms of fishing quotas. On state aid, the Minister said that he was the private secretary of Nigel Lawson, who would be absolutely aghast at the Government's proposal to cast all current state aid restrictions to the winds so that they can follow a new interventionist industrial policy.
As it happens, I am to the left of the Minister and I actually support a more active industrial policy, but everyone who deals with trade and industry knows that, before you can get to a decent industrial policy, you have to have a stable economic policy, an open trading system, a stable exchange rate and clear, effective and understandable rules for takeovers and acquisitions. All of these are at stake in the Government's Brexit policy and their trade policy in particular. I greatly regret that the Minister's speech did not in any way reconcile the high aims and ambitions he set out at the beginning with the actual policy of Her Majesty's Government.
Lord Oates Liberal Democrat Lords Spokesperson (Energy and Climate Change) 2:44 pm, 8th September 2020
My Lords, I congratulate the Minister on his maiden speech and first time at the Dispatch Box. In the short time available, I will address two issues: first, the critical role that trade agreements can play in tackling the global climate emergency and, secondly, the vital role of effective parliamentary scrutiny in ensuring that trade agreements meet our climate ambitions.
It is not so long ago that Brexiters such as Michael Gove were making lavish pledges about the role that the UK would play in pursuing an ambitious environmental agenda, freed from what they saw as the shackles of the European Union. What a distant memory that all seems now, replaced by the reality of the arch-climate-sceptic Tony Abbott's appointment as trade adviser to the Government. When asked at a speaking event in London last week, his top tip on how to achieve success in trade negotiations was that trade negotiators needed to be encouraged
"not to be held up by things that are not all that important, and not be distracted by things that are not really issues of trade but might be, for argument's sake, issues of the environment."
Contrary to the assertion of the former Australian Prime Minister, the environment is both critically important and a key issue for trade agreements. As the 2019 International Chamber of Commerce report, Climate Change and Trade Agreements: Friends or Foes?, noted:
"If the world is to restrict global warming to 1.5°C, trade must be a central part of the solution… it will be impossible for countries to meet their ambitious Paris Agreement targets without strong and coherent trade and environmental policies."
It is, therefore, very depressing that this Bill has nothing whatever to say on the subject when there is so much that we could be doing.
First, Liberal Democrats believe that we should not seek free trade agreements with any country that is not a signatory to the Paris Agreement. This means that the Government should halt negotiations on a US FTA unless and until there is a US Administration in place who are willing to play their part in combating the global climate emergency. However, given the contempt the Government apparently have for the agreements they have already signed, it may be the United States that decides that concluding an agreement with such an unreliable partner is simply not worth the candle.
Secondly, we should make it a requirement in law that all new trade agreements explicitly enshrine the right of the UK to improve environmental standards and commit parties to binding non-regression clauses.
Thirdly, we need to adopt appropriate and transparent dispute resolution mechanisms to ensure that the UK's right to regulate in the environmental sphere cannot be curtailed in secretive investor-state dispute proceedings.
Lastly, the UK must use its seat at the WTO to reinvigorate the WTO's efforts to pursue climate and environmental goals. In all of this, parliamentary and stakeholder scrutiny of our trade approach will be critical.
Time does not allow me to say much more, so I will conclude by endorsing the comments of other noble Lords about the need for Parliament to have much stronger powers to scrutinise and, if necessary, reject trade agreements. Only then will we be able to ensure that UK trade policy can live up to its environmental ambitions rather than descending into Mr Abbott's environmental abyss.
Lord Risby Conservative 2:47 pm, 8th September 2020
My Lords, it gives me the greatest pleasure to welcome my noble friend Lord Grimstone to today's proceedings, bringing as he does immense experience and a distinguished business career. He will certainly add greatly to the proceedings of your Lordships' House.
The purpose of this Bill arises directly out of our departure from the European Union, but we debate this in the disturbing context of fissures that have developed in international trade, which are potentially very damaging and which all British Governments, over many years, have sought to heal while promoting free trade. Like my noble friend Lord Astor, I have been one of the Prime Minister's trade envoys since the role was introduced. This is part of a genuine attempt to improve our export and investment performance, which is now professionally organised and focused on by the Department for International Trade.
This Bill offers continuity to our businesses and consumers and builds on our excellent bilateral relationships. There are two areas that I will refer to in particular. During the dreadful appearance of Covid-19, we witnessed some unacceptable practices by some other countries. This is why the role of the Trade Remedies Authority has special resonance.
Undercutting subsidies, hidden or otherwise, quite simply harms our domestic businesses. The Government should be commended for the speed at which the TRA is being assembled, and it is encouraging that a third of the staff are now in post, having completed the comprehensive technical training programme. Will my noble friend reassure the House that the Government will continue to prioritise skills development in this important area?
What we have also learned during the past few months is the indispensable and enhanced role of technology. I therefore greatly welcome that HMRC will be able to collect and share trade-related data with the Department for International Trade, leading in turn to information sharing across all government departments—this is a really welcome development. Securing business continuity and countering the strains in global supply chains must be at the heart of our pursuit of a successful and independent trade policy.
I add one thought in conclusion: as the noble Lord alluded to, the WTO needs to be re-energised. It is very important that it plays a central and powerful role in protecting and encouraging free trade. I hope, therefore, that somebody who is very committed to this and has the evidence to show it—namely, the right honourable Liam Fox—secures the role of director-general in the future.
The Bishop of Blackburn Bishop 2:51 pm, 8th September 2020
My Lords, I am extremely grateful for the warmth of the welcome that I have received in my Introduction to your House. When I told my elderly father in 2013 that I had been appointed to serve as the next Bishop of Blackburn, many miles away from his home in Sussex, he was very quiet and somewhat disappointed that my wife and I would be living so far away, but then a light came into his eyes and he asked, "Does that mean you may be invited to enter the House of Lords?" When I replied in the affirmative, he said very quickly, "Well, then, that makes it all right."
I come, first and foremost, as a Christian who will seek opportunity to support the convictions and values foundational to our faith in Jesus Christ, and to draw attention to those many today, around the world, who are persecuted for their faith in him, and then to advocate for the right for all to enjoy freedom of speech and belief, wherever they may live, and to do so in peace.
As my accent betrays, I come also as a southerner, having worked in London, Sussex and Surrey, but for the last seven years in the north-west, serving most of the red-rose county of Lancashire. Lancashire is remarkable for the diversity of its communities and achievements, past and present, boasting that significant role in the cotton industry; a strong connection with Her Majesty the Queen as the Duke of Lancaster; the vision of George Fox on Pendle Hill; the name "sirloin" beef from Hoghton Tower; the annual shield-hanging ceremony in Lancaster Castle, which goes back to Richard the Lionheart; and, of course, the beautiful Trough of Bowland. Lancashire's glory is not just in the past: the north-west is the home of graphene, that new super-material; of the well-known golf course at Lytham St Annes; for some, not so excitingly, of "Strictly Come Dancing" in the iconic ballroom at Blackpool Tower; and of nearly 200 clearly and distinctively Christian Church of England schools and three universities. Also, 18 million tourists visit Blackpool each year for its different attractions.
Yet Blackpool includes one of the most deprived wards in the country, and it is for that fact that I wish to speak in this debate, to urge the Government, if this Bill grants them the powers they seek, to hear and to heed the voice of the north. This House may not be relocated to York during the refurbishment period, but its eyes and ears must not be blind or deaf to the needs of the poorest and most vulnerable communities in the north of our country. Talk of a northern powerhouse must not be allowed to fade away into the history books, but must energise the commitment to improve the infrastructure and economy of the north. Better transport links around the north are long overdue and would have a transformative impact on the local economy.
The impact of Covid-19 has only exacerbated and increased the inequality between rich and poor. Blackburn has an unemployment rate of almost 6%. This is much higher than the national average and, according to a recent Lancashire Telegraph article, it could be as much as 18% when hidden unemployment is included. More than 11% of Blackpool's population is claiming support through welfare payments, the highest proportion in the country. Statistics such as these require the powers granted by the Bill to be exercised with wisdom and skill, as new trade agreements are put in place for the post-Brexit era.
As the Bishop of Blackburn, I hope to speak in this House for the great people of the north of our country and, as a Christian, to speak for the human right to believe and express that belief in public without fear or favour. Good trade arrangements can be a way to achieve prosperity for all, as has been indicated already in this debate, as well as to develop relationships with our global partners which will allow us to act as a critical friend when human rights are ignored. I hope the Bill will assist us in both these noble goals.
Lord Alton of Liverpool Crossbench 2:55 pm, 8th September 2020
My Lords, the House has heard a thoughtful and exemplary maiden speech from the right reverend Prelate the Bishop of Blackburn. All of us who, since his appointment in 2013, have witnessed his outstanding pastoral work in the north-west of England will not be surprised by that. Rooted firmly in the evangelical tradition of Wilberforce and Shaftesbury, he and his wife Heather have, with great commitment, actively engaged with the region's social and spiritual challenges. On appointment to his vibrant and diverse diocese, he pledged himself to promote respect for people from differing faiths and the right of all to freedom of religion or belief. In a part of the country that often feels overlooked by institutions, by elites and by government, he has said that his experiences in Lancashire, on a wide variety of issues, will inform his contributions to your Lordships' House. On the basis of today's curtain-raising maiden speech, those are contributions to which we will look forward with great anticipation.
I want to talk briefly about national resilience and our human rights obligations in future trade deals. Following exchanges and a meeting with the noble Lord, Lord Grimstone, whom I also congratulate on his maiden speech today, I gave him the Henry Jackson Society report Breaking the China Supply Chain. That report finds that in 229 separate categories of goods, the UK is strategically dependent upon China for our supplies. Equally troubling is that 57 of these categories involve critical national infrastructure, including computers, technology, telephones, antibiotics, painkillers such as aspirin, anti-viral medicines, PPE and industrial chemicals. It recommends that we conduct a national review of the industries dependent on China; make reducing dependency on China—and, indeed, other human-rights-abusing states—an aim of new trade deals; and campaign for the withdrawal of China's "developing nation" status at the WTO. We must move the United Kingdom away from a position in which its economic dependency can be weaponised to discourage the UK from championing human rights or the rules-based order, which the Minister referred to in his speech.
Concerns, and the need for concerted action by liberal democracies, have only grown stronger following the way in which the Chinese Communist Party has tried to deploy economic coercion against Australia following its calls for an inquiry into the origins of Covid-19. What is the Minister's view about a comprehensive review of national resilience? And what of human rights? In 2015, the UK enacted the Modern Slavery Act; yet over recent months, we have seen reports suggesting that many UK-based and UK trading brands are benefiting from the forced labour of Uighur Muslim communities in China. A recent report by the Australian Strategic Policy Institute estimates that some 80,000 Uighurs are working in factories in the supply chains of at least 82 well-known global brands in the technology, clothing and automotive sectors, including Apple, BMW, Gap, Huawei, Nike, Samsung, Sony and Volkswagen. Some of the same companies also turn a blind eye to the use of child labour in lethal conditions in Congolese mines.
Cross-departmental action is needed. If the Bill were amended to incorporate concerns about egregious violations of human rights—something I know is close to the heart of the Opposition Front-Bench spokesman—as I suggested in a letter to the noble Lord and to Ministers involved with telecommunications Bills, it would address the matters raised by Members of both Houses; not least by those who, like the noble Lord, Lord Stevenson, supported my amendment to the Telecommunications Infrastructure (Leasehold Property) Bill. I hope we will return to these questions at a later stage of the Bill.
Lord Bruce of Bennachie Liberal Democrat Lords Spokesperson (Scotland) 3:00 pm, 8th September 2020
My Lords, I also congratulate the Minister and the right reverend Prelate on their maiden speeches. I am sure we all look forward to hearing their future contributions.
However, I am sorry to say that, in this Bill, I believe parliamentary democracy and our trade interests have parted company. For more than 40 years, Britain's trade arrangements have been negotiated by the EU, with the detail subject to scrutiny by the European Parliament. Now the Government wish to negotiate trade deals in secret and ratify them without reference to any of our democratic institutions, using the powers of an absolute monarchy.
The UK is launching itself on the world with no track record of negotiating modern trade deals and, worse than that, from yesterday's announcement it appears that the Government think they can unilaterally rewrite signed treaties and expect to be trusted as they try to negotiate new ones. However, congressional leaders have already indicated that they will block any free trade negotiations with the UK if the Good Friday agreement is undermined, as the Government's position would certainly achieve.
Britain has a consistent balance of payments deficit on manufacturing, which even a substantial surplus on services cannot close. Yet we are giving up our privileged access to the EU market for services, knowing that free trade deals generally do not cover services. The Government seek a trade deal with the US, knowing that the EU could not achieve one, when we are in the middle of a damaging trade dispute that is seriously undermining our Scotch whisky industry.
A President who puts America first will extract a high price for access to EU markets. Jacob Rees-Mogg has boasted many times that Brexit will deliver cheap food, but we know that this will be of a lower standard than the UK currently enjoys, in spite of the Minister's assertions. Maybe the US will play whisky against beef, poultry and even our NHS. The threat to Scotch shortbread and cashmere saw Tory MP Douglas Ross writing in our local paper of the damage it was doing to his constituents, but that was, of course, before he suddenly became leader of the Scottish Tories. The failure of the Trade Secretary to end the damaging whisky war does not bode well for our negotiating power.
Scotland has the biggest financial services sector outside London, and a significant part of that is focused on dealing with the EU. Replacing that will not be easy, and non-EU markets will not be as easily replicated. The economic balance varies across the components of the UK; concessions on trade agreements will therefore have different impacts. Big companies can adapt to changes on terms of trade by takeover, relocation or disinvestment. Small and medium-sized enterprises do not always have such luxury.
Under the Government's trade plans, people may not know the impact of any trade deals until after the event. That is why our Parliament should be involved in agreeing the terms of trade. If the European Parliament, the US Congress and other national Parliaments can scrutinise trade deals, why not us? Is this not what "taking back control" was supposed to mean? Or was it always going to be a cabal and cosy clique of the Brexit faithful? Is there anyone left in the Tory party, apart possibly from Jonathan Djanogly in the Commons, willing to speak up for parliamentary democracy? I believe our House owes it to them to give them another chance.
Lord Balfe Conservative 3:03 pm, 8th September 2020
I also congratulate the Minister and the right reverend Prelate on their maiden speeches, which gave us a taste of what is to come—something we can look forward to, I think.
Like some noble Lords, I am sorry that we need this Bill at all. Our trading arrangements have been well looked after by the system we have followed for the last 40-plus years. As someone who has had a little to do with the European Union, I reflect that there is much higher democratic oversight by the European institutions of the trade agreements as they are negotiated, and a far greater opportunity for the European Parliament to intervene, approve and—crucially—amend and deal with these things as they are negotiated.
One of the weaknesses of the Constitutional Reform and Governance Act is that it was not passed for this purpose. It was passed at a time when withdrawal was not even on the distant agenda, and it is not fit for purpose for what we want to do. The time limit of 21 days is frankly not only woefully inadequate but the wrong way of going about things. Parliament should be involved as treaties develop, not presented with them at the end.
If you read the Government response to the reports we debated yesterday in Grand Committee, you will see the number of times that the Government said that they "may" take account and "could" envisage looking at—but there were no firm commitments to Parliament at all. Of course, we also have four bodies of Parliament—the International Trade Committee, the Joint Committee on Human Rights, the Constitution Committee and our own EU Committee—all of which have severe reservations about this procedure. We are not in a good place.
When we talk about Australia and the United States, people have said that the Government of Australia have stronger powers, but they are much more beholden to what is called the trade committee of the Australian Parliament. We have no equivalent of this committee. Robert Lighthizer wants us to follow the science, as he says, but the United States Senate and the House of Representatives do not follow the science; they follow the democratic wishes of their constituents, and good for them. We need to look a lot more firmly at what we are dealing with.
Finally, I shall say a word about the National Health Service. I do not go along with the shroud-wavers who say we are going to have a US system. I have said many times, "Of course we're not", because the Conservative Party relies on the votes of the aged. However, we must have structures in place which do not let investor protection and dispute resolution procedures override the democratic will. We cannot have NHS price control mechanisms undermined. We need a clear defence of the NHS and, frankly, we need it in the Bill. I challenge the Minister to bring something forward that will achieve that objective.
Baroness Boycott Crossbench 3:07 pm, 8th September 2020
My Lords, it is always a pleasure to hear two maiden speeches. I particularly appreciate the speech from the right reverend Prelate, who pointed out the yawning gaps of inequality of this country.
Trade affects us all, and I believe the Government will be taken aback by the power of public opinion in the next few months, as campaigns are unleashed in which people say that they do care about what they buy and where it comes from. As a nation we import a great deal—several billion pounds more each month than we export. Therefore, what we buy in the shops is down to all of us, and we care about it.
I appreciate that it is important to have as many agreements as possible in place by the end of the year, but it is crucial that these do not result in an increase in our global emissions. We face a particular risk here as the biggest net importer of CO2 emissions per capita in the G7—it makes up 43% of our emissions. If we are to reach net zero, we have to do more than just think about it. We must take active steps; we cannot load other people with this problem. As has been noted, the appointment of Tony Abbott to his job is not a good sign in this direction.
I welcome the announcement the other day by the noble Lord, Lord Goldsmith, of a review of diligence in terms of deforestation; this is a good thing. The lungs of our planet have been considered fair game by us all for a long time—a free for everybody type of parking space. However, this due diligence needs to extend to a full sustainability impact assessment across all international agreements. If we can do that, the points mentioned by my noble friend Lord Alton would also get picked up by Parliament.
Only with a sustainability impact assessment will Parliament be able sufficiently to scrutinise trade deals against our current obligations made under the Paris Agreement and the Climate Change Act. These are not notes on the back of a postcard; they are agreements to which we have signed up. We have to do this; we cannot fudge around. SIAs will also create really good incentives for countries that wish to trade with us, so that they too stop turning a blind eye to production methods directly and indirectly accountable for high emission levels.
If we have good SIAs, we would be able to incentivise all carbon-neutral trade through tariff systems which recognised these benefits. We all know that, in the long term, low-carbon products work out cheaper. They are cheaper financially, and they are cheaper and better for all of us.
To quote a recent report by the Aldersgate Group:
"Long term certainty that the UK's trade policy will be coherent with the net zero emissions target" is essential to attract private investment. That is true, and this is our golden opportunity to do it.
We led the world in the Industrial Revolution, and we must lead the world in this green revolution. It is not just that our children will love us for it—they will hate us if we do not.
Baroness Quin Labour 3:10 pm, 8th September 2020
I congratulate the Minister on his appointment and on his willingness to take on—and even bravery in taking on—such a role at this time. The details of the Bill will be considered at a later stage, but I agree with the overall assessment of my noble friend Lord Stevenson that this is not a simple continuity Bill; it raises many important matters that should be the subject of amendments. I also agree with others who expressed concern about the Government's overall trade policy priorities. There is a lot of confusion about the Government's intentions in their trade policy. Recently, Michael Gove visited Northern Ireland and said, "You are having the best of both worlds because you have access to the EU single market as well as the UK's internal market". We could all benefit from access to the EU single market if the Government simply changed their approach to their trade policy. There are huge issues of concern to Northern Ireland and it will be desperately important both politically and economically that these get resolved properly.
The Government have also been criticised by the Road Haulage Association for inadequate preparation. It is extremely worried and alarmed at the prospect of no deal—unlike the noble Lord, Lord Frost, who was introduced today. In response, the Transport Secretary, Grant Shapps said, "Well, we've dealt very well with the supply chain during the Covid crisis, so there won't be any problem in future". However, at the moment we are still in the EU and benefiting from those trade flows and supply chains.
The Government have talked a lot about sovereignty, and it is true that we will be a sovereign country, able to do trade deals. In any trade deal, however, there are two sovereign partners, so there must be respect and a willingness to compromise in the overall interests. I am worried by the false patriotism in the Government's approach; it is acting against our true interests, which is to have a close trading relationship with our biggest market and nearest neighbours—a market, incidentally, we had a key role in creating and the rules of which we have hugely influenced in recent years.
