Trade Bill

Public Bill Committee, 25 June 2020.

Judith Cummins (Labour, Bradford South)

Good morning, everyone. Before we start, I remind everyone that the Hansard Reporters would be grateful if Members emailed electronic copies of their speaking notes to hansardnotes@parliament.uk.

I am aware that the room is very hot. Please do not hesitate to remove your jackets. We are getting somebody to come and open the windows. Please bear with us and try to make yourselves as comfortable as possible.

Implementation of international trade agreements

Gareth Thomas (Labour/Co-operative, Harrow West)

I beg to move amendment 16, in clause 2, page 2, line 34, leave out subsections (7) and (8) and insert—

“(7) No regulations may be made under subsection (1) in relation to an agreement which meets the criteria in subsection (3) or (4) after the end of the period of five years beginning with IP completion day.”

This amendment would bar any extension to the five-year window for making regulations to implement EU rollover agreements.

Judith Cummins (Labour, Bradford South)

With this it will be convenient to discuss the following:

Amendment 17, in clause 2, page 2, line 34, leave out subsections (7) and (8) and insert—

“(7) No regulations may be made under subsection (1) in relation to an agreement which meets the criteria in subsection (3) or (4) after the end of—

(a) the period of five years beginning with IP completion day (“the initial five year period”), or

(b) such other period as is specified in regulations made by the Secretary of State in accordance with subsection (8).

(8) Regulations under subsection (7)(b) may not extend the initial five year period or any subsequent period beyond the day which falls ten years after IP completion day.”

This amendment would limit any extension of the window to a maximum of ten years.

Amendment 20, in clause 2, page 2, line 35, leave out “five” and insert “three”.

Amendment 21, in clause 2, page 2, line 36, leave out “five” and insert “three”.

Amendment 22, in clause 2, page 2, line 39, leave out “five” and insert “three”.

Amendment 23, in clause 2, page 2, line 41, leave out “five” and insert “three”.

Gareth Thomas (Labour/Co-operative, Harrow West)

It is good to have you back in the Chair, Mrs Cummins. On Thursday afternoon, when you were not with us, we had one or two moments of light. The hon. Member for Stafford clearly began to feel nervous about whether the Bill was properly drafted, asking me to go into further detail about what was wrong with the Bill. The Minister helpfully confirmed that Command Papers published by his Department are not worth the paper they are written on once 12 months have passed and that there is absolutely no guarantee that the House will get either a debate or a vote on any future UK-US deal.

It is therefore a particular pleasure to have the chance to return to the subject of continuity or roll-over agreements and to speak to these amendments. As you will remember, Mrs Cummins, the Minister and his colleagues have presented the Bill as being purely about rolling over agreements already long since negotiated with the European Union. Effectively, they say, it is just a matter of changing “EU” to “UK”, putting a comma in a different place, dotting the odd i or crossing the odd t, or making some other little tweak—in practice, minor changes to deals that have already been done. Indeed, so confident was the former Secretary of State for International Trade about that, that he committed to get all 40 trade agreements with the European Union rolled over into UK-specific trade deals by March last year.

Imagine our surprise on seeing in the Bill clause 2(7), which suggests that a period of five years might be needed after implementation day, with the option to extend by another five years, to conclude those roll-over agreements. Bear in mind that we were told that deals such as the South Korea, Japan and Canada deals were going to be easy to complete and should be done by Brexit day—certainly, we were led to believe, by implementation day.

Matt Western (Labour, Warwick and Leamington)

To elaborate on that very simple point, I recall very well that Lord Price even tweeted about this—it would be just a simple cut-and-paste job. We have all been misled, haven’t we?

Gareth Thomas (Labour/Co-operative, Harrow West)

I am relatively new to the Trade Bill and am only catching up with the discussions that my hon. Friend and others have had about these continuity agreements. Something odd certainly seems to have happened. It is true that the Minister has managed to get a deal done with the Faroe Islands.

Greg Hands (Conservative, Chelsea and Fulham)

On a point of order, Mrs Cummins. I think that the hon. Member for Warwick and Leamington just accused Lord Price, a Member of the other House, of misleading people. I do not think that that is a permissible term to use in our debates. I invite the hon. Gentleman to withdraw that term.

Matt Western (Labour, Warwick and Leamington)

I will certainly withdraw it; I recall that I used the word, now that the Minister mentions it. What I was trying to say was that Lord Price was suggesting that there was a simple procedure of cutting and pasting, and that was clearly not the case.

Gareth Thomas (Labour/Co-operative, Harrow West)

It is certainly true that in exchanges at the Dispatch Box over the past two weeks, we have been led to believe that these 40-odd agreements will be very easy to complete. Yet only 20 of them have been completed thus far. It looks, to all intents and purposes, as though a number of the agreements are not going to be completed by implementation day—and that, surely, is an extremely surprising eventuality for all of us to contemplate.

Bill Esterson (Labour, Sefton Central)

The point about Lord Price is that what he said has turned out not to be true; that is the reality. My hon. Friend mentions the agreements that have been concluded, but the one with South Korea, for example, is only a temporary agreement with notice for a renegotiation. Listening to what my hon. Friend is saying, I wonder whether the Government have reverted to the five-year period because they realise that they would quite like these provisions still to be in place for the South Korea deal when it comes back for the renegotiation.

Gareth Thomas (Labour/Co-operative, Harrow West)

If my hon. Friend will forgive me, I will come to South Korea in due course.

The five-year point, perhaps, is understandable in the context of South Korea, but it is slightly odd that Ministers think they might not be able to get the South Korea deal done even in five years, and might need another five. One has to ask why we would need 10 years to put together a roll-over agreement that is simply, as my hon. Friend the Member for Warwick and Leamington said, a cut-and-paste job—a matter of just switching “UK” for “the European Union”.