I would like the Government to rethink this Bill and their trade policy, before this country has to pay an unacceptable price, both economic and political.
Lord Clement-Jones Liberal Democrat Lords Spokesperson (Digital) 3:13 pm, 8th September 2020
My Lords, I add my own welcome and congratulations to the Minister and to the right reverend Prelate. I share all the concerns expressed by my noble friends and many noble Lords about the lack of proper scrutiny provisions in this Bill. Global digital trade is increasingly important in the post-Covid world. Its rules must be established, however, through bilateral and multilateral trade agreements.
Two areas where special scrutiny is required, particularly their place in the global digital and creative economy, are intellectual property protection and data transfer. It is crucial in future FTA's negotiated by the UK that we do not concede or dilute our IP standards as part of trade negotiations. Indeed, they should be enhanced. These core protections include—it is quite a list—adherence to international treaties related to copyright, trademark, design and other intellectual property rights by our trading partners; maintenance of the UK's "no fault" injunctive relief powers; robust enforcement measures for IP rights and infringement; strong design rights, particularly regarding unregistered designs; balanced copyright exceptions that uphold standards such as the Berne three-step test; no broadening of any liability shields for online platforms; retention of sovereignty over exhaustion rights and no shift to an international exhaustion regime; retention of artist resell rights; reciprocal rights of representation; reciprocal public performance rights for all music rights holders for their works, recordings, public performances and broadcasts; no mandatory transfer of source codes, algorithms or encryption keys as a condition of market access; and support for the development of AI through aligning text and data-mining rules with our own.
On the second major issue, data transfer, we need to ensure that data can flow across borders. It is essential for digital trade, particularly e-commerce, supply chains, data collection and data analytics through the Cloud. We have discussed the need for data adequacy in this House many times. In a significant ruling last month, in the case of Schrems II the European Court of Justice ruled that the privacy shield framework which allows data transfers between the US, the UK and the EU was invalid. Cloud services and data exporters from the EU will have to rely on standard contractual clauses. The UK will need to develop its own regime, similar to the EU's adequacy framework, to ensure that personal data transfers to third countries outside the EU are protected, in line with the principles of the GDPR. We also need to ensure there is no enforced localisation of data or separate treatment for cross-border flows of financial data, as the Minister will understand only too well.
I look forward to the Minister's response on these issues and how scrutiny will be guaranteed in the future.
Lord Wigley Plaid Cymru 3:17 pm, 8th September 2020
My Lords, I salute the noble Lord, Lord Clement-Jones, in covering so many issues so quickly, and I congratulate the Minister and the right reverend Prelate the Bishop of Blackburn on their maiden speeches.
After 40 years of leaving trade negotiations to the European Commission, the UK Government are now discovering that trade is an emotive and difficult subject which depends on defined interests, respect and enforceability. All three elements require consent, most obviously delivered through our democratic institutions. The Welsh Parliament is responsible for articulating Wales's interests, supporting its economy and enforcing its laws, yet this Trade Bill largely ignores these responsibilities, as if devolution never happened. The UK Government require the Welsh and Scottish Governments to enforce trade deals decided in secret which they had no part in formulating. All four nations must surely be required to consent to trade deals struck in their names. Such deals must be subject to parliamentary approval in Cardiff, Edinburgh, and Belfast, as well as Westminster.
Trade is the life blood of the Welsh economy, worth £18 billion last year. While Wales is a proud global partner, the fact is that over 60% of our exports goes to the EU. Welsh food and drink exports were directly worth over £530 million in 2018, without adding any economic multiplier. This underpins Wales's rural economy, and agriculture is a devolved competence of the Welsh Parliament. It is therefore vital that food production standards are enshrined in legislation and in any trade deals that follow, and that this is safeguarded by the necessary consent of all four Parliaments.
While I welcome the Trade and Agriculture Commission, giving it a six-month remit was farcical; it should be permanent. If we are to secure trade agreements to replace the European markets we now stand to lose, the Government must work for, and with, all four nations of these islands, not just the City of London. They must guarantee the democratic rights of each nation, provide legal protections for our public services, including the NHS, and make binding commitments to maintain standards. We must reform the investor-state dispute mechanism, not least to deal with the global socioeconomic consequences of Covid-19. I welcome the moves by the European Commission to consider a new multilateral investment court to replace the flawed ISD system. I hope the UK Government will engage positively with that proposal.
We now face a no-deal Brexit, which the Prime Minister sees as a good outcome. However, he would never have secured his general election majority on that basis. Last year, MPs voted to reject a no-deal Brexit in any circumstances. The original trade Bill assumed that we would get a deal. The Government are now prepared to renege on the international treaty they signed on Northern Ireland. Is Britain's word worth nothing? The Bill should not pass until the Government have made fully transparent their plans for further trade legislation relating to Northern Ireland, have clarified how that Bill might impact on the Trade Bill, and have committed to working in partnership with the Parliaments of all four nations of these islands.
Baroness Altmann Conservative 3:20 pm, 8th September 2020
My Lords, I warmly welcome my noble friend to his position on the Front Bench and commend him on his maiden speech to the House. We very much look forward to his contributions to the House. Equally, I welcome the excellent maiden speech of the right reverend Prelate the Bishop of Blackburn.
The Bill is about trade agreements. They influence the standards, protections and regulations that shape the kind of society we live in, which is why it is so important for Parliament to have a greater say than is provided for currently. Publishing objectives, keeping Parliament updated and allowing Parliament to block treaties are not the kinds of powers that the British people would expect us to exercise over issues that are so fundamental to the type of country in which we live.
I support the setting up of the Trade Remedies Authority to protect businesses against others who break the rules—which brings me to the issue of rules. I hear my noble friend talk about our high standards on the environment, workers' rights, human rights and so on, but successful international co-operation surely requires compromise and the acceptance of others' standards, too. However, so far, it seems that the Government believe that only our own rules count. That way lies conflict. Posturing, threatening or bluffing are not normally the way to achieve successful outcomes in an international sphere.
My noble friend outlined objectives that I fully support: maximising the economic benefits of trade, especially for small businesses; reducing exposure to economic shocks; defending our national interests; and continuity and certainty. To be frank, as an economist, I still struggle to understand how leaving behind the free trade we have as an EU member can possibly maximise the benefits of trade. Brexit is about politics, not business or trade, but I am delighted that we have agreed 20 continuity arrangements for those deals that we already enjoyed as an EU member. Could my noble friend let the House know how we are progressing with future arrangements with countries such as Canada, Singapore and Turkey, which have not yet been ratified?
I echo the concerns about the NHS and standards, and look forward to debating the Bill further as we go through its process.
Lord Whitty Labour 3:23 pm, 8th September 2020
My Lords, I welcome the Minister to his place in the House. I also welcome his maiden speech and that of the right reverend Prelate the Bishop of Blackburn, who gave a rather more convincing advertisement for Lancashire than the Minister did for the Bill.
I recognise that, in the circumstances, some of the Bill is necessary, but it is largely defined by what it omits, starting with parliamentary scrutiny. Yesterday, we were pressing for at least the equivalent scrutiny given to all treaties, particularly trade treaties, by the European Parliament—as the noble Lord, Lord Balfe, has just explained. But the new Bill omits much more than constitutional issues and parliamentary scrutiny. There are, in effect, no provisions for the protection of our food standards, which means that future trade deals could undermine the high standards of UK agriculture and the health of our nation and animal population.
There are other provisions that ought to be part of our approach to trade in the new circumstances. There are no provisions on employment standards—not even commitments to basic ILO conventions on workers' rights or even protections against slavery. No consideration of basic human rights is included at all, yet it is in many extant EU trade agreements. We have to recognise that some of the countries that the Government are targeting for future trade agreements, such as China or Brazil, have regimes whose contempt for human rights and environmental protection is blatant. Ministers will of course say that the Bill relates only to continuity agreements, but even in that context some of the arrangements with the EU also raise issues of human rights—take the case of Turkey as an example. The Bill is not just a continuity Bill; it sets the tone for our approach to trade much more widely.
We know that the big prize for the more extreme Brexiteers is a trade agreement with Trump's America. Frankly, that prospect raises deep anxieties about food standards, animal welfare and US pharma companies' ambitions for the National Health Service market and the provision of healthcare. The Bill will protect us from none of that.
I hope that the Minister listens to the House and tells his colleagues that at least some of these provisions need to be introduced to the Bill before it ends its process through Parliament.
Lord Bilimoria Crossbench 3:26 pm, 8th September 2020
My Lords, the UK is one of the greatest trading nations in the world. It is an open economy and one of the largest recipients of inward investment, often in the top two in the world. The Bill is extremely important to maintain that. First, I welcome my noble friend Lord Grimstone. We have known each other for many years, and I congratulate him on his excellent maiden speech.
There are those who wish that the Bill had been wider in scope and said more about trade strategy, linking to other policy areas and to sustainability, with maybe more consultation. On the other hand, we recognise that time is limited and that there is more work to be done. It is essential that trade defence measures are in place and that we are in a position to roll over a trade deal.
I am president of the CBI and our members have expressed concerns around the scope of the NDAs, which seems to go far wider than just texts for negotiating—perhaps the Minister could comment on that. There are also concerns about the restrictions on sharing information outside the UK, the length of application, and obligations for organisations to ask for confidentiality clauses with employees. On rollover and replicate, the issue is not the Bill but the real-world challenge of negotiating trade agreements—these still have to be negotiated. The DIT has negotiated a number of trade deals—I believe up to 20 now—but some still need to be completed.
Then there is the aspect of business involvement. There should be more explicit language about consultation. While the Government have been keen to roll over some trade deals, in some cases rolling over is difficult; for example, in matching EU deals. Would the Minister comment on a country such as Switzerland, for example? Business basically wants continuity of trade; we do not want a cliff edge, in any way. So far as the Bill does that, we wholeheartedly support it.
We welcome the setting up of the Trade Remedies Authority. The role of business is to submit benefits of experience and to have an integrated view. Will the manufacturing sector and others be represented on the TRA to build confidence and widen the circle of expertise?
We can make international comparators. Many countries, such as Australia and the United States, give clearly defined roles to their legislatures as part of the process of negotiating and concluding treaties, whereas the UK Parliament provides nothing near that.
The CBI has developed 10 recommendations on how to build a world-leading UK trade policy: build a strong mandate underpinned by business engagement; secure comprehensive buy-in for the negotiations by publishing mandates; set up a high-level Strategic EU Trade Advisory Group (SETAG); establish a series of thematic working groups to tackle cross-cutting issues; expand the remit of ETAGs; appoint a new chief business trade envoy to co-ordinate the gathering of business intelligence, ensure coherence of policy, and provide businesses with a single point of contact; take business delegations to negotiating rounds to strengthen the UK's presence and give negotiators easy access to technical expertise; publish proactively the membership of advisory groups; release summaries of negotiating rounds as they are completed; and use non-disclosure agreements only when essential.
Lord Shipley Liberal Democrat 3:30 pm, 8th September 2020
My Lords, I welcome both maiden speeches this afternoon. I understand the need for the Bill to ensure the proper functioning of the Government's procurement, to enable the rollover of EU trade agreements and to allow HMRC to have access to detailed trade data. I understand too the reasons for the new Trade Remedies Authority to advise on the conduct of international disputes and unfair trading. However, the Bill cannot just be technical. What is in the Bill and what is missing from it will be highly relevant to our consideration as it progresses. This should include food standards for imported agricultural goods and the exclusion of publicly funded health and care services from trade agreements. It should also include issues related to climate change and regulatory co-operation, and ethical considerations related to third countries.
I hope the Minister will clarify three specific issues. First, our Parliament should surely have the power to agree the Government's negotiating objectives in any new trade agreement. It should also have the same statutory powers as exist in many other countries to scrutinise and ratify a finalised agreement. Secondly, there is also a need for better scrutiny of the Trade Remedies Authority. There seems to be a lack of accountability to Parliament in its structure and functions. At the very least, it should report annually to Parliament. Thirdly, could the Minister explain, in the context of the Agreement on Government Procurement, how it fits with the Government's plans to enhance state aid within the UK and for the Government's levelling up agenda, which will require very substantial public investment? What consideration have the Government given to areas of potential conflict in procurement?
Finally, do the Government accept the need to honour geographical indicators in future trade agreements? I ask because, in their agreement with the EU, the Government have rightly committed themselves to them "unless and until" there is a new trade agreement in place. But, if there is no trade agreement with the EU, we must continue to honour geographical indicators, which, in itself, is good news. But what discussions have there been with US negotiators on this matter, since it appears that they do not wish to be bound by them? Will we continue to honour our current agreements on geographical indicators, or will the Government give priority to securing a US trade agreement?
Lord Naseby Conservative 3:33 pm, 8th September 2020
My Lords, we have heard two excellent maiden speeches this afternoon, from my noble friend on the Front Bench and from the right reverend Prelate the Bishop of Blackburn. I thank them both; they were very moving and very effective. Of course, that is not surprising, when this is the most vital Bill that this country has faced for many a long year. It is all about the sovereignty of the United Kingdom.
I had the privilege of working for the Reckitt & Colman (Overseas) group for a fair number of years, in Calcutta, where I covered the whole of eastern India, and in Colombo, which was of course then Ceylon, trying to learn the language—I got O-level Hindi. I did it in depth. If you are going to export, you have to do it in depth. Subsequently, I became a director of one of the largest advertising agencies, responsible in particular for clients who were involved in exporting.
I look at the list of countries in the continuation agreement area, and I am sorry to say that I do not see much of the Commonwealth. I see discussions on Singapore, but that is almost about it apart from part of the Caribbean. I therefore say to my noble friend on the Front Bench—I declare an interest as president of the All-Party Parliamentary Group on Sri Lanka and as active in all the south Asian countries—that that area is hugely friendly to our country. They want to be involved. I say that as one who goes regularly every year, as far as I can, to that part of the world. They are anxious to enter into agreements. I suggest to my noble friend on the Front Bench that we have to have very senior people in our embassies and in our high commissions who are well briefed on what the opportunities are and who can see the possible opportunities. For my money, I would like to see the deputy high commissioner or the deputy diplomat in those and other countries being appointed from senior businesspeople.
As someone who has been in the world of advertising and marketing, I know that the promotion of exports is not new. In the old days, we used to have the British National Export Council, then the British Export Corporation, which was talked about, with, potentially, an international exhibition centre at London airport.
The mention of London airport brings up two issues: the air freight and airline business is absolutely paralysed at the moment, and somehow or other we must ensure that the structure is kept there and that the third runway gets built.
On marketing, I say to my noble friend on the Front Bench that the Queen's Awards for Enterprise are pretty tired. They need a complete revamp. On trade associations, the noble Viscount, Lord Waverley, talked of an all-party parliamentary group, and I would be more than happy to join it.
I am disappointed that there appears to be a row between Her Majesty's Government and the UK Association for International Trade, or in particular with HMRC. We do not need this at this point in time, and I suggest that my noble friend bangs a few heads together.
My noble friend and others will get support from ECGD, the Road Haulage Association, and so on. However, we also need our universities on side. We need to know that the young people coming forward really understand the importance of exporting and the interaction between people. On the question of interaction, much needs to be done. There needs to be much of it, and, frankly, we cannot afford for officials to be sitting at home, having very little interaction.
Lord Berkeley Labour 3:37 pm, 8th September 2020
My Lords, I am grateful for the opportunity to introduce the House in this debate to the Luxembourg Rail Protocol, which needs a minor amendment to the Trade Bill. It would enable the Government to move forward with ratification, which would help rail operators and manufacturers encourage foreign investment into the UK and support UK exports of rail equipment. It mirrors something which has existed for some years in the air sector, and it is caused by a problem of getting finance for things that move and can be taken away.
To introduce it very quickly, the Luxembourg Rail Protocol to the Cape Town convention is an international treaty which will make it easier and cheaper for the private sector to finance all types of railway rolling stock, from locomotives to passenger and freight wagons, metro trains and trams, and so on. I believe from earlier discussions that it has government and cross-party support, and it needs a statutory instrument, as long as that is authorised by primary legislation. The protocol to the Cape Town convention creates a new global system for protecting and prioritising creditor rights in relation to secured financing or leasing of all types of rolling stock. This includes a facility to register security interests in an international registry, and it is the first common global system for uniquely identifying rail equipment. As noble Lords will know, rail equipment, like aircraft, has a habit of being moved if it is in the owner's interest to do so.
It reduces creditor risk, the legal cost of financing and the cost of capital, and will relieve central and local government of the burden of financing or underwriting the procurement of new rail equipment. It will also provide the opportunity for government to refinance cost-effectively existing equipment. Of course, for exporters of rail equipment, which we hope will continue and grow after Brexit, the treaty will make manufacturers more competitive, particularly by levelling the playing field against Chinese competition, which many industries fear quite a lot. It will create valuable new markets and facilitate lower risks.
As I said, the UK has already adopted the Cape Town convention's protocol applying to aircraft. It has signed but not ratified the rail protocol. Post Covid, this is all very important, so I propose to put down a few small amendments to Clause 2 to allow this convention to be ratified within the wider definition of the implementation of international trade agreements.
Baroness Burt of Solihull Liberal Democrat 3:40 pm, 8th September 2020
My Lords, I commend the maiden speeches of the right reverend Prelate the Bishop of Blackburn and the Minister—particularly his remarks on small businesses, because that is the focus of my brief remarks today.
I am glad the Government have confirmed our accession to become independent members of the WTO's Agreement on Government Procurement. This can be of great benefit to SMEs. Opportunities covered by the GPA market are estimated to be worth £1.3 trillion per year across the 20 parties to the agreement. The United States, South Korea and Japan have all put annexes to their GPA schedules to allow them to set aside and disapply regulations on behalf of small businesses and other organisations. I believe these provisions would enable parity of support for small businesses in accessing markets, against larger ones. Can the Minister confirm that the Bill has this provision and, if not, whether he would be open to considering an amendment to incorporate it in the Bill?
The Bill sets up the trade remedies authority, designed to protect UK businesses from unfair trading practices. This looks like a good thing, but when will we have further details, particularly on the TRA's governance structure and accountability?
Key to small businesses' exporting success is financial assistance, which should be obtainable through UK Export Finance—but UKEF is currently subject to inquiry from the Commons International Trade Committee. Could the Bill be used as an opportunity to lay out some of the UK's future trade structures to make UKEF more accessible, user-friendly and, frankly, fit for purpose?
Small businesses will play an important role in the UK economic recovery post Covid. They are more agile and faster to market with new products and services in an uncertain world. The FSB reports that 78% of its exporting members export outside the EU, although this represents only just over one in five of its membership. The potential is there for the number of small business exporters to double.
Finally, what could the Government do through this Bill to make the prospect of exporting more appealing and seem more possible to small businesses by encouraging them and simplifying the process?
Baroness Neville-Rolfe Conservative 3:43 pm, 8th September 2020
My Lords, it is exciting to be on the speakers' list twice—once physically and once virtually—but I will trouble noble Lords with my thoughts only once. I start by giving a warm welcome to the right reverend Prelate the Bishop of Blackburn. I was glad to hear him mention the contrasting miracles of graphene and "Strictly Come Dancing". He will be a great addition to our House.
This Bill is not very different from the Bill introduced in this House in 2018 on which I spoke at some length. It provides for the continuity of EU trade agreements where possible on a bilateral basis and sets up the UK-only arrangements for procurement and an independent trade remedies authority. Not much has changed, although some of the Lords amendments have been stripped out.
However, the context is very different. Boris Johnson has become Prime Minister—a welcome change—and won a decisive election victory. We have left the EU and the nature of any FTA with the EU makes our international trading arrangements even more important. Continuity arrangements have been agreed and scrutinised effectively by the EU Committee of this House. We have produced 22 reports on 50 different Brexit-related agreements, and I thank our brilliant clerks.