The hon. Member for South Ribble helped throw a little light on the issue during her questions to Mr Richard Warren, the head of policy for UK Steel, in our second sitting. In Question 59, she asked:

“Mr Warren, if there were continuity trade agreements that did not roll over, what would be the consequences for the steel industry?”.

Mr Warren talked initially about the continuity trade agreements with north African nations such as Morocco and South Africa. He then cut to the chase on one of the biggest markets for UK steel exports: Turkey. Talking about the so-called continuity trade agreement, he said:

“Turkey…probably will not be carried over, regardless of the Bill.”

He went on to say that the Bill would allow the continuity and trade agreement to happen,

“but with politics and the complexities of negotiations, I fear, that agreement will not be in place by the end of the year, which would result in 15% tariffs, on average, on UK steel going to Turkey— 8% of our exports. It is an extremely competitive market already; a 15% tariff would pretty much knock that on the head.”

He went on to underline a similarly important point:

“At the same time, because the UK has no tariffs on steel, we would still have up to half a million tonnes of steel coming in from Turkey”.––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 42 to 43, Q59.]

We would not only have an uneven trading relationship when it came to steel exports, given the huge tariffs; suddenly, imports of Turkish steel into the UK would have no tariffs at all, creating even more competition for UK steel to face in the domestic market. That is a profoundly disturbing and worrying situation, and it would be helpful to have a little more clarity from the Minister, when he gets to his feet, about what is going on in those negotiations. As I understand it, negotiations have not even begun between the UK and Turkey, never mind being close to reaching any sort of conclusion.

Matt Western (Labour, Warwick and Leamington)

My hon. Friend is making an extremely important point. Hiroshi Matsuura, the Japanese lead negotiator, is saying that their only focus for the next six weeks is the UK, whereas the UK is trying to negotiate with the US, the EU, Australia, New Zealand and so on. Yet we do not even have the full complement of Department for International Trade trade negotiators in the policy group: we are about 10% down on where we should be.

Gareth Thomas (Labour/Co-operative, Harrow West)

My hon. Friend is right. Let us bear in mind another point before I come on to Canada. Negotiations are going on not only with the US in relation to the transatlantic partnership with the EU, but we still have not concluded a continuity trade agreement with Andorra, as I understand it. Presumably, one of the Minister’s civil servants is sitting in a room somewhere, worrying about what will be in the UK-Andorra agreement, when they could be properly deployed to trying to sort out whatever the problems are in the UK-Japan agreement. Again, I remind the Committee that we were told that that agreement would be incredibly simple to sort out. I think the Minister said it was just a continuity trade agreement or just a roll-over agreement.

Let us come to the UK-Canada talks—one of the great favourites of the Minister. He had a little fun with us, it would be fair to say, on Tuesday afternoon. Again, however, there does not seem to be any sign of the UK-Canada talks being completed by 31 December. The Minister has been at pains to sell us the great virtues of the EU-Canada deal, and presumably—I would ask him this—there will be similar virtues from a UK-Canada deal, but why is there no obvious sign of any progress towards a signing ceremony for a UK-Canada deal?

In the quote from the Canadian Government regarding why negotiations have not advanced at a more rapid pace, they made it very clear that they were waiting to see how EU-UK talks got on. One got the strong sense that Canadian negotiators are sitting out in the garden smoking a cigar and planning their holidays. They are in no rush whatever to complete a trade deal with the UK, notwithstanding the studiously unspecific comments the Secretary of State gave us at questions last Thursday about how good natured the conversations had been with whoever she had spoken to in the Canadian Government.

Bill Esterson (Labour, Sefton Central)

My hon. Friend is developing his point extremely well. I think it is fair to remind him that it is not just Canada that puts our deal with the EU ahead of its deal with us; Japan and Turkey want us to do a deal with the EU so that they can base their deal with us on the terms of trade that we have with the EU. That is a whole other set of complexities that go way beyond this being a simple matter of continuity and of changing the letters “EU” to the letters “UK”.

Gareth Thomas (Labour/Co-operative, Harrow West)

Let me chide my hon. Friend for his negativity. We were told at the last general election that an oven-ready Brexit deal would come before us, with a wonderful new free trade agreement, easy to sign, with the European Union. Presumably the scepticism that I have allowed to creep into my remarks about whether the roll-over agreements will be signed by 31 December are entirely unreasonable, and the Minister will say that all the other 20, even the one with Andorra, will be done by 31 December.

I know that the South Koreans want to start completely fresh talks in about 18 months’ time, but surely that will not take five years, or 10 years to complete—or will it? I am an optimist. I take the Minister at his word. He has repeatedly said that roll-over agreements will be simply a matter of rolling over the EU agreements into UK agreements, changing some tiny details, and that they will all be done on time. One wonders, then, why we need the flexibility set out in subsection (7).

Let us remember when the previous Trade Bill was prepared and developed. It probably happened at around the time the right hon. Member for Maidenhead (Mrs May) took over as Prime Minister. Members of the Committee will remember that she decided to sack George Osborne, the then Chancellor of the Exchequer, for gross incompetence. One can imagine that the Cabinet Secretary got on the phone to the permanent secretary at the Department for International Trade and said, “There’s good news and there’s bad news. The good news is that the man who introduced austerity, destroyed our economy and damaged public services has finally left the Government. The bad news is that one of his chief cheerleaders is moving into your Department. Whatever you do, given the way in which they have messed up the economy, don’t let them mess up trade agreements. Write into the Bill a bit of extra time—five or 10 years, or perhaps even longer—so that we can get these trade agreements done.” The Minister may not share my assessment of how this provision got written into the Bill.

Bill Esterson (Labour, Sefton Central)

I have to take the opportunity to congratulate my hon. Friend on the moment in our deliberations. The lines he just delivered cannot be improved on, and I would not wish to do so. Does he remember Nick Ashton-Hart, in giving evidence to us this time, reminding us of his evidence to us last time that trade agreements inevitably take a lot longer than expected, and that trade agreements between parties fall in favour of the bigger party? We are now a smaller party than when, as part of the EU, we made agreements with all the countries he mentions. That is one reason why these things will take a lot longer—those countries want to renegotiate a better deal, which they think they can get because of the power they have.