Trade negotiations with Japan, Australia, New Zealand and the US are very active and the Department for International Trade has been strengthened enormously, most recently with the addition of former Australian Prime Minister Tony Abbott, whom I had the pleasure of meeting on an earlier visit to the UK. I am now chairman of the UK-ASEAN Business Council—one of my interests in the register—and can assure noble Lords that in the ASEAN region, which is dynamic and growing, he is well regarded for the important trade agreements he concluded in Asia.
We have also welcomed my noble friend the Minister, with his global business experience, to his role, and at last today we heard his maiden speech. He has an amazing record and network, but for me the most important qualities he highlighted were clear thinking and decisiveness. These should be much valued in our Government today.
I welcome the return of this Bill and the Minister's clear introduction and look forward to supporting its rapid passage through our House. I have a particular interest in data and intellectual property and thank the Alliance for IP for its usual briefing. I know that these areas are important to the noble Lords, Lord Stevenson and Lord Clement-Jones, and I look forward to working with them on the usual cross-party basis.
I sympathise with many of the points made about parliamentary scrutiny and hope to bring to our debates my experience on trade issues within the EU in the European Parliament and on the European Union Committee. I also endorse everything my noble friend Lord Naseby said, his practical ideas on export promotion and the intriguing ideas of the noble Lord, Lord Berkeley, on rail rolling stock. Like the noble Baroness, Lady Burt of Solihull, I care a lot about the role of small business in trade.
Lord Duncan of Springbank Deputy Chairman of Committees
The next speaker is the noble Lord, Lord Freyberg. I am sorry but we cannot hear him at all. We may have to move on to the next speaker and return to the noble Lord, Lord Freyberg, afterwards. I call the next speaker, the noble Baroness, Lady Chakrabarti.
Baroness Chakrabarti Labour 3:48 pm, 8th September 2020
My Lords, I believe I am unmuted. What an excellent debate. I join the welcome from across the House to the Minister and the right reverend Prelate the Bishop of Blackburn.
The Bill in its current form is at best a missed opportunity and at worst something a little more troubling still. It is a missed opportunity to safeguard parliamentary sovereignty and respect for devolution and for detailed scrutiny of trade policy. As others have said, it provides a lack of structures for that purpose. I also draw your Lordships' attention to the sweeping delegated powers that are a key feature of this legislation, to which I really hope many noble Lords will return at future stages.
It is a missed opportunity to prioritise human rights, workers' rights, food standards and, in particular, the fight against impending climate catastrophe as pillars of ethical trade policy in the vital years ahead. In its current form, it is a missed opportunity to enshrine protections for the world-envied treasure that is our National Health Service, watched in admiration by ordinary vulnerable people everywhere and especially during this current terrible pandemic—yet stalked greedily by many corporate interests that would seek to plunder its sensitive datasets and commoditise the healthcare that, in Britain at least, has been seen as a universal human right for 72 years.
The Government say—the Minister said it very ably—that this is just continuity legislation, so we need not seek extensive safeguards here. No doubt we will in due course be asked time and again to trust the Executive and their new personnel. But the likes of Mr Tony Abbott, with his expressed views and values, are on the way in to this Administration at just the time when the likes of Sir Jonathan Jones, head of the government legal department, appear to be on their way out. In the light of all this, I really hope that, following this passionate, expert and visionary debate, your Lordships' House will feel confident to approach the Bill's future stages with muscular scrutiny and confident amendment, especially in relation to rule of law issues.
Baroness Sheehan Liberal Democrat Lords Spokesperson (International Development) 3:51 pm, 8th September 2020
My Lords, I start by welcoming the maiden speeches of the Minister and the right reverend Prelate the Bishop of Blackburn, whose focus on inequality is very welcome. The Secretary of State for the Foreign, Commonwealth and Development Office has stated:
"With democracy and human rights as the central principle of the FCDO mission, we can bring together the UK's values, its global mission, and its responsibilities as a world-beating international development institution."
Those are fine words indeed, but they would have greater force if underpinned by the opportunity presented by the Bill, but that has not happened. Not only that, but Parliament's role to set objectives, scrutinise deals and evaluate the impact on fundamentals, such as public well-being, climate requirements, human rights and international development, has been diminished. The second time around for the Trade Bill means that some of the essential safeguards won last time may be lost, given the Government's majority. However, this House has a responsibility to uphold parliamentary sovereignty, and I will support amendments that seek to do so. To date, we have had nothing but promises from Boris Johnson to protect us from the vagaries of countries such as the US or Brazil while they are led by men whose principles and values we do not share.
I move on to the dual challenges of climate chaos and Covid-19. Some 50% of the UK's carbon footprint appears elsewhere in the world. The Bill is an opportunity to do more to invest in green trade and use Aid for Trade support to help developing countries transition into renewables. The upcoming leadership of COP 26 gives us a real opportunity to lead on fossil fuel subsidy reform, starting with the UKEF. In 2019, the Environmental Audit Committee stated that UK Export Finance supported fossil fuel projects to the tune of £2.6 billion over the previous five years, the vast bulk of it going to low and middle-income countries, compared with just £104 million for renewable energy. It is not enough to stop subsidies for coal production. The parlous state of planetary ecosystems dictates that subsidies for oil and gas should also be consigned to history.
I end by speaking about equitable access to treatments and vaccines for Covid-19 for the developing world. Jeremy Farrar, the director of Wellcome, has said:
"For as long as COVID-19 is present somewhere, it is a threat everywhere … Governments, industry and philanthropy must pool resources to pay for the risk, the research, manufacturing and distribution."
A recent YouGov poll commissioned by Wellcome found that most people think that Covid-19 treatments and vaccines should first be made available to those who need them the most, wherever in the world that need is greatest. Does the Minister agree, and does he agree that trade arrangements have their part to play to deliver this?
We will attempt to return to the noble Lord, Lord Freyberg.
Lord Freyberg Crossbench 3:54 pm, 8th September 2020
My Lords, I add my congratulations to the two maiden speakers. I have spoken before about the need to better harness the value of healthcare data in the UK. Today I want to draw attention to the need for clear provisions on data trade in the Bill, where they could usefully assuage concerns about privacy and patient safety, as well as help guarantee that economic benefits flow from the next generation of data-driven health services.
The Government have indicated that the Bill will enable the UK to take back control, so its provisions should ensure that we retain the sovereignty that implies. Others have called for a specific, if broad-ranging, carve-out for the NHS with this in mind. I ask the Minister whether he is minded at least to consider introducing a carve-out for publicly funded healthcare data processing services in the United Kingdom. This could be achieved here by guaranteeing the application of a pertinent national treatment limitation clause to new trade agreements and is, in some senses, consistent with the Government's existing policy concerning the offshoring of such sensitive personal data. In the light of the judgment of the European Court of Justice in the Schrems II case, as discussed by the noble Lord, Lord Clement-Jones, it would also indicate that the Minister takes privacy and the concerns expressed by the public in this regard seriously.
The Government must negotiate new trade agreements with countries which subscribe to an increasingly protectionist approach to intellectual property, and I am concerned that the effect of provisions in some agreements could be to reduce access to the algorithms that underpin them—in particular, where developed countries seek restrictions on forced disclosure of digital technology, treating source code and algorithms as trade secrets. Can the Minister assure noble Lords that it is his clear intention to safeguard us from all mutant and potentially lethal algorithms in healthcare when the Government negotiate digital elements of new trade agreements?
Finally, does the Minister agree that it is of the utmost importance that the UK Government do not find themselves in the invidious position of being sued for taking decisions about the processing of publicly funded healthcare data in the future, not least given the scope for them to contribute to economic growth through the Government's life sciences industrial strategy? If so, will he consider amending the Bill to ensure that no investor-state dispute settlement clauses may be introduced to new trade agreements where they would impact policy-making, regulation or the provision of services underpinned by publicly funded healthcare data in the United Kingdom?
Lord Lilley Conservative 3:58 pm, 8th September 2020
My Lords, I congratulate my noble friend and the right reverend Prelate on their excellent maiden speeches, and I welcome the Bill; it is necessary and workmanlike. But neither critics nor supporters should exaggerate its importance. Critics claim that it would lead to privatising the NHS, undermine environmental standards and threaten animal welfare. They have nothing to fear. Those things are outside the scope of the Bill. The Government certainly have no such intentions, and Parliament would not let them happen. But there is a tendency on all sides of the debate to exaggerate the importance of trade deals. They are useful and desirable, but their impact is much smaller than generally thought.
This was brought home to me when I was Trade Secretary. I had to implement the single market programme, held as the deepest ever free trade arrangement. I also had to negotiate the Uruguay round, which halved tariffs and set up the WTO. I made bullish speeches about both, and how they boosted our exports, but neither had the impact I anticipated. Indeed, UK exports to the 14 original members of the single market have stagnated since then, having grown at less than 0.5% per annum—barely 10% over the past 20 years. By contrast, our exports to the 14 largest countries with which we trade just on WTO terms have risen by 88% and now account for 37% of our goods exports worldwide. Our exports to countries with which the EU had negotiated trade deals—the subject of this Bill—have risen considerably faster than our exports to the EU itself, but by less than our exports to countries with which we have no trade deals, and therefore trade on WTO terms.
I have sympathy with noble Lords who call for a greater role for Parliament during trade negotiations. I felt uneasy about the lack of accountability to Parliament when negotiating the Uruguay round. Accountability can strengthen a negotiator's hands, not just in dealing with the other side but in galvanising his own. Civil servants work their socks off when they know a Minister will have to defend their actions in Parliament, but if that synergy does not exist—how should I put this to the Minister who was an official when I was a Minister?—officials feel freer to pursue their own agendas. But I reluctantly concluded then, as I do now, that though we should consult and report to Parliament, since nothing is agreed until everything is, so negotiation is inevitably a matter for ministerial prerogative and Parliament can only accept or reject.
I urge noble Lords to support this Bill, which will carry forward the modest benefits that existing trade agreements provide. But let us recognise that what really drives trade is producing goods and services that people want to buy and getting out and selling them.
Baroness Jones of Moulsecoomb Green 4:01 pm, 8th September 2020
My Lords, I too would like to welcome the right reverend Prelate the Bishop of Blackburn, who is not in his place at the moment, and of course the Minister, the noble Lord, Lord Grimstone. He has been very reassuring—one might say emollient—and has made some quite definitive, optimistic statements about what the Government will or will not do about the NHS and our food standards. I very much hope that the Government will not let him or us down.
It was almost exactly two years ago to the day, on 11 September 2018, at 5 pm, that I spoke on an earlier version of the trade Bill here in your Lordships' House. I looked it up today, and most of what I said is still valid and true. I pointed out, for example, that the Government's idea of trade is based on outdated ideas; I complained about the Henry VIII powers in the Bill; and I complained about the fact that, as I mentioned yesterday, when I voted to leave, I had no idea it would be possible to mess it up so badly. Of course in that debate, all Peers had unlimited time to air their views—one element of normality that I doubt the Government want back.
This legislation will have far-reaching impacts in economic, democratic and constitutional areas. Trade deals are no longer just about removing tariff barriers between countries. Modern trade deals can change vast areas of public policy, such as food standards, environmental protections, working conditions and the privatisation of public services. Protection of our NHS and of our food and animal welfare standards is very popular—definitely the will of the people. A trade deal can make huge changes to our hard-won rights and protections. I wonder when the Government are going to make these changes positive. We have scrutiny powers that are 40 years out of date, and taking any more power away from Parliament would be deeply anti-democratic.
We know that the USA is pushing for us to reduce our food standards to allow it to import food that would currently be deemed unsafe and just plain disgusting by British consumers. We hear a lot about chlorinated chicken, but the unsanitary, diseased conditions of American mass-farming are scarier than the use of chlorine. We should be glad that American chicken is chlorine-washed, because that makes it a little safer to eat. I am sure noble Lords know that someone eating food in the United States is 10 times more likely to contract food poisoning and other food-borne illnesses than if they were eating in the UK.
We have an opportunity here to rethink what trade means and what trade deals are. Trade does not have to be a race to the bottom or to the cheapest; it can be used as a way to work with other countries to create good jobs and improve living standards. Instead of working together to bargain away workers' rights and environmental protections, we could make deals in which we agree collectively to strengthen our standards. It is possible to be ethical about these things and to shape policy for the good, with an eye to the impact on climate change. I thank the noble Baroness, Lady Boycott, who is not in her seat at the moment, for her comments on climate change, and for saving me the effort of repeating them.
I have here a little wheat-sheaf from the NFU, which is all about Backing British Farming—I hope it does not mind me using it a day early—and that is exactly what we should do. We should be thinking locally and not internationally. Moving food around is not a smart way of operating.
Lord Hain Labour 4:04 pm, 8th September 2020
My Lords, I also welcome the maiden speeches by the Minister and the right reverend Prelate.
The UK faces the economic consequences of the global pandemic amplified by a no-deal Brexit. The Government have now admitted that, even with a Canada-style deal, non-tariff barriers and checks by the EU will come into force. Incredibly, the Government's border operating model will create an internal UK border in Kent, with truckers required to acquire a Kent access permit, or KAP, for the required paperwork before travelling, on penalty of a £300 fine.
The Brexiteers seem to remain under the delusion that they can replace the EU market—the richest and biggest in the world, and which constitutes nearly half of our trade—with new agreements with countries such as the US, which constitutes 16% of our trade; Japan, which constitutes just over 2%; and Australia and New Zealand, which constitute less than 1%. Leaked government forecasts suggest that a trade deal with the US would benefit the UK economic output by only about 0.2% in the long term. Japan has been reluctant to agree a deal more favourable than its existing agreement with the EU. As for Australia and New Zealand, they have a combined population of 30 million, compared to the EU's 450 million.
For the last couple of years, the Department of International Trade has been scrambling to roll over the 40 or so existing EU agreements with over 70 countries, constituting another 10% of our trade, excluding Japan. The DIT website shows that roughly half of these countries have signed rollover deals, often with human rights provisions watered down. The Bill fails to provide for essential parliamentary scrutiny of such future trade deals, as recommended by the Institute for Government to protect, among other important matters, human rights, workers' rights and the environment. Parliamentary scrutiny should extend to the UK's future membership of the World Trade Organization's Agreement on Government Procurement to protect public services, such as the NHS, which are at risk from grabs by US companies under the Government's agenda.
Then there are the reckless briefings in the media to renege on the Irish protocol in the EU withdrawal treaty, which would mean the UK defying international law, not to mention poisoning relations with by far our biggest trading partner and undermining the Good Friday agreement.
The spurious claim that, cut off from open access to the EU, Brexit would enable the UK to make advantageous trade deals is unravelling before our eyes. The Bill does nothing to mitigate the disastrous economic consequences of no deal, or a thin-deal Brexit, now tragically in prospect.
Baroness Bakewell of Hardington Mandeville Liberal Democrat Lords Spokesperson (Environment, Food and Rural Affairs) 4:08 pm, 8th September 2020
My Lords, I also congratulate the Minister and the right revered Prelate the Bishop of Blackburn on their maiden speeches.
I wish to speak about the impact of the Bill on food and farming. During the passage of the Agriculture Bill, it was made abundantly clear that the food and farming industries are extremely concerned about the Government's push to secure trade deals with some countries outside Europe. Our current animal welfare and health standards are totally in line with those in Europe, and the nations of Britain have an unrivalled high record in this area. Consumers and farmers alike are concerned that the new trade deals will mean that food produced to lower animal health and welfare standards will begin appearing on our supermarket shelves. This food is likely to be cheaper because less stringent production methods have been used, and it will not be labelled as such. The result will be that our own farming industry will be undercut by these products, and farmers will find that the market for their excellent produce will dwindle.
Much has been said about the importation of food products from the United States, where its chickens are washed in chlorine to compensate for the poor welfare standards they are raised in. Its cattle are injected with hormones to increase their muscle weight, but this does very little to improve their flavour. Some years ago, when out for a meal with our family who live in Alabama, one member of the family commented that her steak had no flavour at all. I believe that this is the norm, and why many Americans add rubs and spices to their steaks to make them palatable.
It is not that the US wishes to import our own excellent food products, with the exception of Scotch whisky. It is unlikely to have Aberdeen Angus beef in its supermarkets or some of our excellent cheeses on its shelves. This is not an agricultural two-way street that the Government are taking us down. There is a total lack of regulation in the US of genetically modified crops and food. In Britain, currently such GM and GMO foods are strictly regulated, and consumers can be confident that they are being protected. No such reassurance will be provided for goods coming from the US.
It is vital that British farmers are protected from the effects of poor-quality imported food and that the British consumer is similarly protected from food that is not suitably labelled with its country of origin, method of breeding and production. I look forward to the Minister's reassurance that the Trade Bill will not undermine our current agriculture industry.
The Earl of Devon Crossbench 4:10 pm, 8th September 2020
My Lords, I am no trade export but, as a Californian IP litigator, a Devon farmer and father to an American family, I want to understand what a US-UK trade deal might look like and the process by which it will be reached. I am grateful to the noble Lord, Lord Grimstone, who is to be congratulated, along with the right reverend Prelate, on an excellent maiden speech, and I am grateful to his team for the updates, but I am concerned by the opacity of the process and the ad hoc nature by which information is made available.
I sought trade negotiation expertise at London's leading international law firms, but there is none. The experts are all in Brussels, and therein lies an issue. Britain thinks of itself as a great trading nation, and once we were, but that was decades ago. Right now, we are pure novices, yet we are negotiating with the world's most experienced trade teams—the US, the EU, Japan and others—under considerable pressure, at very short notice and in the teeth of Covid-19.
Parliamentary oversight and transparency are essential, but the Government's cloak-and-dagger approach can foster only mistrust and uncertainty in our negotiating counterparts. They need to know that our negotiators represent the British people and not merely vested interests promoted by the Government.
For months, I have wanted to know the composition of the expert trade advisory group for agriculture, but details have not been forthcoming. We all know the vast agricultural interests that drive trade negotiators in the US, particularly with the presidential election looming. We cannot say the same for our negotiation team. Can the Minister please explain whether this obfuscation is a deliberate government policy and, if it is, can he explain what benefit it serves?
Returning to our rich trading heritage, 400 years ago next week the "Mayflower" set sail from Plymouth—a timely reminder that European settlement of North America was about trade, along with other things. While undoubtedly that was key to the development of Great Britain and its Empire, it was decidedly not a good development for the indigenous peoples of North America or west Africa. Trade was made for the subjugation of others in the quest for better-priced commodities. Given the importance of the Black Lives Matter campaign, what assurances can the Minister give that our trade deals will not exacerbate discrimination and the exploitation of minorities?
Finally, we have heard much on climate, animal husbandry and food standards, and much of that pertains to the Agriculture Bill, so I will not repeat myself here, save to reiterate a plea that we be cautious of overprotecting our markets but, rather, focus on promoting our low-carbon, high-welfare agricultural products. The US and other major economies will soon adopt net-zero targets similar to our own, and we should become world leaders in the export of agritech and environmental science expertise.
Lord Borwick Conservative 4:13 pm, 8th September 2020
My Lords, first, I declare my interests in trading companies, as listed in the register.
When I first opened the Bill, I wondered why much of it was necessary. It had never occurred to me that HMRC could not already do what is permitted under this Bill. Was this collection of data done anyway and then stopped? Surely the data collection was necessary to make the figures accurate. Clearly, HMRC has trouble with the regulations.
I have heard it said by business leaders that the GDPR is one of the most burdensome regulations that Parliament has produced. Business leaders are usually not very good at explaining which bits of regulations they would like to see changed, but almost all can say something bad about the details of the GDPR. I am glad that the Bill will remove some of that regulatory burden from HMRC and the Government. That is a good step in starting to remove the burden from business. Perhaps these clauses reveal excellent communication between HMRC and the department. HMRC has a problem; the Government step in and solve it. That is great. When will any department ask for the details of similar problems being dealt with by business and solve them? Regulations, like taxes, are costly and need to be reduced as soon as possible.
A few years ago in a debate about salesmanship, my noble friend Lord Grade gave a spellbinding speech about how salesmanship is undervalued by British business, and I agree with him completely. Furthermore, I suggest that trading ability is in the same category. Some historians argue that it was the 18th-century world traders rather than the 19th-century manufacturers who were responsible for the pre-eminence of the British economy up to the First World War. Whatever the merits of their trade, one can certainly admire their bravery in travelling all over the world without a way to get home in a hurry. Even nowadays, there is a large element of bravery and imagination in setting up a sales business, selling British goods to places that have not bought them before. However, these people are usually not helped by more legislation, and on the whole the British Parliament should do its best to ensure that they are hindered to the minimum extent. I think that the Bill achieves that, but the amendments talked about this afternoon would carry the ability to get in their way substantially.
The amendments debated and rejected in the other place will no doubt reappear here. No doubt they will be enthusiastically supported by a majority in our House, and no doubt they will be rejected all over again. The concept of trade democracy sounds seductive, but we would all agree that democracy produces uncertainty. Many noble Lords started their career in this House following the result of an uncertain election, but certainty and stability are important to a trader. The world is getting smaller, but it is certainly getting more complex and unpredictable.
For some years, I was lucky enough to be chief executive of a group of companies, one of which had the majority market share in the sale of bus doors to Hong Kong. Perhaps that dates me, as the idea of profitably sending a crate of glass and aluminium assemblies from Beverley in Yorkshire to Hong Kong is a bit unlikely, however skilled the workforce in my favourite factory was. But that trade was so extraordinary that it was difficult to explain, and certainly no Government were able or needed to help it. However, we had heroes ready to leap on to a plane to Hong Kong at no notice to solve a customer's problem, and those sorts of diligent people are not those who have a great deal of time for politics. Traders trade despite regulations, not because of them, so I doubt very much that the sorts of amendments proposed for this Bill will be designed to increase trade between British companies and overseas customers.
Baroness Donaghy Chair, EU Services Sub-Committee, Chair, EU Services Sub-Committee 4:17 pm, 8th September 2020
My Lords, I congratulate the noble Lord the Minister on his maiden speech, as I do the right reverend Prelate the Bishop of Blackburn. The Minister's presentation was a lot clearer than his Bill. I support everything that my noble friends Lord Stevenson of Balmacara and Lord Whitty said. In his opening remarks, the Minister referred to the Trade Remedies Authority and gave an assurance that it would be independent. I think that we need some guarantees about that, and I hope that the TRA will be treated better than the Competition and Markets Authority has been.
I want to concentrate on competition and state aid infrastructure. Let us look at the extraordinary history of the Government's handling of the future responsibilities of the CMA. They moved from designating the CMA as the domestic regulator with proposals to provide additional interim financial support. Subsequently, in February 2020, that draft regulation was withdrawn and the Government now maintain that ratification of the withdrawal agreement with the EU means that a domestic regulator might not be needed at all—from winning the lottery to possible abolition. I have no idea why the chairman of the CMA, the noble Lord, Lord Tyrie, resigned, but I can take a good guess.
Despite close questioning in June from the noble Lords, Lord Turnbull and Lord Lamont, and my noble friend Lord Wood about the void in policy, the Minister, Paul Scully—same Minister; different Government—maintained that the Government were "working on options" which would be discussed with key stakeholders in due course. There was no hint that policy on the CMA would change as a result of the withdrawal Act, and I am not sure which is worse—being disingenuous or making it up as you go along.
There are complex issues around state aid, not least of which is what structure will be established for consultation with the devolved Administrations, and what strategy the Government will adopt. What is the future for the CMA? How will it tie in with the Bill? If the Government are content that the WTO rules are sufficient, how can they persuade the devolved Administrations that they will get a fair deal?
Lord McNally Liberal Democrat 4:20 pm, 8th September 2020
My Lords, I welcome the speech by the right reverend Prelate the Bishop of Blackburn, not least because I speak as Lord McNally of Blackpool, and it was encouraging to hear him talk about some of Blackpool's problems and some of its successes, because both should be remembered.
I also welcome the Minister, not just for this Bill but for his vast knowledge of China. I suspect that his experience will be needed now as much if not more than when he was encouraging the golden age of our relationship with China. I share with the noble Baroness, Lady Jones, an admiration for his wonderful bedside manner—but the wrong policies put forward in a wonderful bedside manner are still wrong, so I hope that he will listen to some of the experience in this House during the task ahead. It cannot be suggested that this is just some kind of nodded-through technical Bill to cover matters already discussed and decided. The evidence against it is far too strong.
I also ask the Minister to read the report of yesterday's Grand Committee debate about the powers of Parliament. The CRaG Act was produced when we were firmly ensconced in the EU, and it is stretching credulity too far to suggest that its powers and responsibilities do not need to be reviewed, as is true of the royal prerogative.
We cannot allow this Bill to be nodded through as a mere technical transition of existing and agreed measures. Too many sectors, from intellectual property to the Green Alliance, from farmers to the BMA, have asked for their interests to be better protected during the passage of this Bill. Too many sectors have had their concerns fobbed off with "it'll be all right on the night" bravado from Ministers. I was interested in the warnings of the noble Earl, Lord Devon. There is a very real danger that a Government desperate to prove that they can get trade deals will indulge in a race to the bottom, putting at risk environmental, work and safety standards, and creative and cultural assets. I urge the Minister to look again at the Djanogly amendments, which were not carried in the other place, because nothing would give greater confidence in the intentions of the Government than if they were to bring the Djanogly amendments back and pass them in this House.
Baroness Hooper Conservative 4:24 pm, 8th September 2020
My Lords, I add my good wishes and congratulations to the Minister and the right reverend Prelate the Bishop of Blackburn on their excellent maiden speeches.
Since I participated in the consideration of last year's Trade Bill, and as things have moved on since then, it was most helpful to hear from the Minister the ways in which this Bill differs. I hope and trust that many of the forceful arguments raised in your Lordships' House then have influenced the Bill before us—although that is not obvious.
Many of the things which I welcome and support have already been said and, in the short time available, I shall only emphasise that I agree with the argument that a trade agreement in itself does not create trade. We need boots on the ground, fully equipped with enthusiasm, perseverance and appropriate languages, but a trade group agreement can facilitate trade, and it is perhaps worth noting at this point that a double tax treaty can also make a difference. As many of your Lordships know, I have an interest and involvement in the countries of Latin America and am president of the All-Party Group on Latin America. In that context, I am interested not only in the continuity of trade agreements, but in developing and enhancing them. I am delighted that the agreement with Chile is one of the 20 agreements already ratified, but can the Minister give us any information on continuity regarding the EU-Mercosur agreement? After years of negotiation in which we were fully involved, it appears to be close to completion, but not within our membership timetable. Since important markets in Brazil, Argentina, Paraguay and Uruguay await us, and since under the EU-Mercosur rules we cannot enter into unilateral agreements with individual countries, I would welcome the Minister's views on future plans.
Finally, I welcome the Government's assurances that powers in this Bill will not be used to reduce standards. In the good old days of our membership of the European Union, we were rather given to gold-plating EU rules and regulations in any event—for example, on paternity leave, flexible working and one of the strictest ivory bans in the world. That approach augurs well for the future. In the past, the Government could blame Brussels if anything went wrong, so I hope that they are now ready to face the future without a scapegoat. I hope and feel sure that your Lordships' scrutiny of the Bill will ensure that it leaves the House a better Bill.
Baroness Ritchie of Downpatrick Non-affiliated 4:27 pm, 8th September 2020
My Lords, congratulations are due to the Minister and the right reverend Prelate the Bishop of Blackburn on their maiden speeches.
In just a few weeks' time, the UK will fully and finally leave the EU. There is very little time for the British Government to secure a trade agreement. Serious questions are now being asked about whether they want a deal at all. Lest we be in any doubt, to preserve our economy in these islands there needs to be a trade deal, and while this Bill deals with very technical issues to make provision about the implementation of international trade agreements, there is a glaring omission: the need for both Houses of Parliament to scrutinise the trade deals, as happens in other institutions.
An area of this Bill that has been totally eclipsed by the internal market Bill due to be unveiled shortly is that of trade relations between Northern Ireland and the rest of the UK, and between Ireland and the UK. I understand that in the other place today, the Secretary of State for Northern Ireland indicated that it would represent a breach of an international agreement. I find it totally inexplicable that the EU withdrawal agreement—an international agreement between the UK and the EU—could be unilaterally undermined by the British Government. Can the Minister provide us with further details on that, because it is essential to any trade deals and to any discussion on the Bill?
We have to think about the Northern Ireland protocol. There are various issues and concerns to be addressed. What happens if Northern Ireland is excluded from UK free trade agreements? What measures will be put in place to minimise this risk? What mitigating measures will there be to prevent Northern Ireland being outside all free trade agreement areas? To be absolutely sure, we would like to see standards for agriculture and trade enshrined in this legislation so that it coincides with the Agriculture Bill and those standards do not lie outside legislation. The same goes for our National Health Service, which is not up for marketisation.
Lord Rooker Labour 4:31 pm, 8th September 2020
My Lords, I too welcome the maiden speeches of the right reverend Prelate the Bishop of Blackburn and of the Minister. I too made my maiden speech from the Dispatch Box, 19 years ago.
This Bill is about standards—standards of governance and transparency and standards of food. In respect of governance and transparency, it is crystal clear that the Bill has to be amended to allow Parliament a greater degree of scrutiny of trade deals. I will support something like new Clause 4, which was promoted in the Commons on a cross-party basis, but we need to go further. I shall be tabling an amendment based on the Food Standards Act 1999. It will propose that the Trade Remedies Authority have the same rights as the Food Standards Agency to publish its advice. This will guarantee its operational independence.
I am sure that, by now, the Minister's private office is thoroughly embarrassed by the lack of attention to detail because he referred to the Food Standards Agency as an entirely different body.
The Conservative manifesto is clear on pages 42 and 54 about animal welfare. On page 57, it is very clear about not compromising on high environmental protection, animal welfare and food standards. However, there is nothing in the Bill on that. It is true that more Conservative voters than Labour voters support the United States' policies of chlorine-washed chicken, dairy products treated with antibiotics and meat treated with hormones. In a recent YouGov survey, 15% of Tory voters polled supported chlorine-washed chicken, against 3% of Labour voters. The figures were 13% and 3% for dairy products treated with antibiotics and 12% and 5% for hormone-treated meat. These figures are not very high, even for Tory voters, are they, Minister? Overall, in the same poll, 80% of the public said they found such policies unacceptable. As high a figure as 87% opposed the removal of labels showing the origin of meat products, which is what the United States wants. It will take a really brave Minister to try these policies out.
Southampton University has shown that washing with chlorine does not take all the nasty bits out. Nothing is risk free, but we have been safer in the EU than we will be outside it. When we leave on 31 December, we will lose the use of RASFF—the rapid alert warning system for food and feed. Some eight alerts per day are issued, warning of hazards such as salmonella in meat products, mercury in fish products and aflatoxins in fruit, nuts and vegetables.
Finally, I return to the first two points I made about governance and transparency. I am not alone in detecting a high stench of corruption in this Government. The searchlights of openness and transparency are the weapons needed to combat this stench. They should be inserted into this Bill.
Lord Chidgey Liberal Democrat 4:33 pm, 8th September 2020
My Lords, I congratulate the Minister and the right reverend Prelate the Bishop of Blackburn on their excellent maiden speeches.
In the very limited time available to speak in this debate on the critical Trade Bill, I will concentrate my remarks on trade with Africa, acknowledging my interests as set out in the register. I have acted as a political co-ordinator for the parliamentary offices for budget oversight throughout the SADC region of southern Africa.
The Government stress the importance of trade agreements with Africa, particularly in a post-Brexit era. African economic growth outstrips many parts of the globe and many African countries have a common affinity with the United Kingdom—shared language, laws and accountancy practices. There is, however, an overwhelming desire to break the historic pattern of exporting raw materials and food and importing manufactured goods from the West. Instead, African countries are building trading agreements between them, supported by regional transport links rather than links merely to the nearest port.
This brings me directly to the development of treaties entered into with the European Union. Many African countries have signed economic partnership agreements but a number, notably Kenya, have stopped short of ratifying them in their Parliaments. In discussions with finance Ministers from Namibia, Tanzania, Uganda and other SADC members, with a deputy director-general at the UN and with senior parliamentarians from Scandinavia, Holland, Belgium and Ireland, it became clear that the EPAs, which had been developed from co-operation agreements that gave ACP exports preferential access to European markets, were deeply controversial. There are fears that the EPAs are undermining the sustainability of ACP countries and their regional integration processes. In this context, the status of the UK's trade and development agreements with African countries at the end of the UK-EU transitional period is a crucial issue.
I would be grateful if the Minister could acknowledge the urgent need to clarify the status of the UK's new free trade agreements with blocs of eastern and southern African countries. To these must be added others in east and west Africa which have yet to be concluded. In particular, regarding the Southern African Customs Union, which was formed in 1910 and is the oldest customs union in Africa, can the Minister say if the agreement has been ratified by all parties? If not, which parties have ratified it and which have not? Will the new trading agreements be fully operational from 1 January 2021? What aid for trade commitments have the Government made since these agreements have been signed? What new aid for trade commitments for these countries will the UK Government be making in the financial year 2020-21 to accompany these agreements?
Lord Taylor of Warwick Non-affiliated 4:37 pm, 8th September 2020
My Lords, I welcome the Minister; I am sure he will continue to bring much experience and expertise to his role. I also welcome the right reverend Prelate the Bishop of Blackburn and thank him for his excellent maiden speech.
For Britain, trade must never fade. For centuries we have been an international trading nation but, after 47 years in the European Union, Brexit has once again given Britain the power to make trade agreements for itself.
Trade is not just about money and finance. International trade is an agent for peace. There are many examples in the Bible, for instance where the Israelites made a treaty with the Phoenicians. They organised merchant trading ships which travelled so far that some of their round trips took as long as three years. These not only resulted in great wealth but brought peace to what was then the known world.
I am delighted that the Government have already concluded 20 continuity trade agreements with 48 countries, which accounted for £110 billion of UK trade in 2018. This represented 74% of the trade with nations with which we were seeking continuity before leaving the EU. As someone of Caribbean heritage, I am delighted that this includes the CARIFORUM trade bloc, of which my parents' birth land of Jamaica is a member. I was increasingly concerned that our preoccupation with the EU countries for more than four decades was overshadowing our close historical, religious, royal and cultural ties with the Commonwealth. Now that the news cycle is more centred on black and other ethnic minorities—at least for the time being— I am glad that Brexit can make the Commonwealth family even stronger.
At present, Parliament's role in the trade agreement process is defined by Part 2 of what is known as the CRaG Act 2010. The CRaG Act process has been described as inadequate and unfit for purpose by no less than four senior parliamentary committees. We should remember that, when the Act was passed, the UK did not make trade agreements by and for itself. Scrutiny of such agreements fell within the scope of the European Union. Will the Minister recognise that, since things have changed and we are no longer part of the EU, it now has to be in our interests for the UK Parliament to be given greater powers to scrutinise future trade agreements? Scrutinise does not mean mutiny or interference, but oversight in order to make the whole better.
I acknowledge that the Trade Bill establishes a new Trade Remedies Authority. I know that two senior executives have resigned in recent months, but I wish this new body well.
I welcome this Bill because, crucially, it enables the UK to implement in domestic law obligations that the UK signs with countries which have had existing agreements with the EU.
Covid-19 has put great financial strains on this nation, so rebuilding our economy is vital. It is through trade that an even greater Britain will emerge from the economic shade.
The Earl of Lindsay Conservative 4:40 pm, 8th September 2020
My Lords, I too congratulate my noble friend the Minister and the right reverend Prelate on their excellent maiden speeches. In warmly welcoming the Bill, I want to focus on how the Government can deliver the priority they attach to the achievement of frictionless trade in current and future trade deals.
For trade to be frictionless, there must first be mutual recognition between trading partners of the standards relating to the goods and services being traded. Secondly, there must be mutual recognition of a regime of accredited conformity assessments that verify that those goods and services are complying with those standards. This mutual recognition of standards and accredited conformity assessments already underpins many international trade agreements around the world. It is therefore unsurprising that standards and accreditation, with their critical role in underpinning trade, are treated as global activities and are overseen by international organisations made up principally of the relevant national institutions of most of the world's economies. In the UK, the relevant national institutions are: the British Standards Institution, or the BSI, the UK's national standards body; and the United Kingdom Accreditation Service, or UKAS, the UK's national accreditation body. Here I should declare an interest as chair of UKAS.
UKAS and the BSI are leading lights in the international organisations that oversee the global role that standards and accreditation play in facilitating frictionless trade. Accreditation at national and international level is the highest level of assurance that permits the free movement of products and services. The OECD estimates that 80% of global trade involves some form of conformity assessment which enhances competitiveness by demonstrating that products and services meet the requirements of Governments and consumers. In short, mutually recognised accreditation, alongside mutually recognised standards, is a tried, tested and well-proven combination for delivering frictionless trade.
In closing, I ask the Minister to confirm that the mutual recognition of standards and accredited conformity assessments derived from the UK's national standards and accreditation bodies operating through international frameworks will be central to the UK's trade negotiations and future trade agreements.
Lord McConnell of Glenscorrodale Labour 4:43 pm, 8th September 2020
My Lords, I too welcome the noble Lord, Lord Grimstone, to his place and welcome his maiden speech. As chair of Standard Life, he brought strong strategic direction, clarity and consistency to the company over many years, which ensured that it survived and thrived in difficult times for many other companies in financial services in this country. As he said, at the heart of that was good governance. I hope he is able to bring some of that to help his colleagues in the Government in these troubled times.
I want to make two points. The first is in relation to parliamentary scrutiny and engagement with the devolved Governments and Parliaments. One of the reasons we are in this place—by that I mean moving towards the final stages of Brexit—is the decline in trust in politicians, government and institutions over recent years. While the Government's intention might be to try through Brexit to bring back some of that trust and to deal with some of those issues, I do not believe that we can deal with the problem of trust among the general population in institutions and Parliament by reducing the role of Parliament in scrutinising trade agreements and other important decisions. I urge the Government to look at this in a positive way and to enhance the role of Parliament, not diminish it, as they bring trade agreements back home to the UK.
I also urge them to take the same approach in relation to the involvement of the devolved nations and their Governments and Parliaments, because early engagement with the devolved nations can ensure that we have better, not worse, trade agreements. We will have more unity in the country—unity of purpose and of implementation—if we are able to secure that engagement, and therefore better agreements at the end of the day.
I also urge the Government to think positively in a wider sense about trade. The noble Lord, Lord Chidgey, mentioned this in relation to some of the developments that are taking place across Africa in these times. We need trade agreements that serve not only the economic interests of the UK and its population but do not make climate change worse or increase the inequity in the world and therefore all the many problems of migration and conflict that result. Our trade policy should not only ensure that we have strong democratic accountability at home but that we have a real sense of purpose abroad.
I think—I hope—we all have a shared objective in trade that is free and fair but that also grows the global economy, as well as our own, and ensures that more people in the world can secure its benefits, and therefore a better life and better opportunities.
Baroness Featherstone Liberal Democrat 4:46 pm, 8th September 2020
My Lords, I congratulate both maiden speakers on their excellent maiden speeches.
The Government assure us that this is a continuity Bill, but that is not totally true. That is not all that it is. The Government also assure us that food and environmental standards will be maintained, but will they? On what basis should we trust a Government that have not stuck to a single edict they have issued during the coronavirus pandemic and who only today have signalled their intention to renege on an international treaty? What is the comfort that underpins their assurances? Words seem very cheap. The Government assure us that they are putting green at the heart of recovery, but assurances are not the actualité. If all those things are the case, why not underpin those assurances with legislation?
This Bill is not simply about continuity rollover of trade agreements, because it enables further change to be enacted by secondary legislation. Assurances that anything major would be the subject of further legislation sadly count for nothing. Perhaps the Minister would like to explain exactly who would be the arbiter of a minor technical change which rightly could be dealt with by an SI and who would not. When you add in the absence of any commitment to discuss or consult on proposals for changes that might well be contained in these extensive powers, one cannot help but be left with suspicions. The Trade Bill is vulnerable to major changes, with new trade agreements that bear scant relationship to a simple rollover.