Gareth Thomas (Labour/Co-operative, Harrow West)

My hon. Friend has always grounded his remarks in reality. Let us remember that Conservative Ministers and Members have always wanted to present trade negotiations as a Christmas sale, where one just turns up and gets a shedload of lovely bargains. They have not, as yet, been open and honest with the British people about the trade-offs that trade negotiations inevitably bring, on which—I suspect this afternoon—more anon.

I gently suggest to my hon. Friend that we are likely to hear the Minister, in his wind-up speech, chastising us again for our lack of belief in the calibre of the Secretary of State himself and the Department to complete these UK-specific trade agreements. If the Committee remembers when the last Trade Bill was discussed, so confident were the previous ministerial team that this power was actually not quite as necessary as first appeared, they agreed to reduce the sunset period from five years to three years. One can only assume that the Cabinet Secretary got back on the phone after the current Prime Minister was selected and said, “I’m really sorry to bring you bad news, but one of the chief acolytes of the little-lamented George Osborne is back in your Department—”

Maria Caulfield (Conservative, Lewes)

On a point of order, Mrs Cummins. While this is very entertaining, I am quite conscious that we are still not even past considering clause 2. We must get through the whole of the rest of the Bill this afternoon—there are 12 more clauses. May I ask your advice, Mrs Cummins, on how we can get through that when speeches are not necessarily referring to the Bill itself?

Judith Cummins (Labour, Bradford South)

I hear that point of order, and I am sure that Mr Thomas also heard it. I encourage him to perhaps drift closer towards the subject of the amendment.

Gareth Thomas (Labour/Co-operative, Harrow West)

As ever, Mrs Cummins, I am grateful for your guidance. It will come as no surprise to you or the Committee that Labour Members are disappointed that the Minister has not at least stuck to the terms of the deal that he and the then Minister of State made with the hon. Member for Huntingdon (Mr Djanogly) to reduce the sunset clause from five years to three years, which is specifically relevant to amendments 20 to 23—just to help the Government Whip.

Again, one wonders if, by that point, there was growing fear in the Department that, despite the rhetoric of the Minister, there would be a series of challenges in completing these roll-over agreements. It is a surprise to us to see that sunset provision not included. What my hon. Friends and I have done—in a very generous way, I think—is provide a menu of options to the Minister to demonstrate his and his Department’s faith in their ability to complete these roll-over agreements. Surely, if it is that easy to get the roll-over agreements completed, they will not need to go beyond five years, which is the purpose of amendment 16. Perhaps, if they are feeling a little nervous, they might want to go for amendment 17 and have a limit of 10 years on the face of the Bill. If they are feeling very nervous that they will not get negotiations done with South Korea, Canada, Andorra, Japan or Turkey by the end of the implementation period on 31 December, perhaps they would want to put back into the Bill their own amendments, as encapsulated in amendments 20 to 23.

In our generosity, we have retabled the amendments 16 and 17 that were tabled to the previous Trade Bill in the names of my hon. Friend the Member for Brent North (Barry Gardiner) and my hon. Friend the Member for Sefton Central and others. We did that to help the Minister demonstrate his confidence in his ability to get all the trade agreements done, with his own wording on a three-year as opposed to a five-year sunset clause.

It might be worth, particularly for the Government Whip’s benefit—thinking about rebellions—to remember what the hon. Member for Huntingdon said. He pushed Ministers to go further to limit the powers in the Bill. He pushed them hard on Second Reading and, clearly, in private negotiations, to table their own amendments on Report, to limit the amount of overreach and potential abuse of the current weak scrutiny arrangements for trade agreements. On Report two years ago the hon. Gentleman advanced an entirely plausible argument, and talked about the possibility of a country where there is an EU trade agreement saying to us:

“‘Yes, we agree that you can roll over, but let’s face it, you are a market of only 50 million people rather than 500 million, so we’ll agree to roll over, but only on condition that we also get 50,000 visas a year.’” —[Official Report, 17 July 2018; Vol. 645, c. 274.]

Under the present Bill, that trade agreement could be pushed through the House of Commons with only a 17-member Committee talking for 90 minutes. That is hardly the sort of robust parliamentary scrutiny that such a trade agreement would deserve. On Second Reading of the present Bill on 20 May the hon. Member for Huntingdon repeated his criticism at column 621 and noted that not only might visas be an issue with respect to trade agreements; the country that wanted to roll over an agreement with us might also want military or intelligence provisions to be added in as part of a package.

Similarly, any slightly amended deals in five or three years’ time could also be covered, and could be used to implement such trade agreements with other wide-ranging implications and with minimal levels of scrutiny. So surely it is a sensible step to limit the Bill’s ability to help Ministers to bypass parliamentary scrutiny of the trade agreements they conclude, even in the small way that Ministers have previously advanced themselves of reducing the sunset period from five years to three years. If they cannot face the embarrassment of backing an amendment that was first tabled by my hon. Friend the Member for Brent North, perhaps they will show a little courage and back the amendments that they brought forward as a result of a deal with Tory Back-Benchers. If they do not vote for amendments 20 to 23, it will be further evidence that when Tory MPs do a deal with Ministers they cannot rely on it until it is written on the face of legislation.

The further we get from the point when the EU signed a deal with a third country, the more likely, surely, a UK-specific deal is to be significantly different from the deal that the EU negotiated. It is true, as my hon. Friend the Member for Sefton Central said, that South Korea has agreed a continuity deal, but only on the proviso that a new deal would be properly negotiated in 18 months’ time. The further away from the signing of the EU-South Korea deal and the UK-South Korea continuity deal, the more likely it is that the new deal will be very different. Therefore, more parliamentary scrutiny—even the limited parliamentary scrutiny that the Constitutional Reform and Governance Act 2010 provides—will be merited. Limiting the length of time that the Bill can be used to push that deal through with the minimal levels of scrutiny as it allows is even more necessary.