This need not be a bad thing. I would argue that it could be an opportunity to change to even better environmental and food standards and work conditions, which we should be looking at post Covid. Covid has bequeathed us an opportunity to do things differently. With the scales gone from our eyes, we can see the unacceptable level of inequality that bedevils our country. We can see that the planet needs us to take the radical action that Covid forced on us, and that there has to be a better balance between "what's good for me" and "what's best for us"—an aspiration for the common good rather than only individual advancement. Let us really take back control and use this as an opportunity to build back better.
With a majority such as that enjoyed by this Government, it can only strengthen their negotiating position and validation of outcome by having input from Parliament and others. Sunshine is the best disinfectant, they say. Openness, transparency and proper scrutiny will not only reassure those of us who are, to put it politely, sceptical of the Conservative Government's agenda but will strengthen their position.
Lord Hope of Craighead Chair, High Speed Rail (West Midlands - Crewe) Bill Select Committee (Lords), Chair, High Speed Rail (West Midlands - Crewe) Bill Select Committee (Lords) 4:50 pm, 8th September 2020
My Lords, following the points made by the noble Lord, Lord McConnell, my interest in this important Bill is in how it deals with the devolved authorities. The sensitivity of arrangements relating to trade cannot be overstated. Plans are already being made by the Scottish Government for the holding of a second referendum on independence after the elections to the Parliament at Holyrood in less than eight months' time. This is an increasingly perilous time for those who believe in the union. Anything that might be seen as failing to respect the desire of the Scottish Government to be free to run their own affairs as they choose in this crucial area and set their own standards will be seized on by supporters of the campaign for independence. I will leave that warning on the table for now and concentrate on the Bill.
There are two points to which I wish to draw attention. First, international relations and the regulation of international trade are reserved to the UK Government here at Westminster, so the devolved authorities have no formal role in the negotiation or approval of these agreements. However, the implementation of an international trade agreement in the devolved nations is a devolved matter, and there are bound to be cases where the content of an international trade agreement will affect an area of devolved competence. We can see how the Bill deals with the exercise by the devolved authorities of their powers in that regard in Schedule 1, which states that
"no provision may be made … unless it is within the devolved competence".
There can be no complaint about that, and the absence of any attempt now to limit what may be done here within a devolved competence is as it should be. However, we are told that:
"No regulations may be made by a devolved authority … about any quota arrangements … unless … after consulting with a Minister of the Crown."
This looks like a constraint on the exercise of devolved powers so it needs to be explained and justified. What is the purpose of that provision? Can we be assured that it is consultation for information only and is not intended to fetter those powers in any way?
Secondly, conspicuous by its absence from the Bill is any provision about what would happen if the power in Section 2 to modify retained EU law were to be used by Ministers of the Crown to amend legislation in the devolved areas. It is often said, when issues of this kind are raised, that such powers are not normally used without the consent of devolved Ministers, but why in a matter of such importance as this does an unqualified requirement for consent not appear in the Bill? There is not even a requirement to consult the devolved Ministers before doing so, in sharp contrast to what Schedule 2 says that those devolved Ministers must do. Why not? What is sauce for the goose should be sauce for the gander. Can the Minister assure the House that those Ministers will at least be consulted and their consent sought before any such provision is made amending legislation in the devolved areas?
Baroness McIntosh of Pickering Conservative 4:53 pm, 8th September 2020
My Lords, I congratulate my noble friend the Minister and the right reverend Prelate the Bishop of Blackburn. I welcome them both to the House and look forward to working with them over the next few months.
I broadly welcome what is in the Bill so I would like to focus on what is currently not in it. I recognise that the UK has a proud history as a trading nation—we are an island so we are completely dependent on trading—but we are leaving the trading bloc of 500 million consumers of which we have been a part for nigh on 50 years. Currently there is no reference to a body that would advise the Government on future trade deals and indeed rollover trade deals, so I welcome the non-statutory body of the Trade and Agriculture Commission. Parliament has an important decision to make on what the future of that commission should be. I would like to see a permanent advisory body on a par with the Migration Advisory Committee and the climate change committee, and indeed those trade advisory bodies that countries such as Canada, the US, New Zealand and Australia have, which advise their Governments on and measure each trade deal against those criteria.
I pay tribute to my noble friend's predecessor, my noble friend Lady Fairhead, who got and summed up the mood of the House and indeed accommodated a number of amendments that improved the previous Bill. Obviously it is a disappointment that those amendments have been lost, and I hope that the Minister will use his good offices to reinstate them. However, perhaps one rollover agreement that we do not want to see as a model is that which we reached with the Faroe Islands, whereby we take £200 million-worth of goods from it, mostly fish, but export only £90 million-worth of products to it.
Secondly, I welcome that the Government and the Minister today have said that we will not lower our standards of production. However, the flipside of that, as referred to by Henry Dimbleby in his first report on our food strategy, is that we must not allow produce to enter the UK that is to a lower standard. I want to take the opportunity of this Bill to ensure that that is written into it. I would also like to see on the advisory board a British official, perhaps one currently working for the Commission, who has a track record and experience of negotiating trade agreements.
While I welcome the Bill, I think there is too much reliance on delegated powers and we need to see much more in the Bill itself.
Baroness Tonge Non-affiliated 4:57 pm, 8th September 2020
My Lords, I congratulate the noble Lord, Lord Grimstone, and the right reverend Prelate the Bishop of Blackburn on their maiden speeches. I particularly commend the right reverend Prelate on mentioning inequalities and human rights; he is one of very few Peers to have mentioned those issues.
I want to ask some questions about the old trade association agreements made in 1995 between the EU and other countries. Israel in particular springs to mind. I have been told, after Questions to the Government, that the terms of the old EU association agreements have been adopted in the new agreement between the UK and Israel. This trade agreement was signed as long ago as August 2019 with, as far as I know, no parliamentary scrutiny at all. The terms of the new agreement, as in the old one, include Israel's commitment to observing human rights and democratic principles, and adopt,
"as a main objective, the encouragement of regional cooperation with a view to the consolidation of peaceful coexistence and economic and political stability."
Those are fine words.
The Government of Israel allow the constant humiliation and persecution of the Palestinian people under occupation in the West Bank and Gaza. Land is stolen, crops are destroyed, water is restricted and almost always polluted, and electricity is rationed to a few meagre hours a day. Children are harassed and badly treated in prison, and many have been killed; in fact 3,000 children have been killed in the last 17 years. Homes are demolished and families made homeless. I could go on and on, as noble Lords know. Is this Israel's adherence to the terms of the new trade agreement? Is this how it respects human rights? We can no longer fall back on the European Union for a decision—not that it ever took a lot of action. The monitoring of the terms of the agreement is now our responsibility and ours alone. Will the Minister tell the House how this monitoring is to be done?
Looking further across the world to other trading partners, why do we continue to trade with Myanmar, despite its treatment of the Rohingyas? This was raised with me by Bangladesh officials over a year ago when I visited that country. Saudi Arabia is another tale of violation of basic human rights, while the noble Lord, Lord Alton, mentioned China and its treatment of the Uighurs. Are we to put no conditions that have to be adhered to on these other countries?
I remind the Government of the pledge in the Export Control Act, passed in 2002, not to sell arms to countries that would use them for internal repression or external aggression. Those are also fine words. On this and other issues, when is our country going to practise what it preaches?
Sitting suspended.
Baroness Redfern Conservative 5:31 pm, 8th September 2020
My Lords, I too congratulate the Minister, the noble Lord, Lord Grimstone, and the right reverend Prelate the Bishop of Blackburn on their excellent speeches. I also thank the Minister for introducing the Bill, which puts in place measures that support the UK in achieving an independent trade policy, ensuring that the British taxpayer gets the best deal while public sector organisations and government departments continue to benefit from increased choice and value for money on contracts.
The Bill creates a new independent body, the TRA, which allows businesses to liaise with negotiators as deals progress, importantly keeping stakeholders informed in a timely manner and protecting British businesses from unfair trading practices or unforeseen surges in imports, as we have seen with the dumping of steel in the past. As someone who lives near Scunthorpe, I note that British Steel produces some of the best-quality steel in the world. It stands ready in the global market, supported by excellent SMEs in the supply chain. I am pleased to see that the powers in the Trade Bill will not be used to privatise the NHS, to which the Government are committed.
Lincolnshire, where I live, is noted for being the bread- basket of the UK, supporting farmers, producers and exporters in maintaining and enhancing their critical edge in global trading. Under a free trade agreement, great importance will be attached to ensuring that the standards to which imported goods are produced—including animal welfare standards—are as high as, or higher than, our own. I particularly welcomed the banning of veal crates in the UK 16 years before the EU banned them. On the environment, too, the UK was the first major economy in the world to enshrine in law the requirement to bring all greenhouse gas emissions to net zero by 2050. People want to see a doing Government.
The Bill creates a new discretionary legislative gateway to allow data sharing from specified public authorities, most notably the Minister for the Cabinet Office and the Secretary of State for International Trade, with other Ministers of the Crown supporting their functions in relation to trade.
To support the UK as an independent trading nation, we must have a robust independent trade policy. Parliament will have the opportunity to scrutinise any legislation required to implement the treaty in the normal way. I support all four areas in the Trade Bill and look forward to the next stages as it progresses.
Lord Wood of Anfield Labour 5:34 pm, 8th September 2020
My Lords, I too offer my congratulations and very best wishes to the new Minister. It is slightly depressing that we have to make the case for basic parliamentary scrutiny to a Government who, once again, seem intent on minimising it but, yet again, this is what we have to do. The degree of parliamentary scrutiny provided for in the Bill is laughably thin; as some noble Lords have observed, we are faced today with a proposal to approve fewer scrutiny powers and control over trade agreements than when the UK was a member of the European Union—so much for taking back control.
The European Parliament, a body so often disparaged as lacking legitimacy and plagued by democratic deficit, has access to timely information about trade negotiations, access to negotiating texts, and is able to vote on the final outcome. We have an archaic provision that trade falls under the royal prerogative, with Parliament involved only at the end of the treaty-making process, at a time when it cannot influence the substance and text of the treaty.
I use the word "archaic" because the world of trade deals has transformed since the last time the UK had competency in trade policy, in the early 1970s, in a way that demands updating the commensurate powers of Parliament. Trade deals then were fundamentally about tariff reductions and associated border measures. They attracted little public attention and raised few wider concerns, and thus enjoyed little debate and scrutiny in national Parliaments. Now, in 2020, trade agreements have huge implications for public policy across a range of areas, from farming and food, to the digital economy, healthcare, financial services, manufacturing and even education. Proper prior parliamentary scrutiny, including the opportunity to question and challenge Ministers at a formative stage of the proposal, is appropriate in an age when the scope, implications and public concern on the substance of trade agreements is light years greater than it was 50 years ago.
Secondly, unfashionable as it is to say it, proper parliamentary scrutiny would improve the quality of decision-making. Ministers who know that their decisions will be examined by Parliament are, I suggest, more likely to make proposals robust enough to survive scrutiny.
Thirdly, proper parliamentary scrutiny would help rebuild public trust over whether policymakers are responding to public concerns on issues such food standards, where polling suggests that there is significant public lack of trust.
Fourthly, as the noble Lord, Lord Lilley, explained from his experience, requiring legislatures to approve a negotiating mandate can provide strength, not weakness in international negotiations by providing constraints on those negotiators. Therefore, I strongly support the proposals set out eloquently by my noble friend Lord Stevenson at the start of this debate.
Like trade, the decision to deploy the Armed Forces is also an area traditionally reserved for the royal prerogative. Yet Parliament has been asked to debate on both Armed Forces deployment and prerogative power on several occasions since 2003. In 2011, the Government suggested that a convention had emerged whereby the House of Commons should debate before such deployment. As Emily Jones, a trade expert and my colleague at the Blavatnik school at Oxford University, has argued, a similar practice could be adopted for trade agreements, with the Government committing to a full debate on a substantive Motion prior to ratification of any trade agreement that the relevant scrutiny committee deems of interest. Back in 1867, Walter Bagehot —often quoted, I know—remarked:
"Treaties are quite as important as most laws, and to require the elaborate assent of representative assemblies to every word of the law, and not to consult them even as to the essence of the treaty, is prima facie ludicrous."
Personally, I am with Bagehot; perhaps the Minister can tell us why he is not?
Baroness Coussins Crossbench 5:38 pm, 8th September 2020
My Lords, I have two points. The first concerns the human rights clause in trade agreements. Our continuity agreements have kept the human rights clause from the FTAs we have been part of through the EU. However, when they are developed into full FTAs, will the Government go further than the EU's vague and non-binding clause and add rigorous monitoring and annual review process with NGO input and penalties for unacceptable practices? There is precedent: the FTA between Canada and Colombia included an annual review because of Colombia's poor human rights record. The UK should make this non-negotiable. Will the Minister agree to give this serious consideration?
My second point concerns the importance of language skills in negotiating agreements and supporting businesses to grow their export markets. I declare interests as co-chair of the APPG on Modern Languages and vice-president of the Chartered Institute of Linguists. The Government assume that English alone will suffice in trade negotiations, with back-up from professional interpreters where necessary. However, for 40-plus years, EU officials have negotiated our trade agreements and UK nationals have been dramatically underrepresented among them, largely because so few had the required language skills to compete for posts. Negotiations with Egypt, Mexico, Vietnam or Turkey, for example, would be hugely improved if DIT officials had some facility with relevant languages. What, if any, assessment of current and future language needs has been made?
This Bill also creates the mechanism to help businesses in their export drive. Does the Minister agree that language and communication skills should be at the heart of the data collection and bespoke exporting promotion activities triggered by the Bill? Lack of language skills, local knowledge and cultural understanding are barriers to export growth. The CBI says that languages are critical for the UK's global competitiveness, but the economy is losing over £50 billion a year in lost contracts because of the languages deficit. If you cannot read the initial tender documents, you cannot bid for the contract, and they are by no means always written in English.
UK businesses are largely in an anglophone bubble, with 83% of SMEs operating only in English, and the biggest language deficits are for the fastest-growing markets. By contrast, SMEs that invest in language skills can increase the ratio of exports to sales by 37%. To be sustainable, UK businesses must be encouraged and incentivised to invest in language skills and not just adopt a quick-fix approach through Google Translate or using native speakers as and when needed.
Therefore, will the Government set an example with multilingual trade negotiators and use this Bill to get businesses out of their anglophone bubble and into a multilingual 21st century where speaking only English is as much a disadvantage as speaking no English?
Lord Sheikh Conservative 5:41 pm, 8th September 2020
My Lords, I congratulate my noble friend the Minister on his appointment and excellent maiden speech. He brings a breadth of experience and expertise to your Lordships' House.
I support this Bill, which, while being fundamentally about continuity, is also about redefining and strengthening our trading relationships across the world. Today, I am particularly interested in what this means for the emerging and frontier markets that are among our growing trading partners.
I have been actively involved in promoting trade and investment with other countries and have volunteered to deliver keynote speeches at multiple high-level conferences organised by DMA Invest in London, including with the Governments of Tunisia, Morocco, Sudan, Nigeria, Ethiopia and Papua New Guinea.
I have witnessed an appetite to do business with the United Kingdom on the part of overseas countries. Following my visit to Tajikistan last year, where I was a guest of our ambassador, we have begun organising the first Tajikistan summit for next year. We have a series of engagements with the Government of Nepal beginning with a great conference this month, and I would be pleased if my noble friend the Minister would accept my invitation to speak at it. We are also in discussion with two other embassies about the possibility of future events.
Over the past few years, the importance of economic co-operation and bilateral relations has become more prevalent. The UK is a leader in development and a powerhouse of trade and diplomacy. We have 280 overseas missions, including embassies and high commissions. On my visits overseas, I have seen how the DIT is increasingly geared to actively promote trade and deliver excellent training of people's business skills.
Following the recent merger of DfID and the FCO, this Bill enables us to streamline our global strategy further, focusing in particular on how we can tackle the climate crisis, inequality and the pandemic collectively. This Bill will reflect our commitment to fair trade and improving access to markets for developing countries. We need to ensure that we have the correct tariffs to support the import of added-value products successfully and fairly.
In making it easier to do business, we cannot ignore our environmental commitments. We must promote green energy, the development of green technology and green skills. That is how we can inspire environmental incentives not just to maintain standards, but to improve them, and accelerate our environmentally friendly business activities in the UK and abroad. We have a great deal of knowledge and expertise on Islamic finance, and we must actively promote the industry overseas, which would result in mutual benefits. In this regard, I declare that I co-chair the APPG on Islamic finance.
In conclusion, the Trade Bill is about opportunity—the opportunity to achieve inclusive growth by building deeper partnerships with emerging markets, to strengthen our involvement internationally and to commit meaningfully to sustainability.
Baroness Bryan of Partick Labour 5:46 pm, 8th September 2020
My Lords, I add my congratulations to both maiden speeches made today. The Bill, along with legislation on agriculture, fisheries and the environment, and tomorrow's Bill on the UK internal market, is throwing up questions about the UK's constitutional settlement that will have to be addressed, not least for the people of Northern Ireland, who must feel they are being used as bargaining chips.
At some point soon, we will have to adjust our constitution to deal with the reality that, after 20 years of devolution, we have not resolved some basic questions of intergovernmental relations. Good trade agreements will be vital for the UK's future, and to ensure widespread support we must have transparency, the ability to scrutinise and the meaningful involvement of the devolved Administrations.
The Constitution Committee said in its report on parliamentary scrutiny of treaties in April last year that tensions are "inevitable" but
"if problems with the inter-governmental machinery had been addressed at an earlier stage, some of them might have been ameliorated."
Devolved competences must be respected, and the devolved legislatures should be able to undertake meaningful scrutiny of the treaties that will affect them. The best means of ensuring this is by the devolved Administrations' participation in the negotiation. Does the Minister accept this? Will the Government stop acting as if devolution had never happened? Will they accept that we are a semi-federal and not a unitary state?
The devolved Administrations must be able to defend their economy, protect their environment and food standards, safeguard their health services and fulfil the commitments that they have made to their electorate. As the Bill stands, this is not allowed to happen.
Lord Bourne of Aberystwyth Conservative 5:49 pm, 8th September 2020
My Lords, it is a great pleasure to follow the noble Baroness, Lady Bryan, who speaks with great authority on devolved issues. I compliment my noble friend Lord Grimstone and the right reverend Prelate the Bishop of Blackburn on exemplary maiden speeches. I look forward to hearing from them in the future.
What the Bill does is substantially non-controversial, in a sense. It is appropriate that we should have access to public procurement of £1.3 trillion, that we have power to implement trade agreements, that we have a new body to protect against unfair trade practices—the Trade Remedies Authority—and that the HMRC is able to collect and share data on exporters.
It is the dogs that do not bark in the Bill that are likely to provide the pinch points, if I may be forgiven for mixing a metaphor: things that should not be left to the end of a trade agreement, where it is a negative procedure, ex post facto. Some things are clearly important to this country; the United Kingdom has so often led the world—and clearly therefore led the EU—on such matters as the National Health Service, climate change, the environment, animal welfare, employment protection, intellectual property and food safety. These are crucial areas and I look forward to hearing how my noble friend sees us ensuring proper parliamentary input. As we take back control, we need to provide for that input on how we are going to represent the interests of both Houses of Parliament, although the Commons is clearly central to that. I look forward to hearing about that key area.
I want to say something about the devolved Administrations and the trade issues touched on by the noble Lord, Lord Wigley, the noble and learned Lord, Lord Hope of Craighead, and the noble Baroness, Lady Bryan. These areas are important and although they are substantially non-devolved—they are reserved areas—there are, of course, as noble and learned Lord, Lord Hope, said, fuzzy areas where there is a legitimate interest and a competence resting with the devolved authorities, and we need to provide for that. Just yesterday, I was proud to be at the launch of a new all-party parliamentary group on Wales and the wider world. It is actually chaired by a Conservative, the honourable Member for Montgomeryshire, Craig Williams, but it has input from Plaid Cymru, Labour and the Liberal Democrats and is a model of how these things can be carried forward. The first meeting linked up with the Welsh Parliament and the Minister there, our own noble Baroness, Lady Morgan of Ely. That is the way forward on such things to make sure we are providing for proper partnership working. In the new world outside the EU, this will be very important.