I gently remind the Committee of the significance of what we are discussing. Trade agreements last longer than a Parliament. They outlive Ministers, even those who keep coming back to the trade Department—like a bad penny, some would say, but that would be unfair. I do not know why I was tempted to say that, looking at my hon. Friend the Member for Sefton Central. I will move on.

Mistakes can be made, and in order to prevent them it is important that we have proper scrutiny. Therefore, if we limit the provisions of the Bill purely to its original claimed purpose—just to do the continuity work that is necessary to maintain existing relationships—we should limit the time that is required. It is in that spirit that I offer to the Committee this menu of sensible options to limit the power in the Bill.

Greg Hands (Conservative, Chelsea and Fulham)

It is a pleasure to welcome you to the Chair, Ms Cummins. I did not get the chance on Tuesday because the supergroup carried on for the entirety of the morning.

Amendment 16 seeks to remove the power to renew the sunset clause after five years, and I am afraid I cannot support it. It would undermine our ability to implement our obligations from trade agreements beyond the first five years, which risks putting us in breach of the agreements and could open us up to legal challenge. I am sure that is not what the Opposition are seeking to achieve.

Bill Esterson (Labour, Sefton Central)

If the Minister cannot support a change to the five-year sunset period, why did he support it in the previous Parliament, when it was three years?

Greg Hands (Conservative, Chelsea and Fulham)

I think the hon. Gentleman’s timeline—or the timeline of the hon. Member for Harrow West—may be a little incorrect. As it happens, I left the Department on 21 June 2018, which predated that amendment being made. In any case, the context then, which I will explain, was rather different from the context now, and I think it is very desirable that it be five years, not three years, for the reasons that I am about to explain.

There is a fundamental misunderstanding in everything that the hon. Member for Harrow West just said. The power is in large part needed to make technical changes that ensure that the agreements remain operable. The fundamental misunderstanding on his part is that it is not five years extra to complete the negotiations, sign the deals or finish the negotiations—no. It is five years that is needed to make sure the agreements remain operable once they have been signed.

Before I come to the real detail, let me give the hon. Gentleman an update on some of the agreements he asked about. It was interesting to hear him focus on Andorra and San Marino. Those countries are, of course, in a customs union with the European Union.

We are in discussions with both countries, but in our view, they are largely dependent on what the future relationship between the UK and the European Union looks like, for those two countries are in a complete customs union with the European Union.

The hon. Gentleman asked for clarity about Turkey. I was surprised by that question, because I checked his Twitter feed, and he does actually follow me on Twitter, which I do not take as a compliment ordinarily. He must have seen what we put out three hours ago from my right hon. Friend the Secretary of State for International Trade:

“Great to see”—

UK and Turkey—

“trade talks progress today. Let’s build on our already strong trading relationship worth £19bn. We are working hard to ensure we can reach a UK-Turkey trade deal at the end of the transition period.”

He has it right in front of him on his own Twitter feed; I urge him to read it. People mock social media—I might have been critical of social media in my time—but they occasionally perform a useful function. Helping us to keep up to date with what is going on in the world is one of the most useful aspects. So there he has it from just three hours ago.

The hon. Gentleman asked about the so-called temporary agreement with South Korea. It is not a temporary agreement. The agreement includes a review clause after two years, which is a standard feature of many international trade agreements. The review clause states—I am paraphrasing slightly—that if the two parties do not believe it is mutually advantageous to continue the agreement, there is the option not to. That does not mean to say that it is a temporary agreement. All international agreements can be cancelled by one party or the other, if they feel the agreement is no longer mutually advantageous. Of course it leaves open the possibility of doing a more extensive agreement in the future, but that is the case with all trade agreements.

When a country signs an agreement, no one is saying that it will stay in place forever. There may be opportunities in future to extend it into areas of trade that had not been thought of when the original agreement was signed. That is an entirely normal phenomenon. For example, the EU and Mexico have done an enhanced agreement based on their original agreement, which dated from about 2000 or 2002, to bring it up to date. New things come along, such as e-commerce and so on, so of course trade agreements are updated, but it is wrong to describe that trade agreement as temporary.

We are in discussions with Canada, but I return to the points that the hon. Gentleman made on Tuesday. He is so against the Canada agreement that, if there were any delay in the discussions with Canada, he should be cheering that not condemning it, because he is opposed to the agreement in the first place. I thought that would update him on where we are with the agreement.

Let me describe what it is all about. In the case of a transition mutual recognition agreement, we may need to change secondary legislation after the point of signing, and after 1 January 2021, to update the names of awarding bodies and third countries so that UK businesses can continue to use such bodies legally. It is not extra negotiating time. It is extra time to ensure that the agreement remains operable.

Alternatively, where our trade agreements reference international standards, such as environmental protection, we may need to update references in domestic legislation to ensure that we remain in compliance with our international agreements. Equally, a potential use of the power could be to upgrade the list of entities subject to procurement obligations to reflect machinery of government changes.

I used the example last week of DCMS changing its name from the Department for Culture, Media and Sport to the Department for Digital, Culture, Media and Sport. That name change might need to be reflected to keep one of those agreements operable, so a change in domestic legislation would ensure that the procurement obligations in the agreement are kept operable. It is not extra negotiating time. The power could also be used to update the list of entities subject to procurement obligations, as I have said.

I think there is a misunderstanding of the nature of the power. If Opposition Members had expressed concerns about the breadth of the power—in other words, the ability to carry on amending legislation for many years afterwards—that would be a much more legitimate concern than the professed concern about extra negotiating time. The Bill has been scrutinised by the Delegated Powers and Regulatory Reform Committee. Its 33rd report on the 2017-19 Bill raised no concerns about the delegated powers in the Bill, including the sunset clause, and welcomed our move to introduce the affirmative procedure for any regulations made. I see no reason why it should reach a different conclusion on this Bill.