So I support the legislation, as far as it goes, and I look forward to hearing what the Minister has to say about providing parliamentary input on the key areas I mentioned, including my suggestion about how we work with the devolved Administrations.
Baroness Kidron Crossbench 5:52 pm, 8th September 2020
My Lords, we are to be an independent trading nation, but while the terms upon which that happens are deeply contested, I am sure there is not one iota of disagreement that we must safeguard the UK's children. However, it seems that the Trade Bill and the trade agreements it enables are a threat to our children from an unexpected quarter. I declare my interest as chair of the 5Rights Foundation.
The UK has committed to creating a safe online environment for children. The age-appropriate design code successfully completed its parliamentary passage only last week, and the online harms Bill is promised by the Government this Session, with protections from a range of issues: from child sexual abuse and pornography to hate speech, promoting suicide and self-harm, and so on. It is widely expected to make the UK the most advanced country in the world for child online safety, but as we build a better digital world for children, the power of the tech sector is impacting on US trade agreements. This was visible during President Obama's Administration, with TTIP and the failed EU deal, and is now fully realised in the Trump era.
Recent deals have seen Japan, Korea, Mexico and Canada forced to adopt the broad online platform liability waiver, Section 230, and an obligation to allow free flow of data as a trade right, thereby locking in the wild-west, anything-goes policies and a yawning absence of basic data privacy protections and asymmetric benefits from data flow. The Prime Minister has expressed his concern that a proliferation of non-tariff barriers is
"letting the air out of the tyres of the world economy", but I do not believe for a moment that he means to characterise the safety, privacy and security of our children as non-tariff barriers. He has staked his reputation on the UK's sovereignty and I believe that parents up and down the country expect that to include an explicit commitment to protections for the UK's children.
Others have made the case that any trade deal should be subject to parliamentary oversight but, at a minimum, the Bill must give our negotiators a power and the explicit instruction to demand full carve-outs for our domestic priorities. This would, in the case of a UK-US trade deal, give negotiators the authority to carve out existing and future UK domestic legislation that protects children, and the underlying legislation and policies upon which those laws are built.
I warmly welcome the Minister to the House, and I thank him for his letter, in which he stated that the objective is to ensure that the Government maintain their ability to protect users, including children, from emerging online harms. However, this welcome objective needs an amendment to the Bill, delegating an authority and an obligation to preserve domestic legislation and related policies that enact the social goals and values of the UK as they relate to children. Such an addition to the Bill will carry weight through the inevitable conflicts of future trade agreements, and send the clear message that, with respect to the protection of children, the UK is not for sale.
Lord Haskel Deputy Chairman of Committees, Deputy Speaker (Lords) 5:56 pm, 8th September 2020
Like other noble Lords, I am concerned about parliamentary scrutiny of trade agreements. As I see it, in parliamentary terms, at present these treaties are subject only to a negative procedure, with no guarantee of debate. The Government are using royal prerogative powers and the Minister is presenting this Bill as a continuity Bill—my Lords, this is clearly inadequate.
At the very least, there should be an affirmative procedure process, together with the statutory debate that goes with it. This should take place when negotiations are opened, so that Parliament can exercise influence then, and again before signature, to provide a last chance for change. These checks and balances are an essential part of our democratic system. As I understand it, unless these arrangements are changed, it is too late for Parliament to influence arrangements with the EU, the USA, Australia and New Zealand, because these have already been launched with a simple statement. Consultation is not a substitute for scrutiny, as my noble friend Lord Stevenson said.
In the other place, the Government opposed this additional scrutiny and said that Parliament gets its say when we deal with implementation, but that is too late. It is too late because trade agreements are not just economic matters: as my noble friend Lord Wood explained, they are strategic and geopolitical. They are an expression of the social and environmental values mentioned by other noble Lords. Therefore, Ministers should lay their negotiating objectives in these trade agreements before Parliament and debate them. There are also practical considerations, which affect the health, safety and security of every one of us in this country.
Of course, we have to maintain our political and economic independence, but we face the same long-term threats and global challenges as many of our trading partners: threats from China and Russia, and instability in the Middle East. Our largest trading partners are our most reliable partners in facing up to these threats.
The Government have already recognised the strategic importance of operating with our trading partners through the Project Defend strategy. The strategy seems to have concluded that we will not generally go it alone, especially when the pandemic has exposed our dependence on imports of critical goods, as the noble Lord, Lord Alton, explained. Presumably, our new freedom to use state aid will be directed to increasing our resilience by incentivising UK companies to make some of these critical products. Again, this is a strategy which impacts our trade agreements, requiring careful parliamentary scrutiny to ensure that the groundwork for this aspect of our trade deals has been properly done.
In the other place, the Government did not allow amendments enabling this scrutiny. I hope they will think again in this House, and I look forward to debating the promised amendments in Committee.
Baroness Blower Labour 5:59 pm, 8th September 2020
My Lords, it is always interesting to hear maiden speeches and I particularly enjoyed the speech of the right reverend Prelate, focusing on equality.
As my noble friend Lord Stevenson indicated, there are significant gaps in this Bill. We will hope and expect to remedy these with amendments as the Bill progresses. I note that the Government's own amendment on gender equality, which featured in the previous Bill in 2019, is now gone, stripped out from the current Bill. It is fervently to be hoped that this disappearance is not an indication of misogynist tendencies in either the UK Government or any person from Australia, or anywhere else, who may be invited to advise on trade. Gender equality must be, and must remain, a priority.
It is well known too, of course, that workplaces in which workers are organised in and by trade unions are safer places to work. As we face not just this Trade Bill but the ongoing Covid pandemic, health and safety at work—a bread-and-butter issue for trade unions—needs to be uppermost in our minds and policy.
The issues of food quality, animal welfare and environmental protection, especially given climate change and the global climate emergency we face—argued but rebuffed in another place—will no doubt return in this House's Committee stage. Crucially, too, we will argue for trade union rights of workers, not just from the health and safety perspective, vital though that is, but on fair pay and decent working conditions.
Those workers whose contribution to fighting the coronavirus in our NHS was so warmly applauded must be acknowledged not just in pay but by securing the future of the NHS as a public service, publicly funded and publicly provided, free from the ravages of predatory privatisation. I note that the Minister asserted that the NHS will not be for sale. I therefore look forward to the protection of the NHS being enshrined in legislation.
What is needed from a Trade Bill are detailed policies to protect workers' rights and to secure the supply chain, as well as to tackle global challenges. As we face a jobs crisis wrought by the Covid crisis, this Bill must ensure that trade plays its part in ensuring sustainable jobs in the workplace, where all ILO conventions and trade union rights are respected and promoted.
Baroness Noakes Conservative 6:03 pm, 8th September 2020
My Lords, I am pleased to support the Trade Bill today and to welcome my noble friend the Minister to the Dispatch Box. I am an unapologetic free trade enthusiast. Free trade is a foundation stone of a prosperous economy, which in turn is a precondition for sustainable reductions in poverty and inequality. At the end of the day, fetters on free trade and protectionism are GDP destructive and we should always seek to avoid them.
I did not take part in the deliberations on the trade Bill introduced in the last Parliament. At that time, Parliament was barely functioning, and the Bill was sabotaged in your Lordships' House with various amendments that meant that it could not proceed further. Many of the same arguments were rehearsed in another place when this Bill was considered, and the other place, by large majorities, rejected the proposed amendments. There is of course nothing to stop your Lordships' House asking the other place to think again, but noble Lords must know that the chances of a different outcome are vanishingly small. I hope noble Lords will want to avoid creating an impression in the country at large that our House is simply out of touch with political realities.
In addition, I hope noble Lords will recognise that amendments that seek to constrain imports of agricultural goods and impose restrictions on free trade agreements in relation to the NHS have not only been rejected in the other place but are completely unnecessary. The Government's policy on both areas is clear and, in the case of agriculture, is backed up by the new Trade and Agriculture Commission.
In Grand Committee yesterday, we debated the role of Parliament in treaty scrutiny, and it is clear from today's debate that there will be attempts to change this Bill to give Parliament more powers, as your Lordships sought to do in the last trade Bill. Leaving aside the facts that this Bill modestly covers only continuity treaties, and that our existing, long-standing scrutiny processes have served us well enough in the past, I remind the House that this too was defeated in the other place.
While I am a big fan of the Government's trade policies, I am going to sound one note of caution about the Bill's information powers, of which I am instinctively wary. I shall want to explore in Committee whether the provision of information to HMRC under Clause 7 really is voluntary, as the Minister in the other place has claimed, and whether the information disclosure provisions are proportionate. However, I have no intention of spoiling my noble friend the Minister's day, and I reiterate my support for this Bill.
Lord Hendy Labour 6:06 pm, 8th September 2020
My Lords, I offer my congratulations on the two maiden speeches today and thank the right reverend Prelate for reminding us of, among other things, the importance of human rights and our duty to protect those who lack power.
Members of your Lordships' House have raised many matters of concern in relation to the Bill, not least the lack of parliamentary scrutiny. I wish to raise three issues, touched on by others. The first is ISDS arrangements, or investor-state dispute settlement arrangements, such as the tribunal established in the Comprehensive and Economic Trade Agreement with Canada. Originally, ISDS arrangements were set up to give a right of action to investors from developed countries sceptical of enforcing their contracts in states with underdeveloped judicial systems and laws. ISDS has now become a monster, where the decisions of and laws passed by democratic states are under threat of claims for millions, and even billions, of dollars from foreign corporations.
The Minister said in opening the debate that free trade agreements "cannot change UK law". That is true, but they can override UK law. This is an intolerable threat to the supremacy of Parliament and the rule of law—an issue with which this Government seem to have real difficulties, as events today highlight. ISDS rests on explicit discrimination, incompatible with the European Convention on Human Rights, against our citizens, investors or not, who have no right of access to ISDS tribunals. Only foreign investors have that special and unjustifiable privilege.
The second point I wish to raise is that it is appropriate that the Bill should ensure that existing rights are protected. In relation to our labour laws, in free trade agreements there must be better protection for UK labour standards than at present. I echo the wider point made by the noble Baroness, Lady Coussins: the Bill should ensure that other state parties to free trade agreements, and indeed the UK itself, do not obtain competitive advantage by failing to comply with fundamental ILO conventions and other international treaty obligations.
The third concern is that the government procurement agreement, or GPA, should ensure that public authorities in the UK, including the devolved Administrations, have the right and power to impose public procurement conditions that require contractors to observe the current requirements of UK labour law and the ILO conventions ratified by the UK. Such conditions are permitted by current law, which has been established by EU directives on the subject, but with Brexit that might change. It would be good if the Minister were able to give us reassurances on those three points.
Viscount Trenchard Conservative 6:10 pm, 8th September 2020
My Lords, I too congratulate my noble friend Lord Grimstone of Boscobel and the right reverend Prelate the Bishop of Blackburn on their excellent maiden speeches. I have known my noble friend for very many years since we worked together under the British invisible exports programme in the 1980s. I look forward to assisting him in taking the Bill through the House and to many future contributions by him and by the right reverend Prelate.
I believe that the powers contained in the Bill to join the GPA, to enter into continuity trade agreements and to set up and supervise the new Trade Remedies Authority are appropriate and proportionate. One benefit of Brexit is that we will resume our place on the world stage as an independent trading nation and a leading advocate at the WTO and other international fora of rules-based, free and fair trade. This is the way to build maximum prosperity for all our people and indeed for our trading partners.
It is right that we should not try to restrict access to public procurement projects to British firms alone, although under the rules of the GPA we will be free to restrict access for foreign companies where there is a good reason to do so. In the main, exposing British firms to international competition helps keep them competitive, both to their benefit and to that of the taxpayer. British firms obviously enjoy an advantage in domestic bids, and I believe that many of our successful businesses will also continue to win a significant number of contracts in the international public procurement market, worth around £1.3 trillion a year.
The Bill provides the Government and the devolved Administrations with the necessary powers to implement the changes in domestic law necessary to implement continuity free trade agreements. As my right honourable friend the Secretary of State said in her Second Reading speech in another place, the Government have defied the sceptics by already signing 20 such FTAs, representing 48 countries and 74% of continuity trade, and are making good progress on enhanced or new FTA negotiations with Japan, the United States, Australia and New Zealand.
I was very pleased to hear that the Government are also prioritising accession to the CPTPP, which will provide a framework for improved access to its members' markets for British exporters, including agricultural exports. Can the Minister tell the House when he expects formally to apply for accession? In my 11 years as a resident of Japan, I noticed that the Japanese do not eat much cheese, especially blue cheese such as Stilton. I doubt that delaying further the successful conclusion of our bilateral FTA with Japan in order to sell it more cheese would be in our interests, especially because it has provided significant market access for such products through the CPTPP.
I welcome the other provisions in the Bill—those establishing the Trade Remedies Authority and the provision that sensibly enables the Government to collect and share data. I look forward to the contributions of other noble Lords and to the Minister's reply.
Baroness Henig Deputy Chairman of Committees, Deputy Speaker (Lords) 6:14 pm, 8th September 2020
My Lords, I too welcome the Minister and the right reverend Prelate the Bishop of Blackburn to the House, and I congratulate both on their maiden speeches.
In post-Brexit Britain we should expect this Trade Bill to be a landmark piece of legislation. It will be a major element of global Britain, laying the groundwork for ambitious trade deals, which we are told will follow our EU exit. Therefore, one objective of the Bill should surely be to establish an enduring framework for future trade negotiations, to secure as wide a consensus as possible.
In setting trade mandates, we should expect to see extensive consultation with businesses, representative bodies, consumer groups and all those likely to be affected by the treaty in question. Negotiating objectives should be agreed with Parliament and the devolved Administrations, with provisions for regular progress reports and the chance to scrutinise the draft treaties. Surely both Houses and the devolved Administrations would debate and vote on the final treaty. We could expect the whole process to be at least as comprehensive and transparent as under the EU, but now also including provisions to uphold the high environmental, food safety and animal welfare standards established in the UK.
I have to say that the reality falls short, not just compared with what happened when we were a member of the EU but as set against the way that other major trading nations, such as the US or Australia, conduct and oversee their trade deals. This Trade Bill is very limited. The Minister has argued that that is because it is concerned only with the rollover of existing trade treaties, but the Bill will inevitably set important precedents for the future. Its current contents show that "taking back control" applies only to the Government, with negligible input from Parliament, the devolved Administrations or extra-parliamentary groups such as farmers, industrialists, business or consumer bodies. This does not bode well for future trade policy and will not lead to successful trade deals.
Amendments are required in four areas, first and foremost to include wide consultation with a range of bodies to feed into the drawing up of trade mandates—interest groups that could track progress and add their weight and insights as negotiations proceed. If our trade policy is to be effective, it has to mobilise as broad a constituency as possible and not, as now, be shrouded in the utmost secrecy.
Secondly, it is urgent that we clarify the role and input of the Welsh, Scottish and Northern Irish Administrations, with clear indications of when and how they feed into the legislative process.
Thirdly, there has to be a meaningful role for Parliament. Parliament should be seen as a partner in negotiations, an important sounding board and indeed a useful weapon when negotiations get tough.
Fourthly, on standards, we are going backwards. The previous Trade Bill on Report had clauses upholding a range of standards as a result of discussions held between the then Trade Minister and a number of us from across the House. Those clauses have disappeared. What has happened to them? Some Members have argued that such clauses would fall foul of WTO rules. I point out that that depends on how they are interpreted; the relevant provisions can be and are interpreted flexibly by our trade competitors, and are not the great obstacles that ardent Brexiteers would have us believe. As we know, there is also growing pressure from the public for the Bill to provide protections for the NHS by excluding it from the scope of trade negotiations.
So the Bill as it stands is inadequate and, in many areas, unacceptably limited. It needs amendment, and I look forward to further debate in Committee.
Baroness Morris of Bolton Deputy Chairman of Committees, Deputy Speaker (Lords)
As the noble Earl, Lord Shrewsbury, has withdrawn, I call the noble Lord, Lord Judd.
Lord Judd Labour 6:18 pm, 8th September 2020
My Lords, the Bill is central to the kind of role that we want for Britain in the world. Of course we need trading partners but, in the interests of people who live in the UK, an open and constructive system of world trade, not self-destructive, short-sighted, self-interested trade, is vital.
There is an intricate matrix of interrelated issues, including military security, the vital issues of Ireland, human rights and the best way to protect and enhance the working environment here in the UK and the protection of the role of trade unions. There are food standards and agricultural production, the problems of pesticides and antibiotics and animal husbandry and welfare.
Overseas development will be a real test of the new merged department. We do not want to slip into a system of encouraging cash crops or cheap crops for consumers at the expense of the self-sustaining agricultural development vital for these countries.
We must consider climate change, the environment and biodiversity, and ensure that everything that is done is done in harmony with our undertakings and commitments in the Paris climate agreement. We must, of course, preserve the health service—the health service that Nye Bevan fought for, not a health service emaciated by back-door privatisation. We must judge purchasing policy, keeping prices low and encouraging generic medicines. We must beware of marginal advances in trade at the expense of failure to cut emissions and protect nature and the environment. I believe strongly that we need to continue the European Union principle of inherent precautionary principles.
For all these reasons and their interrelationship, scrutiny is absolutely vital, and we must not skimp on it. With such a significant Bill being introduced, it is amazing that noble Lords should be limited to three minutes in this debate; it makes a mockery. Are we about real politics and a real contribution to the well-being of the country, or are we about synthetic, token politics? This is a crucial issue that must be faced.
Lord Holmes of Richmond Non-affiliated 6:22 pm, 8th September 2020
My Lords, I begin by congratulating my noble friend Lord Grimstone, the Minister, on his excellent maiden speech. With his customary modesty, he skated over a stellar career in financial services in the City of London. I also congratulate the right reverend Prelate the Bishop of Blackburn. He covered so many of the issues that we all must care about.
The Bill has a big title and there are at least 1.3 trillion reasons to support it. Many of the measures contained in it are appropriate and proportionate. But, very much like the noble Lord, Lord Bourne of Aberystwyth, I am interested in what is not in the Bill—as he put it, the dog that is as yet not barking. The noble Lord, Lord Clement-Jones, covered fabulously many of the points concerning technology and IT. In fact, he covered more in three minutes than an algorithm could have possibly got hold of, even a mutant one.
Similarly, I would like to go to the essence of what technology and transformation we need in trade if we are to enable the kind of change a nation state requires. To that end, I ask my noble friend the Minister what the Government are looking at in terms of a transformation of trade finance; supply chain visibility; the ability to connect physical goods with finance; and legal, regulatory and customs requirements—all in real time. Are the Government looking at a UK utility trade platform, which could spearhead our future dealings in this area and, if got right, be the envy of the world? To that end, I point the Minister to a report I published on distributed ledger technology a couple of years ago. I am also about to publish a report on reducing friction in international trade on exactly these points. What role does the Minister see for fintech and regtech to enable much of what the Bill is about, and perhaps our greatest asset: that of common law?
In short, I believe we have an extraordinary opportunity, if not an imperative, to deliver on e-gateways and frictionless trade flows and to become a 21st-century global trading nation. Does my noble friend the Minister agree? Will he also say what, if not in this Bill, the Government intend to bring forward to realise all these opportunities? If not this Bill, what Bill? If not now, when?
The Earl of Caithness Conservative 6:25 pm, 8th September 2020
My Lords, the UK is a world leader in setting ambitious climate and environmental targets, as well as in farm production and hygiene standards. It has made important progress in delivering many of them. Our ability to maintain and increase those standards remains at risk from investor-state dispute settlement clauses in trade agreements which allow foreign investors to sue national Governments for measures which harm their profits. Until now, the economic terms of trade deals have had full legal standing, while the environmental chapters of trade deals have tended to be non-binding and secondary in status to economic terms. From an investor's perspective, ISDS provisions can help ensure that new environmental measures do not interfere with their ability to trade but, as many noble Lords have said, that must change.
Trade rules ensure the right of nations to regulate and to require that goods and services reach specific standards for import, so long as those requirements are applied fairly. The Government must be able to set the right standards without fear of being sued.
I congratulate my noble friend Lord Grimstone of Boscobel on his appointment and excellent maiden speech. Would he agree that the UK should introduce into its trade agreements something like the inter-Mercosur agreement signed between Brazil, Argentina, Uruguay and Paraguay? It provides an alternative to ISDS provisions. It gives legal certainty to investors without granting expensive and unnecessary powers that threaten the Government's right to regulate. Such an agreement would seek to avoid disputes arising in the first place, through co-operation, mediation and risk mitigation. Investors would seek redress by taking complaints to a national ombudsman. As a last resort, a state-to-state dispute settlement process would be available.
Given how exposed the UK is to ISDS, how will the Government ensure that free trade agreements help the UK deliver on its world-leading climate and environmental goals and do not undermine the competitiveness of British industry as they transition to a net zero emissions economy? As there has been nothing in law to protect the Government from ISDS challenges in extraordinary circumstances, and nothing in our investment treaties to carve out exemptions for things such as public health, how will the Government ensure that the UK is protected from legal challenges brought under ISDS against policies introduced to protect jobs and public health during the Covid-19 pandemic? I gather these are now being laid with solicitors in order to sue this Government.
Baroness Bennett of Manor Castle Green 6:28 pm, 8th September 2020
My Lords, there is a tradition in the House of Lords that maiden speeches are received only with approval. Today I must break that tradition. While congratulating the noble Lord, Lord Grimstone of Boscobel, on his maiden speech, it was made by him as a Minister, for the Government, and expressed a philosophy that is urgently in need of explicit challenge.
In his introductory remarks, the Minister said that globalisation, trade and investment are the best routes to prosperity and peace. These sentiments attracted wide support during the debate, reflecting the 19th-century and earlier origins of the political philosophies that dominate in your Lordships' House. For the Liberal Democrats, the noble Baroness, Lady Kramer, said that free, open and fair trade is "the bedrock of our political movement". These are the antiquated ideas that gave us the world we have today, one wracked by poverty and inequality, facing a climate emergency and a nature crisis, a model that Covid-19 has helped expose as profoundly insecure and unstable.
Pursuing our current economic model, based on economic growth, multinational-dominated trade and the exploitation of vulnerable workers and nations, has given us a world in which one in nine people regularly goes to bed hungry. The planet is treated as a mine and a dumping ground—including the forest destruction to which the noble Baroness, Lady Boycott, referred. That destruction has been to the benefit of a few and not to the majority of the people on the planet.
In today's other maiden speech, which I commend, the right reverend Prelate said that he would work to ensure that the House heeded the needs of the poorest and most vulnerable communities, noting how many of those are in northern England. This region enjoyed a period of relative prosperity built on trade and on the backs of child labourers and exploited women workers, but that was at the cost of the impoverishment of what became Britain's colonial possessions, as the noble Earl, Lord Devon, noted earlier in his excellent speech. There is a chilling reminder of this period in the astonishing appointment of the former Prime Minister of Australia, Tony Abbott. He is now an adviser to the Board of Trade—or, to get into the full formalities, the Lords of the Committee of the Privy Council appointed for the consideration of all matters relating to Trade and Foreign Plantations. It seems we are not so much heading into the 21st century as the 18th.
However, there are positive possibilities. The Green Party believes that we need strong local economies in all parts of the world, built on a foundation of local independent businesses and co-operatives with money circulating around those economies, doing its work of meeting people's needs rather than the place of money in our trade-focused world, which is all too often concentrated uselessly in tax havens, with the financialisaton of more and more areas of life. It is a threat to the security of us all, as the increasingly regular arrival of financial crises has demonstrated.
Lord Trimble Conservative 6:31 pm, 8th September 2020
My Lords, in addressing the House at this stage of the evening I shall try to keep things as tight as I can, but there are some important points that I want to make. Obviously one would desire free trade on as wide a scale as possible. Whether we will get that, I am not sure. As to this legislation, really the same Bill has come back a number of times, so it will be very well construed.
I have one little curiosity about the Bill. First, I am a unionist, so the Acts of Union are significant. All the Acts of Union contain clauses on trade. Indeed, those clauses on trade in the Act of Union were part of the reason why some parts of the British Isles decided to form the United Kingdom. Perhaps we should send this message to Edinburgh as well.
With regard to Northern Ireland, there are a number of points of some difficulty. From our point of view, it is important that there is equality and non-discrimination in trade matters. There are also things that we require in Northern Ireland, particularly the Northern Ireland protocol; it is not something that I welcome, but it is now in legislation and that is that. However, the protocol is internally inconsistent and needs clarification. I think that what has been leaked about the Government's intention and all the rest of it is built on that. If one looks at the protocol, there is no doubt that it needs to be dealt with.
There is another factor that we need to look at. It was touched on in an earlier speech. It is that trade powers are now moving from Brussels to London. What are we going to do when they come to us? What are we going to do with the relationship between the Government and the devolved institutions? That should be looked at very carefully indeed. We probably have to draw a distinction between things that are trade-related and things that are not in the powers that have come to London from Brussels.
Lord Inglewood Non-affiliated 6:35 pm, 8th September 2020
My Lords, I must begin like other Members of your Lordships' House by congratulating the Minister and my southern neighbour, the right reverend Prelate the Bishop of Blackburn, on their maiden speeches. My short remarks will be focused on my roles, first, as chair of the Cumbria Local Enterprise Partnership and, secondly, as a UK parliamentarian.
Cumbria has been identified as one of the most seriously affected parts of England in the event of a no-deal Brexit. Livelihoods, jobs and standards of living depend on trade; its curtailment would be self-indulgent and gratuitous, and the consequences of that would be very damaging and hurtful to a lot of people who are least able to deal with it.
As a UK parliamentarian who was once a Member of the European Parliament, it seems to me that the role played by this Parliament in the matters under discussion is shabby and—as I intimated in Grand Committee yesterday—quite inadequate. In an era when so much domestic policy, and hence legislation, is forged not in Westminster but elsewhere around the globe, Parliament must press this, not least to honour its historic responsibilities to this jurisdiction.
Setting aside the question of whether it is appropriate for trade negotiations to be conducted under the royal prerogative—this can of course be changed by legislation—the Government are fully accountable to Parliament for their action both within and without their own jurisdiction. For hundreds of years, Parliament has had a responsibility for how government policies are implemented and put into legislation within this jurisdiction, regardless of where they were conceived. This makes the Hobson's choice approach to treaty ratification and putting statutory instruments on the statute book an entirely unacceptable form of parliamentary procedure.
A number of speakers have argued for a range of matters to be put into the Bill—an approach widely supported in the country. As we have heard, the Government's response is that they are already the law of the land, so it is unnecessary. However, this ignores the widespread suspicion that the Government may, at a stroke, rewrite the rules, possibly using the short- hand form of legislation that I have just described. Parliamentarians and politicians are not trusted, and Governments are trusted least of all. The sad truth is that the more the Government reiterate their mantra, the more distrusted they become. It is a matter of credibility, which is slow in coming at this point.
For me, two priorities have emerged from this debate: first, the wheels of commerce must be kept turning, and, secondly, the way in which Parliament handles these matters must be reformed.
Lord Lansley Conservative 6:37 pm, 8th September 2020
My Lords, so many speeches, so much good material—I have often wanted to hear more. I am sure that during the passage of the Bill we will indeed hear more from our Second Reading speakers on the issues raised today. In particular, I look forward to hearing more from our two maiden speakers. I hope that the right reverend Prelate the Bishop of Blackburn will follow up on what he had to say about human rights when we initiate a discussion on the unilateral scheme of preferences. This is not in the Bill. It was in the Taxation (Cross-border Trade) Act 2018, which we did not have the opportunity to debate since it was a money Bill, as noble Lords will recall. I hope that we will get an opportunity to debate it during the passage of this Bill; it raises issues of human rights.
I was delighted to hear the maiden speech of my noble friend on the Front Bench. He bowled his maiden over excellently, took wickets, and now joins the little club of former private secretaries who have themselves become Ministers. I hope he enjoys it as much as I did.
I share with the noble Baroness, Lady Noakes, her support for free trade. However, unconstrained global trade is as dangerous as unconstrained competition in a domestic economy. We need the WTO; we need it to work. We need plurilateral agreements such as the government procurement agreement that we have been talking about, but we need more; we need agreements on services, digital trade, intellectual property and beyond. We need the WTO to make that happen. We should not think about trade simply in terms of bilateral agreements. We are looking to be in the regional agreement for the Pacific. Frankly, I hope we will get an agreement with the EU that helps us to create a regional European market, operating together in support of free trade. I hope we will talk much more about trade during the passage of this Bill.
On the issue of scrutiny, and thinking back to the last Bill, many noble Lords in this debate have not quite understood. We got the commitments we were looking for from the Government on how they would go about the process of scrutinising free trade agreements. They published them in February 2019. I hope my noble friend will reiterate that that is the Government's intention. He and I know that that is not the end of the story; we will be looking for further commitments. There is some limited statutory underpinning.
A number of noble Lords have referred to my honourable friend and parliamentary neighbour when I was in the other place, Jonathan Djanogly. His new Clause 4 on Report in the other place was not wholly right, in my view, but I hope we pick up elements of it relating to the process of scrutiny, leading to ratification. Taking the point from my noble friend, there are amendments we can make here that they may look kindly on in the other place.
Baroness Hayman Crossbench 6:40 pm, 8th September 2020
My Lords, as the final Back-Bench speaker after a wide range of fascinating contributions, not least two outstanding maiden speeches, it is tempting to continue some of the arguments that have been made. However, I will be disciplined, save to endorse the powerful contributions on the need for improved transparency, parliamentary scrutiny and protection for the NHS.
I want to focus on the need to ensure consistency between our domestic legislation and targets under the Climate Change Act 2008 in the Bill and in all the policies and legislation that the Government bring forward. This consistency is not simply a matter of domestic policy, but goes to the heart of our international commitments to tackle climate change and biodiversity loss. I am pleased that the Government recognise the need for this alignment when, for example, after cross-party efforts in this House, the Pension Schemes Bill was amended and now includes statutory powers to ensure that new regulations under the Act take account of our 2015 net zero target and obligations under international treaties, such as the Paris Agreement. The Back Benches have brought forward similar amendments on the Fisheries Bill and the Agriculture Bill—those will be further debated—but I urge the Government to assess all legislation for consistency with our climate goals, as a matter of both principle and good practice.
It is particularly important that our climate goals are included in the Bill, not only because it gives the opportunity to set a UK precedent that promotes a race to the top on environmental standards around the world, but because a trade policy that takes account of climate goals will also strengthen the UK's economic competitiveness, through export of low-carbon goods and services, a massively growing market in which we can excel.
The Bill gives us the opportunity to design trade policy to support the environmental ambitions to which the Government consistently asserts they are committed. The Prime Minister said earlier this year that "we will crack" the climate emergency. Including provisions in the Bill not only would be coherent with our domestic policies, but could be seminal in our international efforts in the run-up to COP 26 next year. I hope the Minister indicates a willingness to consider amendments to the Bill when he responds, very soon, to this debate.
Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade) 6:44 pm, 8th September 2020
My Lords, with neat symmetry, it is two years to the week that we again have a trade Bill before us. The Minister has been engaging and proactive since his appointment in the spring, and I personally appreciate his way of doing this. I can tell that he was a very successful member of a private office, because his own private office is supremely efficient and helpful in its engagement. He is the third Lords Minister during the passage of the Bill and its predecessor—it will be third time lucky for him, I am certain. Having been at the Dispatch Box a few times before his maiden speech, he is a rather experienced maiden already in this House, but his maiden speech and that of the right reverend Prelate were greatly welcomed, and justifiably so.
We on these Benches want the UK to prosper. We want free, open and fair trade based on rules around the world, to allow, as my noble friend Lady Burt said, our businesses to take advantage of opportunities to export, whether across the Channel or around the world. We want our consumers to have access to the fairest-priced and best-quality goods from anywhere, and we want the UK to lead an ethical trade, helping to implement the sustainable development goals and support human rights and supply change, ever driving up standards and supporting the least developed countries in the world so that they can develop and trade with us on an equal basis. I disagree respectfully with the noble Baroness, Lady Bennett of Manor Castle, who said that fair trade is antiquated. I do not agree, and I think many people will be disappointed to hear her say that. As Winston Churchill summed it up—when he was a Liberal:
"We want to have free competition upwards; we decline to allow free competition to run downwards."
It is a pleasure to follow the noble Baroness, Lady Hayman. Reflecting on her speech, it is sad to see that the Government have removed from the Bill their amendment to the predecessor Bill, which was new Clause 2, on guaranteeing standards. Can the Minister explain why they have done that?
Our support for free and open trade is a founding principle to our cause, as my noble friend Lady Kramer said. We ensured the repeal of the corn laws and the benefit for poorer consumers, and we opposed the protectionist tariff reform campaign of 1903 and split from the national Government in 1932 when the Conservatives introduced the Import Duties Act, with 10% tariffs all around. We supported the common trading market in Europe as a vehicle to advance global freer trade, and we saw the average UK import tariff rate fall from 7.9% in 1972 to part of the average EU tariff this year of 2.8%. It was the biggest and most continuous fall in British import tariff rates in a century.
Because Liberals believe in free, open and fair trade, we are anxious about the prospect of starting 2021 with the highest rates of trade barriers, tariffs and burdensome customs procedures for our businesses. The massive and unavoidable new friction on our trade with new customs red tape will, as HMRC itself has estimated, cost UK exporters £7 billion a year and those importing £7 billion a year. We know our borders will not be ready in January, so the Government have deferred export processes by six months to buy time. Why the need to buy time? It could be the reason contained in an email from HMRC on 30 July:
"To date, HMRC has made a total investment of £34 million available to support the sector, which has supported more than 20,000 training courses, nearly 15,000 units of IT and the recruitment of over 600 new customs agents."
At a cold reading of that your Lordships may be impressed, but Michael Gove said that we needed 50,000 customs agents by January next year. Spending £34 million has given us 600, a figure that is rather short of 50,000. If the Minister could say how many we have currently recruited, that would be welcome.
However, this was of course part of an indication that we would already have all our continuity trade agreements in place by March—March 2019, that is. Information on the Department for International Trade website today shows that the countries where we have continuity agreements, referred to by the Minister, represent £111 billion of UK trade in 2019. Total UK trade in goods and services in 2019 was £1.5 trillion. To put that into context, as we finish this Second Reading debate today, the UK is currently placed to trade on a free trade agreement basis that represents only 8% of our overall trade. This would be the worst trading relationship for the UK since 1932.
Some tout themselves as free-traders, but are happy to see a massive reduction in UK free-trading relationships and a massive increase in trading bureaucracy and costs. It is an irony that some Conservatives, who for three-quarters of a century proposed protectionism, were finally persuaded of reducing tariffs by entering the common market—our largest market—and now think that by leaving it, they can grow trade.
As referred to by my noble friend Lord Oates in his very lucid speech, some conservatives, such as Tony Abbott, think that the solution to this is to shed environmental and climate standards and to allow competition to run downwards, as Churchill put it. As a global ambassador for the UK approach to trade, his credentials make perfectly clear what he thinks. As the EU-Australia trade talks themselves show, the Australian Government have rebuffed Tony Abbott's call to leave the Paris Agreement because a deal with the EU would be impossible without it. However, Abbott told a global policy foundation in conference in London, in October 2017, that
"it's climate change policy that's doing harm; climate change itself is probably doing good".
Is that the attitude for a British adviser for 21st-century UK trade? I think he will probably be doing our country harm, not good.
We on these Benches were concerned that leaving the single market for services would potentially bring about capital flight and reduce competitiveness in our services sector. We were told by some that we were simply moaning and had basically no idea what we were talking about. The Government's slogan that we see at the moment—"Let's get going"—could have been used to describe what Barclays did last year, for example. A Reuters report notes that Barclays
"spent 100 to 200 million pounds… moving operations and staff out of Britain to prepare for Brexit, its UK chairman Gerry Grimstone said on Wednesday… Barclays has moved its European headquarters and almost 200 billion euros in assets to Dublin and last year began shifting 40 to 50 investment banking jobs to Frankfurt from London."
Mr Grimstone then said:
"We believe this will give us a competitive advantage on the continent".
Would the Minister please explain what the competitive advantage is from leaving London for Dublin or Frankfurt?
When it comes to scrutiny, much has been said. I simply want to give one example, because I thought the radical saboteur speech of the noble Lord, Lord Lansley, about wanting to improve this Bill was very constructive. On scrutiny and accountability, I will give one example of a measure that we ratified: the Japanese agreement. The simple fact is that for the Japanese agreement, which we ratified in Parliament, British parliamentarians sitting in the European Parliament had a greater say in the setting of the mandate for it, had access to materials through the negotiating rounds and had a say on its approval. British parliamentarians sitting in this Parliament for the new Japan agreement will not have the same say as those who sat in on the agreement that we have ratified ourselves. This cannot be right. Surely the Government, who want continuity on everything but not parliamentary accountability, have to make some movements. I hope that the Government will see sense and respond constructively to those requests.
We also want to see the wider aims of trade enveloped in our overall approach. That is why we believe very strongly in supporting the least developed countries to develop and in ethical trade, and we want to see improvements. My noble friend Lord Chidgey asked this question, but can the Minister explain why, for example, Kenya and the east African states have now been dropped from the list of those that are likely to see ratification? Why have the Government cut support to help countries implement continuity agreements that we ourselves asked them to put in place? Why has the Department for International Trade said that it has no responsibility for aid for trade and that that responsibility lies purely with the new Foreign, Commonwealth and Development Office?
We want to link our trade policy with an ambitious international strategy, but fundamentally this is about us and British businesses prospering. Therefore, we need to link our trade policy with an ambitious export strategy, so that British businesses can take advantage of new trading opportunities, whether with the US or Japan. The Government's paper itself said that with an American or Japanese trade deal, we would likely see only 0.16% growth.
I want to give a brief example before I conclude. The noble Lord, Lord Lilley, and others have indicated that we can now see great opportunities because we are out of the European Union. US trade census data shows that UK exports to the United States grew from $39 billion in 1999 to $63 billion in 2019. That is a 61% increase, which is great. French exports to America grew from $25 billion to $57 billion—a 123% increase. Over the same period, German exports to America grew by 131%. It has not been membership of the European Union that has held us back. Will the Government therefore link our trade policy with an export policy, because nowhere in the Japan or American deal was the word "deficit" included? We have a deficit with America of £5.9 billion in goods; France has a surplus of £18 billion and Germany has a surplus of £67 billion.
To address these points, we will seek to persuade noble Lords on sensible and proactive amendments to improve the Bill and to make it a better vehicle to support UK business and exports, to meet our international ambitions and to continuously reduce barriers. In his very welcome letter to me on 9 April, on his appointment, the Minister said that he believes in cross-party working and working as collaboratively as possible with noble Lords across the House. We agree with that: that is how we will conduct the Committee and Report stages of this Bill to make it better.
Lord Grantchester Opposition Whip (Lords), Shadow Spokesperson (Energy and Climate Change), Shadow Minister (Environment, Food and Rural Affairs), Shadow Spokesperson (Business, Energy and Industrial Strategy) 6:56 pm, 8th September 2020
My Lords, it could not be a more crucial time as the House begins its long Autumn session and the Government continue to progress of trade matters through your Lordships' House. Today marks the beginning of another round of talks with the UK's most important trading partner, the EU, and of this Second Reading, where once again the Government profess this Trade Bill to be one of continuity agreements.
I mention trade matters, but shortly to come the House will undertake the Report stage of the Agriculture Bill, where domestic standards on food will be reflected, with implications that can be assessed in later stages of this Bill. Tomorrow sees the publication of the UK internal market Bill, with provisions as yet unseen and possible state aid provisions. These pieces in the landscape need to be settled within the next five weeks, in which continuity and certainty with the EU must be delivered by this Government, despite their rhetoric of being able to walk away. After all, we have been assured that the Government have an oven-ready deal.