Matt Western (Labour, Warwick and Leamington)

I just want to understand the point the Minister is making. I understand the importance of it, but does it not suggest that the three-year clause in the previous Bill showed a degree of naivety on the part of Government—that they would have sufficient time on the other side to negotiate further agreements with these countries?

Greg Hands (Conservative, Chelsea and Fulham)

No, I do not accept that. It has nothing to do with the negotiations; it is all about keeping the agreements operable. It is a matter of judgment, and our judgment is that five years is a reasonable time. It is renewable by the affirmative assent of both Houses. We think that that is a reasonable time to keep these powers in place, so that we can then make further changes as needed to keep those agreements operable, and it is renewable by both Houses.

Gareth Thomas (Labour/Co-operative, Harrow West)

Will the Minister support our amendment to reduce the sunset period from five years to three years, as his own Government did in the previous Bill, or is he determined to reject that suggestion?

Greg Hands (Conservative, Chelsea and Fulham)

I have just explained that we think that five years, not three, is the appropriate time, so we will vote against the hon. Member’s amendment if he has the audacity to push it. Given that the fundamental premise is incorrect, I would be surprised if he were to push it to a vote, because it is based on a misunderstanding of what the power is all about.

The DPRRC report did not indicate any concerns about the Government retaining the power to renew this clause. Amendment 17 proposes to render the clause renewable only once and for not more than a period of 10 years after the end of the transition period, but that is unnecessary. The clause can be extended only with agreement from both Houses of Parliament and only for a period of up to five years at a time. If Parliament judges that our use of the sunset clause has not been appropriate, it has the power to vote against renewal. As I have stressed before, without the ability to renew the clause, we will not have the power to ensure that signed continuity agreements remain operable, which risks the UK’s ability to fulfil its international obligations. If we do not have this power, we will need to put in place other powers. We should not do tomorrow what we can do today.

Amendments 20 to 23 propose to shorten the sunset period from five to three years. I have already explained why we need the power and the changes the power would make. We believe that a five-year period strikes the right balance between flexibility of negotiations and constraints placed on the power. Our signed continuity agreements are evidence that this is a limited, technical exercise to replicate the effects of existing obligations. Seeking parliamentary permission to renew this capability every three years, rather than five, would be disproportionate and places an unnecessary burden on parliamentary time.

I repeat that the amendments, or at least the description of them, are based on a fundamental misunderstanding. The five years are not extra negotiating time. They allow technical changes to regulations on an ongoing basis, to keep operable agreements that have already been signed. I hope that that reassures the Committee, and I ask the hon. Member for Harrow West to withdraw the amendment.

Gareth Thomas (Labour/Co-operative, Harrow West)

I enjoyed very much the answer that the Minister provided. In particular, it is a relief to hear that the Secretary of State has finally got round to launching negotiations with Turkey. I hope that those negotiations will be completed by 31 December, given the huge and dramatic impact that it could have on jobs and steel businesses in the UK. I gently remind the Minister of the considerable scepticism we heard from representatives of UK Steel that that would be achieved. It would be interesting to hear later in our proceedings whether Ministers have any sort of contingency plan for the steel industry, if negotiations cannot be completed in time to get a UK-Turkey deal through.

On the substance of the Minister’s argument, I draw to his attention the section in the House of Commons Library briefing on the sunset clause. It explains that subsections (7)(b) and (8) allow the period in which regulations can be renewed to be extended by up to five years at a time, with the approval of both Houses of Parliament. Ministers have put a never-ending power into the Bill.

The delegated powers memorandum goes on to say:

“the Department is conscious of the breadth of the power in Clause 2 and is of the view that it should not remain in place beyond the point at which it is needed.”

I can accept that it may be necessary to make some technical changes over a period of one, two or three years, but it is difficult to imagine why the power would be needed beyond five years, without giving the House of Commons and the other place scope to review whether the changes Ministers want under the provision are necessary as a result. Furthermore, the Minister did not really give a clear explanation as to why the three years—a deal his colleagues had done with the hon. Member for Huntingdon and others on the Tory Back Benches—was switched back to the original five years. I therefore intend to press these amendments to a vote.

Judith Cummins (Labour, Bradford South)

With this it will be convenient to discuss the following:

Gareth Thomas (Labour/Co-operative, Harrow West)

I rise to move new clause 18 in my name and that of my hon. Friends, and I hope to say a few words about new clause 22. Clause 2 gives Ministers the authority to make any regulations they consider appropriate for the purpose of implementing an international trade agreement, including regulations that make provision for

“modifying…primary legislation that is retained EU law”.

We have had representations suggesting that “retained EU law” appears to include a very wide range of primary legislation that has an impact, potentially, on measures to improve equality in this country, not least the Equality Act 2010 and the Modern Slavery Act 2015. At the moment, there do not appear to be safeguards on the face of the Bill to prevent Ministers from using the power in clause 2 to erode previous rights on equalities granted by Parliament.

That excellent organisation Liberty has provided an example to the Committee, to give a little colour to this justified concern. The Government could in theory

“reach an agreement with a foreign state on the provision of services, such as transport, and”

make

“changes to the Equality Act”.

That

“could include removing the duty on service providers to make reasonable adjustments for people with disabilities, making access to transport more difficult for 1 in 5 of the UK’s population.”

If such a power were necessary at all, it is surely vital that safeguards are introduced in the Bill to ensure that human rights and equality laws passed by Parliament cannot be amended by Ministers whose key priority is to get a series of trade agreements signed off and locked into law. The way in which the Bill has been drafted does not include any restrictions on the use of delegated powers, as we touched on in a previous discussion.