However, this is the Government's second attempt at a trade deal. As has been repeated throughout this excellent debate, speakers have a strong sense of déjà vu when dealing with this legislation: it has been only some 18 months since the first version of the Bill left this House. Peers on all sides were rightly proud of the progress made on the last Bill on standards, scrutiny, customs arrangements and EU agency collaboration. As the then Minister, the noble Baroness, Lady Fairhead, said,
"no legislation passes the scrutiny of this House without being improved … this is unquestionably true here."—[Official Report, 6/3/19; col. 615.]
That this Bill is stripped of these improvements is of great concern to the House. It is a backward step. The cry that this is merely a technical continuity Bill to deal with the inherited EU treaties fooled no one then and will not this time either. The same debates from 18 months ago remain the most poignant.
Since that Bill, and until recently, the Government have been operating without a Minister representing the Department for International Trade in this House. It has shown. That reflects the lack of direction from the Government. However, today gives me the first opportunity to welcome the new Minister, the noble Lord, Lord Grimstone, to the House and to his responsibilities on this Bill. I congratulate him on his maiden speech at such an important juncture. His background enables him to help steer the House to reach similarly important improvements. I look forward to these developments in later stages.
I thank my colleague on the Front Bench, my noble friend Lord Stevenson, for confirming Labour's challenge to the Minister and the Government. Labour welcomes the Bill as providing the legal mechanisms for trade agreements to continue operating after the implementation or transition period. However, it also accepts that many of the previous Bill's improvements need to be reflected in this Bill. This has been echoed around the Chamber today. Labour recognises the continuity imperative to formalise trading relationships with those third countries that have a trade agreement with the EU, given that the UK is no longer a member of the EU.
But this Bill needs to go further and underline the UK's approach to how it negotiates and concludes international trade agreements. That there are similarities to the previous Bill is but a starting point for fixing the many moving targets that have developed since, as the Government have responded to the many concerns. The recent announcement of the Board of Trade is but one example.
That the UK is taking back control of trade policy does not mean that this is the executive prerogative of the UK Government alone. Trade policy should be transparent and subject to full parliamentary scrutiny. The Bill fails to address the scrutiny deficit, which it must if continuing consent to trading relationships is to be maintained.
The new Trade Remedies Authority currently lacks stakeholder engagement, independence and accountability. My noble friend Lord Rooker is correct in comparing the TRA with the SFA. There is also no union representation on the TRA, nor in the new TAGs—trade advisory groups—recently introduced to replace the barely formed export trade advisory groups, or ETAGs. A prime aim of this legislation is to bolt down, in statutory form, the structures that cannot be dismissed at a whim by a Conservative Government back-tracking on past agreements. Explicit statutory enshrinement in the Bill of warm-sounding statements is a key objective in dealing with this Bill.
The debate today underlines to the Minister that the key changes to the last Bill are vital and necessary. These amendments will focus on protecting the National Health Service, as well as ensuring that climate change, environmental protection, food standards and human and workers' rights and equalities are at the heart of future trade agreements, which need to be consistent with international treaties.
The Bill must guarantee opportunities for small and medium-sized enterprises in procurement contracts, as trade will play a vital role in the economic recovery from Covid-19. That this comes at a time when the UK has suffered a record 20% drop in GDP in the second quarter of the year—double that of the average of 10% for major OECD economies—underlines the fragile nature of the UK economy and the need to be inclusive of the needs of all sections and industries throughout all the nations, provinces and regions of the UK, with their representatives in Parliament in meaningful dialogue. I congratulate the right reverend Prelate the Bishop of Blackburn on his maiden speech today, which celebrated Lancashire and the north-west and said that the voice of the north must be adequately heard.
Scrutinising treaties and agreements through the Constitutional Reform and Governance Act 2010 gives Parliament only a minimal role against the position when the UK was a member state with oversight in the European Parliament. Last night, the House gave a strong endorsement to improve structures such as the International Trade Select Committee in the Commons and the International Agreements Committee in your Lordships' House in a debate answered by the Minister of State for the Foreign, Commonwealth and Development Office. This was reflected repeatedly by speakers today, and issues will be subject to further thought for inclusion in the Bill. I congratulate the Minister on confirming that he and his department will do all they can to facilitate the early promise of the International Agreements Committee. It would be encouraging if he could welcome amendments crystallising these improvements.
The devolved Administrations are excluded from the provisions of the Constitutional Reform and Governance Act 2010, even though they are bound by all trade agreements. This means that no formal adequate consultation with them has to be considered. Importantly, their wishes might not be consistently reflected in the forthcoming, but as yet unseen, trade markets Bill, which is under the direction of the Department for Business, Energy and Industrial Strategy. What interdepartmental mechanisms are the Government setting up to help all these constitutional deliberations to be carried out at all government levels?
Even today, there must be serious concern for the union following the announcements of the UK's unilateral overriding of agreed treaty provisions in the withdrawal Act and the resignation today of Mr Jones, the head of the Government Legal Department. Can the Minister clarify the current status of the withdrawal Act? The fact that it is not only Labour that believes that Parliament should have the power to debate, amend and approve mandates, negotiations and outcomes needs to be addressed by the Minister. The involvement of the devolved Administrations in this relationship was drawn attention to in the remarks of the noble and learned Lord, Lord Hope.
Another key aspect of today's debate has been standards. This concerns not only food, environmental protections and animal welfare provisions but the standards reflected in ongoing participation in other areas with EU agencies, which are working closely with their UK counterparts. Indeed, what is the current status of the provisions in the multitude of chapters in the withdrawal Act and its supremacy over UK law?
Although this is a prominent issue, it is not merely a matter of answering serious questions about the Trade and Agriculture Commission. Climate change and equalities approaches should be central to all future trade policy considerations. The appointment of Mr Abbott to the Board of Trade, given his approach to climate change, does not sit comfortably with the need for compatibility with net-zero imperatives. The noble Baroness, Lady Boycott, was right to draw attention to the fact that a sustainability assessment must be included in trade deals.
The House will be keen to examine, through amendments, the Bill's implications, and such examination should include implications for the provisions of the slavery Act and equalities, as referred to by the noble Lord, Lord Alton. That is not to ignore many of the other issues that have been discussed, such as intellectual property rights, spoken to by the noble Lord, Lord Clement-Jones.
The Bill puts us a long way back from where we were. Also, it has not kept pace with developments since the House last considered these issues. The disappointment that stems from having to play out the same arguments for a second time is increased not only by the present disarray of the Government but by the complete lack of a bold, long-term vision for Britain to secure growth and recovery, protect rights and tackle global challenges through having its own trade policy. The UK is a strong trading nation, and this must be maintained.
Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy 7:08 pm, 8th September 2020
My Lords, I am extremely grateful for the kind words that have been expressed across the House about my maiden speech and for the warm welcome I have received from your Lordships. I was particularly pleased to hear the noble Lord, Lord McNally, refer to my emollient bedside manner, and the reference to Standard Life from the noble Lord, Lord McConnell. I have been greeted with great courtesy by noble Lord, Lord Stevenson. I feel that I have a very constructive relationship with him, and of course I have known the noble Lord, Lord Grantchester, for more years than he and I would probably care to remember. I always enjoy the noble Lord, Lord Purvis, teasing me about my previous jobs.
I join other noble Lords in congratulating the right reverend Prelate the Bishop of Blackburn. His comments on equality and human rights were pitched very nicely. I am delighted to welcome him to the House and have no doubt that it will benefit from his knowledge and experience.
This is the first piece of legislation that I will be guiding through this House and I look forward to working with noble Lords to deliver a Bill that provides some of the certainty that businesses so desperately need in these unprecedented times.
I am of course following in the footsteps of my noble friend Lady Fairhead, who was in this very same situation in the 2017-19 Session. She undertook that role with calmness, courtesy and expertise. I have heard various references to the constructive way in which she dealt with Peers, and I will try to follow in her footsteps in that regard.
This place has the benefit of being able to hear from many experts, and we have seen that in action today. Being a newcomer, I stand in awe of the knowledge that there is in your Lordships' House. I am particularly grateful today for the contributions that I heard from my noble friends Lady Neville-Rolfe and Lord Lansley, the noble Baronesses, Lady Henig, Lady Jones of Moulsecoomb and Lady Quin, and the noble Lord, Lord Wigley, among many others. I completely agree with the noble Baroness, Lady Coussins, about the need for language skills, and I endorse her views on that.
As ever, the considerable experience of this House will be invaluable in helping us to put in place an effective independent trade policy now that we have left the EU. I was pleased to hear support for the objectives of the Bill from a number of noble Lords, including my noble friends Lord Astor, Lord Lilley, Lady Hooper, Lord Taylor, Lord Risby, Lady Redfern, Lord Sheikh, Lady Noakes, Lord Trenchard and many others.
This has been a very wide-ranging debate and I will endeavour to respond to as many points as I can. I may not be able to address all of them in the time available, but of course my door is always open and I am happy to follow up individual points and questions from noble Lords.
We intend to join the GPA, as the House has heard, as an independent party on substantially the same terms as we had under EU membership. This approach will support a swift accession at the end of the transition period and preserve UK businesses' access to procurement opportunities covered by the GPA, which are estimated to be worth £1.3 trillion annually. My noble friend Lord Trenchard spoke convincingly about this.
The noble Baroness, Lady Burt, asked about SMEs in the GPA. Non-discrimination is the core principle of public procurement in the UK, and as such we do not have set-asides for SMEs in international agreements. We have an active policy agenda to facilitate SME participation in public procurement, and we will continue to advance that agenda as we accede to the GPA as an independent state.
A number of noble Lords, including my noble friend Lord Balfe and the noble Lords, Lord Oates and Lord Whitty, have raised concerns during this debate that the Government's continuity programme will reduce standards. I want again to be quite clear about this: now that we have left the EU, the UK will be the same country that it has always been—dependable, open and fair. The Government have been clear that we have no intention of lowering standards, and we have fulfilled this commitment through our deeds. None of the 20 agreements already signed has reduced standards in any area.
I recognise the strength of feeling that the issue of standards generates among colleagues on all sides of the House. We can see this during the current debates on the Agriculture Bill and we saw it during the debates on the Trade Bill 2017-19. As my right honourable friend the Secretary of State for International Trade and my Defra colleagues have said, this Government will stand firm in trade negotiations. We will always do the right thing by our farmers and aim to secure new opportunities for the industry. This Government will not dilute our high environment protection, animal welfare and food standards. I hope that noble Lords will be reassured that all imports, whether covered by a trade agreement or otherwise, have to comply with the import requirements as provided for under the WTO SPS agreement.
This is a highly regulated space. In the case of food safety, it will be the job of the food standards agencies to ensure that all food imports comply with the UK's high safety standards and that consumers are protected from unsafe food that does not meet those standards. Decisions on these standards are a matter solely for the UK and are made separately from any trade agreements. It is also important to note that our existing import standards already include a ban on using artificial growth hormones in domestic and imported products. They also prohibit anything other than potable water being used to decontaminate poultry carcasses.
These protections are already enshrined in our domestic statutes and the Government will be upholding them. Any changes to them would require new legislation to be brought before Parliament. Decisions around standards are a matter for Parliament and they cannot and will not be traded away in negotiations. We have been very clear that our high food safety standards will continue to apply to all food imports, and our priority is to ensure trade agreements benefit the whole UK, including consumers, farmers and businesses.
Some peers have also expressed concerns as to whether our continuity agreements will be consistent with specific international environmental obligations. The noble Baronesses, Lady Boycott, Lady Sheehan and Lady Hayman, and the noble Lord, Lord Oates, all talked about the climate emergency. I can confirm that all the EU agreements we are transitioning are fully compliant with all our international obligations, including the 2015 Paris Agreement on climate change. The same is true of human rights and labour rights. I hope this House will acknowledge the UK's strong history of defending human and labour rights, alongside promoting our values globally. The noble Baroness, Lady Coussins, spoke with passion on this, as did the noble Lord, Lord Hendy, on labour rights.
The noble Lord, Lord Holmes, talked about the benefits we will eventually get from operationalising FTAs. I will dwell on this for moment. It is easy to think that these are just pieces of paper, but their real worth comes when businesses large and small throughout the United Kingdom take advantage of them, hopefully using digital techniques and gaining benefit. That is why we are negotiating FTAs.
I will quickly deal with some of the specific questions raised by noble Lords. The noble Lord, Lord Clement-Jones, asked about intellectual property. As he will know, our intellectual property regime is consistently rated as one of the best in the world. One of our priorities will be to ensure that future trade agreements do not negatively impact on standards in this area and that our regime will promote trade in intellectual property.
My noble friend Lord Astor asked about trade envoys. I pay tribute to the role he has played as the Prime Minister's trade envoy to Oman. My noble friend asked when a newly appointed trade envoy will be announced. As he and I know, this is a train that has been a long time coming. While I cannot provide an exact date, I assure my noble friend that he will not have to wait very long.
The noble Viscount, Lord Waverley, asked for a quick update on FTA discussions with Turkey. We place a great deal of importance on our trading relationships with Turkey. Bilateral trade was worth over £18.6 billion in the four quarters to the end of June 2020. We want to protect those existing trade flows by replicating the current trading relationships as far as possible. However, Turkey's unique position of being in a customs union with the EU means that some of our future trading relationships will be influenced by the agreement we have reached with the EU. My trade colleagues are having good, positive discussions with Turkey, and I am convinced that eventually they will reach a favourable outcome.
The noble Lord, Lord Chidgey, asked for an update on the agreements with east and southern African countries. The UK, Southern African Customs Union member states and Mozambique continuity agreement was signed in October 2019 and passed CRaG in February 2020. It has not yet been fully ratified by all third countries that were signatories to the original agreement, but I am pleased to say that HMG in our local posts are working closely with local partners to support full ratification and implementation of this agreement.
My noble friend Lady Hooper asked about the EU-Mercosur agreement. This will not be in force before the end of the transition period, but we will look to discuss our future trade relationship bilaterally and collectively and to develop it further in due course.
The noble Viscount, Lord Trenchard, asked about the CPTPP—the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. I am pleased to say that all its members have now welcomed our interest in accession. We will decide whether and when to formally apply to join in light of these continuing engagements, the process of bilateral negotiations with CPTPP members and our confidence that we will be able to negotiate accession on terms compatible with our broader interests, which is, of course, the only basis on which we would want to join.
The noble Earl, Lord Lindsay, asked for reassurance about the important work that our standards agencies, including UKAS, do. I can confirm that we are very grateful for what they do, and that they will still play a large role in helping us deliver our trade agreements.
A number of noble Lords raised the important question of agriculture, and I totally understand. The Government recognise the importance of ensuring that the views of farmers, producers and consumers are able to inform trade policy. As we have heard during the debate, we have established a Trade and Agriculture Commission, following consultation with the industry, and we have a farming trade advisory group. I reassure the noble Earl, Lord Devon, that the membership of these groups is not secret: you can find it on GOV.UK. We are on the side of farmers, and the establishment of the commission has had overwhelming support from the National Farmers' Union and many others.
I realise there is a strong concern felt by certain noble Lords on animal welfare. Of course, this is laudable but, as noble Lords will appreciate, it is not within the gift of the UK Government to legislate for overseas countries. Indeed, legislating for higher agricultural production standards could have far-reaching, unintended consequences, which could harm the UK economy and our relationships with countries around the world, particularly our partners in the developing world.
We heard concerns from some noble Lords, including the noble Lords, Lord Balfe and Lord Judd, and the noble Baroness, Lady Blower, about the National Health Service. I reiterate yet again that our position is absolute: the NHS is not, and never will be, for sale to any company, anywhere. It will remain universal and free at the point of need, and no trade agreement will alter that fundamental principle. I noted carefully the points made about health data. I love the expression "mutant algorithms" from the noble Lord, Lord Freyberg, and I will draw his point to the attention of our negotiators.
ISDS is a subject which often causes excitement, and my noble friend Lord Caithness raised the issue during his contribution, as did the noble Lords, Lord Freyberg and Lord Hendy. I confirm that ISDS tribunals can never overrule the sovereignty of Parliament. They cannot overturn or force any changes to law; they can only award compensation if a foreign investor's rights under an international treaty, to which the UK is party, have been breached. ISDS cannot force the privatisation of public services. There has never been a successful ISDS claim against the United Kingdom, but our investors operating overseas have often benefited from these agreements.
I turn now to the question of parliamentary scrutiny. In relation to the continuity agreements, our objective, as noble Lords know, for transitioning EU third-country trade agreements has been to secure continuity in existing trading relationships. The original EU trade agreements have already been scrutinised, both by the European Parliament, on which the UK sat, and member state legislatures such as our own.
I know that last time a similar Bill was debated, noble Lords did so in the absence of any real-world example of how the continuity programme would work, but we are in a different position now. We have ensured that Parliament has had the opportunity to fully scrutinise all continuity trade agreements, and of the 20 we have signed so far, noble Lords have held three debates on six of them, and not one attracted a Motion to Regret. To clarify a point that the noble Baroness, Lady Tonge, made about the UK-Israel continuity agreement, it went through the CRaG process and concluded that process in March 2019.
Furthermore, to provide additional transparency for our programme, we have voluntarily adopted the proposal put forward during the passage of the Bill in the 2017-19 Session and laid a report alongside each transitioned trade agreement to explain to Parliament our approach to delivering continuity.
Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Digital, Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy and International Trade)
May I make a point that might help the discussion?
Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)
I regret that, under the current arrangements of the House, no interventions are permitted.
I regret that too.
I will be very happy to discuss that point with the noble Lord afterwards, if it would be of assistance.
Our continuity agreement treaty scrutiny arrangements received praise recently from the House of Lords EU Committee, which, in its recent report Treaty Scrutiny: Working Practices said:
"We encourage other Whitehall departments to follow the lead of the Department for International Trade and make similar commitments to ensure that other important agreements … are scrutinised just as effectively as trade agreements."
Praise indeed.
Many Peers raised issues in relation to parliamentary scrutiny of future free trade agreements. While, of course, the Trade Bill does not deal with these agreements, I recognise the importance that noble Lords attach to Parliament having proper oversight. As I said when I opened this debate, the implementation of such agreements will be subject to separate scrutiny arrangements. We will be publishing negotiation objectives, voluntarily publishing impact assessments before and after negotiations, keeping Parliament updated on negotiations and, at the end of negotiations, treaties will be subject to the usual ratification processes.
I know that a number of noble Lords do not share my view that the Constitutional Reform and Governance Act provides an effective and robust framework for scrutiny of all treaties that require ratification, but it has worked, it is the arrangement we have, and it is incumbent on all of us to make sure that the information we provide under CRaG is transparent and helpful and allows, in particular, the committees to do their work properly. The UK has scrutiny mechanisms via the CRaG procedure whereby Parliament can see exactly what we have negotiated and can, if it chooses, prevent ratification by voting against the treaty—in the case of the other place, it can do so indefinitely.
I stress that no trade agreement can, of itself, alter our domestic legislation. We will ensure that there will be a report, independent of government, published by the committees at the beginning of the CRaG process, that will assist parliamentarians and the public in understanding the implications of agreements. We have heard a number of comments from noble Lords about devolution. We have listened carefully to the concerns of the devolved Administrations and I am pleased that the Scottish Government have now recommended consent to the Bill. I hope that continued engagement with the Welsh Government and the Northern Ireland Executive will lead to further recommendations for legislative consent to the Bill.
This has been a long debate and a number of extremely valuable points have been raised. With a huge sense of relief, I now turn to my closing remarks, and I imagine that noble Lords are as grateful for that as I am. I know that I have not been able to address all the points raised by your Lordships, but if there are matters that noble Lords would find it helpful to discuss further, I would be only too happy to meet them at any stage. I look forward to the further stages of the Bill and to working in a spirit of partnership and purpose to provide the certainty that businesses and consumers in all four corners of our great nation crave and need in the current circumstances.
Bill read a second time and committed to a Grand Committee.