As a result of those concerns, Members of the other place in particular, as well as a number of Members in this House, raised those points with Ministers. That led to what we Opposition Members thought was a very sensible amendment, tabled by the noble Baroness Fairhead, then a Minister of State in the Department, for the Government on Report in the House of Lords. I assume that she no longer fits the ideological bent of the current Government, and she is no longer there, which may explain why the amendment is no longer in the Bill. It seems to me that that is one further example of how this Bill is even worse in terms of parliamentary scrutiny than the Bill that had completed all its initial Commons and Lords stages in the last Parliament, only to be ditched by the Government.

According to the official record, the Government apparently worked very closely with the Equality and Human Rights Commission to produce the amendment that the Government originally tabled and that we are re-tabling, acknowledging that although they were not anticipating any need to amend equalities legislation, there was a possibility of the type of example that Liberty has advanced to us, and which I have given to the Committee: that trade agreements could potentially weaken protection against unlawful discrimination or lead to the diminution of equality rights.

The new clause provides for a ministerial statement to be made before any regulations are laid to implement a continuity trade agreement. The statement would outline whether those regulations modifying the provisions of the Equality Act 2006 and the Equality Act 2010 are set to happen. That provision was supposed to be in addition to the reports that Parliament would receive setting out the significant differences between continuity agreements and the original agreements. Given that those reports are also no longer guaranteed, it is a further indication that scrutiny—already poor of these trade agreements in a number of ways—is set to get even worse, unless Ministers are willing to put this sensible new clause into the Bill.

When she moved her amendment, which I read it again for the benefit of Members, Baroness Fairhead said:

“I trust that this House will accept this as further evidence that the Government have a strong desire to be transparent with Parliament, businesses and the general public about their continuity programme.”—[Official Report, House of Lords, 13 March 2019; Vol. 796, c. 1060.]

What are we to believe now that it is not in the Bill? Inevitably, it is difficult not to feel that the Government do not want to be quite as transparent as they once claimed with Parliament, businesses and the general public about the so-called continuity trade programme. It is therefore not surprising that one comes back to the words of Professor Winters talking about the feedback he had had on how UK-Japan negotiations were going. He was very clear that they were being “studiously” vague. I once again urge Ministers, even at this late stage, to accept new clause 18.

New clause 22 would lock in the need for the consent of both Houses of Parliament, the Welsh Assembly, the Scottish Parliament and the Northern Ireland Assembly before any trade agreement could be agreed. We on this side of the House have considerable sympathy with the idea that both Houses of Parliament should be required to approve any trade treaty before it takes legal effect. We think that the people of Wales, Scotland and Northern Ireland have as much right as the people of England to expect a say through their representatives in this House on whether trade agreements should be signed into law. We are clear, too, that the devolved Administrations must be properly consulted. Indeed, with new clause 16, which we will no doubt come to vote on this afternoon, we want to lock into law the guaranteed rights of the devolved Administrations to consultation.

Given the significance of trade agreements to the people of Wales, Scotland and Northern Ireland, I can well understand that the Senedd, the Scottish Parliament and the Northern Ireland Executive will at times want to comment on trade matters. One can understand why those who tabled new clause 22 decided to do so in the light of the fact that Ministers have decided to vote down every attempt to improve the scrutiny arrangements for future trade agreements and the so-called continuity trade agreements—many of which, as we know only too well, are not actually set to be continuity trade agreements at all.

Let me give just one example where the Senedd in particular might have concerns about trade agreements, which might have provoked the tabling of new clause 22. The Senedd, like the Welsh Government, will probably understandably have been very concerned about the future of the Port Talbot steelworks. If we had been given more detail about the nature of the UK-Turkey negotiations, rather than the studiously vague description that the Minister read out from the Secretary of State’s Twitter feed, there might not be the concern about the future of steel in Port Talbot and elsewhere in the UK that there understandably will be following Mr Warren’s evidence to the Committee.

Let us take cars. Again, the automotive parts manufacturing industry is particularly strong in Wales. As a result, the need to conclude a UK-Japan deal is particularly important to the automotive industry, as the Society of Motor Manufacturers and Traders has set out in some detail in its evidence to Ministers. It is particularly concerned about the future of rules of origin. The Minister said at the outset that he may need to revert back to give us detail about how rules of origin are changing as a result of continuity trade agreements. I respect and understand why that might be necessary, but he will know that with trade agreements, the devil is in the detail, and nowhere is that more true than rules of origin.

Many of the rules of origin that the UK car industry benefits from involve both horizontal and diagonal cumulation at the moment, in the sense that countries other than the UK where parts of cars are made often count towards the value of that car as a product and therefore whether it benefits from preferential trade terms with a third country. The issue is how that will be replicated in one country-specific deal—a UK-Japan deal. One can understand why the Senedd, the Scottish Parliament and the Northern Ireland Executive might have concerns about that.

Again, it would be good to hear from the Minister at some point today, or by letter, how the debate about rules of origin with Japan, Turkey, Canada and South Korea has been taken forward. I understand that with South Korea, a deal has been done for the time being to allow EU parts to continue to be counted towards the value of a UK car. Will that be the case in a UK-Japan agreement, bearing in mind that we apparently have only six weeks for those negotiations to be done?

As I say, one can understand the concerns of the Senedd, the Scottish Parliament and the Northern Ireland Executive and their wanting to have a say in trade negotiations. We think the solution is to add new clause 16 to the Bill, but I hope that I have nevertheless done some justice to the understandable concerns of those in Wales, Scotland and Northern Ireland who are worried about how trade agreements might affect them.

Judith Cummins (Labour, Bradford South)

Thank you, Mr Thomas. I remind you that the debate is on clause 2 stand part. You can speak to new clause 18, but you are not moving it at this stage.

Stewart Hosie (Scottish National Party, Dundee East)

I start by addressing new clause 22 in the name of my friends from Plaid Cymru. In one regard, it seeks to do something similar to our amendment 8, which the Committee has already debated: to lay down in statute respect for devolution. We witness that in (c), (d) and (e), which would require motions relating to a ministerial statement to be approved by the Senedd, the Scottish Parliament and the Northern Ireland Assembly prior to regulations being made to implement an international trade agreement. New clause 22 would also, at (a) and (b), empower Parliament by requiring a statement on the terms of such an agreement to be approved in the House of Commons and a take-note motion passed in the other place.

That is eminently sensible. However, I suspect that the Minister will say it is not necessary. He may suggest that it is not necessary because international agreements, including trade agreements, and the decisions to implement them are reserved matters. There is some merit in that. He may also make the case, as he did on Tuesday, that it is better if the UK speaks with a single, if not a united, voice in order to give our negotiating and trading partners certainty about what a deal may or may not deliver.

That, however, is rather to miss the point, as the hon. Member for Harrow West said. We know that some sectors or industries are disproportionately important to the economies of Northern Ireland, Scotland and Wales, compared with their importance to the UK economy as a whole. I cannot remember the precise numbers, but it has been suggested on multiple occasions that the white fish industry is 10 times more important to the Scottish economy than it is to the UK economy as a whole. There are clearly sectors that are vital.

It is equally the case—this is probably accepted now—that modern trade agreements are by and large not about quotas and tariffs; they are about regulation, conformance and product safety. They have the ability to impinge directly on the reserved competencies in Scotland, Wales and Northern Ireland. It is, therefore, sensible that we understand and respect why my friends from Plaid Cymru and others seek not just to empower both Houses of Parliament in the decision-making process on implementing an international trade agreement, but to give statutory voice to the devolved nations to ensure their legitimate interests are properly protected.

I turn to clause 2 stand part. I accept what the Minister said about the Bill being primarily about rolling over the pre-existing trade agreements that we had by dint of our very successful membership of the European Union, but I also take on board the serious point made by the hon. Member for Harrow West. He said that the Queen’s Speech described a Bill to facilitate trade, not just roll-over agreements. He also talked about the long title, which says that the Bill will

“Make provision about the implementation of international trade agreements”.

That is rather wider than negotiating and implementing roll-over arrangements only.

In the previous debate, we began to touch on some of the key flaws in clause 2 that run to the heart of this legislation. As I said on Second Reading and in my introductory remarks last week, clause 2(6)(a) allows for the Government to make provision

“modifying retained direct principal EU legislation or primary legislation that is retained EU law”,

which runs to the heart of people’s concerns. Even if I accept—and, by and large, I do—that the provision is designed to roll over our current deals, the ability to modify in that way may well mean that we end up with an agreement that is substantially different from the one we started with.

Bill Esterson (Labour, Sefton Central)

It is a pleasure to see you back in the Chair, Mrs Cummins, and we shall continue to enjoy serving under your chairmanship for another 19 minutes. I thank you for your contribution as joint Chair of the Committee.

I rise to speak to new clause 16. I remind the Minister of the point touched on by my hon. Friend the Member for Harrow West on 13 March 2019, when the Minister’s then ministerial colleague—

Judith Cummins (Labour, Bradford South)

Order. I remind Mr Esterson that we are not debating new clause 16 yet.

Bill Esterson (Labour, Sefton Central)

Sorry, it is new clause 18 that I rise to speak to. I am grateful for the correction.

On 13 March 2019, an identical amendment was tabled by Baroness Fairhead in the House of Lords. I will just remind the Minister of what she said in her brief contribution:

“I trust that this House will accept this as further evidence that the Government have a strong desire to be transparent with Parliament, businesses and the general public about their continuity programme.”—[Official Report, House of Lords, 13 March 2019; Vol. 796, c. 1060.]

She said that in good faith, because she wanted the amendment to be accepted. It was accepted by the House of Lords and became a substantive part of the Bill, and the Commons would have considered it had the Government brought it back in the time available. There was plenty of time to discuss it then. The Government Whip made a point of order earlier. If the Government have a real problem with timing today, they should think about the problem that was caused by their not bringing back the Bill at any time during the period after March 2019, when an identical amendment, tabled by the Government, was agreed. The Minister has to answer the question why, if this measure was good enough for the Government on 13 March last year, it is not good enough now.

Greg Hands (Conservative, Chelsea and Fulham)

Over the past few days, I have outlined the Government’s position on our approach to clause 2 and I will not repeat that to the Committee. The general point about the continuity powers has been frequently made. I will focus my remarks on the Opposition amendments.

First, I must inform the Committee that the letter I promised the hon. Member for Harrow West on the position of Kenya and Ghana has gone out to all members of the Committee. I pledged that on Tuesday, so I think that is pretty swift. It should be in everyone’s inboxes.

New clause 18 seeks to oblige the Government to publish a statement outlining whether any equalities legislation is affected by our continuity agreements before any regulations are made. As has been rightly pointed out, and as I was aware, a Government amendment to that effect was successfully made to the 2017-19 Trade Bill. The amendment was tabled when there was uncertainty among parliamentarians over the purpose of the Government’s continuity programme, in particular its potential impact on equalities legislation.

Time has moved on, however, and I ask colleagues to consider the significant progress we have made since then—specifically, the fact that we have now signed 20 continuity agreements with 48 countries. As can be seen from the parliamentary reports that we have published alongside each of those signed agreements, none of them has impacted on equalities or required us to amend equalities legislation.

To turn to a few points made in the debate, the hon. Member for Harrow West called into question Baroness Fairhead from the other House. I think the accusation was that she left the Government after some kind of disagreement. I confirm that Baroness Fairhead left of her own accord, unrelated to any political disagreement with the Government. I put on the record my thanks to her for her excellent service to the Department for more than two years on export promotion. UK exports did extremely well under her stewardship.

Opposition Members asked about rules of origin in relation to Japan, Turkey and Canada. Those are all live situations. I am not here to comment on live situations, discussions or negotiations, but clearly we seek to get as favourable rules of origin as possible for UK industry.

Gareth Thomas (Labour/Co-operative, Harrow West)

One thing the Minister can confirm, surely, is whether parts produced in other European Union countries will still count towards the value of the car or other parts that are being manufactured. That diagonal and horizontal cumulation is a standard feature of the rules of origin, and it might help to give some certainty to British car and car parts manufacturers that that flexibility in rules of origin will not be lost.

Greg Hands (Conservative, Chelsea and Fulham)

I thank the hon. Gentleman for that; he makes a good point. I refer him to the deal that we have negotiated with South Korea and how it reflects on those rules. That negotiation has been completed. However, here, today, it is not my job to comment on live negotiations or discussions with our counterparts.

The hon. Member for Dundee East talked rightly about sectors that are important in different parts of the UK. He made a very fair point. He talked about the white fish sector being 10 times as important to the Scottish economy overall as it is to the UK. That makes me wonder why—if I understood him correctly—his party’s policy is to rejoin the European Union, where presumably the status of the white fish sector is even smaller than the one tenth it represents in the UK. That baffled me.

It is strongly in the UK Government interest to have good relationships with the devolved authorities on trade, which is a reserved matter, a prerogative matter. None the less, regulations interact with areas that are matters of devolved competence.

It is therefore perfectly proper both for the UK Government to have good relations and discussions with the devolved authorities, and for the UK Government to interact with sectors that are larger—I do not mean to say that they are disproportionately important—for certain devolved Administrations than others. That is one reason why I have gone out of my way since rejoining the Department to have meetings—I am checking my list of engagements—about Scottish smoked salmon, and with the Scotch Whisky Association, the Scottish Beef Association and other bodies in Wales and Northern Ireland, as well as in the English regions.

Hon. Members talked about the unrestricted nature of the power, but it is not quite right to say that this is unrestricted. Any changes made are subject to the affirmative procedure, and the power is only to amend secondary legislation that is direct retained EU law, again subject to the affirmative procedure. It is not as if that is an unrestricted power.

Returning to equalities legislation, I remind colleagues of constraints in the Bill, including the fact that the affirmative procedure is required for any statutory instruments made under the power in the clause. Parliament will rightly make its voice heard on regulations made, but as the Prime Minister outlined in his Greenwich speech, the UK will always be an open, equal and fundamentally fair country. That will remain true regardless of EU membership or any other international agreement. We have not needed the EU to tell us what is appropriate in the field of equalities. For example, the EU provides a minimum of 14 weeks’ paid maternity leave, whereas Britain offers up to a year’s maternity leave, 39 weeks of which are paid, and the option to convert it to shared parental leave. Moreover, UK workers can get statutory sick pay for up to 28 weeks, whereas the EU has no minimum sick leave or sick pay legislation.

Promoting respect for British values, including equality, the rule of law and human rights, is and will remain a core part of our international diplomacy. That is what our continuity programme provides, alongside certainty to business and consumers. It is not, and never will be, about undermining equalities legislation.

I turn to new clause 22, tabled by Plaid Cymru Members. For the benefit of Members who have not sat on a Bill Committee before, it is entirely possible for those who are not members of the Committee to table an amendment—I would not recommend that course of action for Government Members—as we see the hon. Member for Arfon (Hywel Williams) and his colleagues have done. On Tuesday, in a debate on similar issues, I set out that it is an essential principle of the UK constitution that the negotiation of international trade agreements is a prerogative power of the UK Government. The prerogative power serves a crucial role in ensuring that the UK Government can speak with a single voice under international law, providing certainty to our negotiating partners.

Of course, international negotiations are a reserved matter under the devolution settlements—an area in which the UK acts on behalf of all the nations of the UK. These important principles are complemented by the UK’s dualist approach to international law, which provides that international treaties cannot of themselves make changes to domestic law—I think we will return to that this afternoon. This approach ensures that where our agreements require changes to UK domestic law, the UK Parliament will scrutinise and pass that legislation in the normal way. Where that legislation is made by the devolved Governments, the devolved legislatures fulfil that role. It is right that Parliament and the devolved legislatures should have that role, which is why we have provided that regulations made under clause 2 will be subject to the affirmative procedure.

We have also committed ourselves to not normally using the clause 2 power to legislate in devolved areas without the consent of the relevant devolved Administration, and never without consulting them. Combined with the scrutiny mechanisms in the Constitutional Reform and Governance Act 2010, which the hon. Member for Harrow West was so enthusiastic about 10 years ago, those procedures will ensure that the UK Parliament can see exactly what we have negotiated, and if it does not agree with it, can take steps to prevent the Government from implementing and ratifying the deal. There are therefore already rigorous checks and balances on the Government’s power to negotiate and ratify a new agreement.

By giving Parliament an automatic veto over trade agreements, the new clause would cut across those procedures and undermine the important constitutional principle that it is for the Executive to negotiate and enter into deals, and for Parliament to scrutinise them. The new clause would also give the devolved legislatures an automatic veto over our agreement, which would be wholly inappropriate given that this is a reserved matter. On a practical level, a veto for the devolved legislatures would also lead to a situation in which one part of the UK could prevent the rest from benefiting from an agreement.

The Government recognise the important role that the devolved Administrations and the UK Parliament can and should play in our trade agreements, and I welcome the opportunity to put that on the record again. My Department works closely, as I have outlined, with the devolved Administrations and Parliament to deliver trade policy and trade agreements that reflect the interests of the UK as a whole, but we should do so in accordance with the long-standing principles enshrined in our constitution, rather than seeking to undermine them. I hope that reassures the Committee. I ask hon. Members not to press their new clauses, and to agree to clause 2 standing part of the Bill.

Regulations under Part 1

Gareth Thomas (Labour/Co-operative, Harrow West)

I beg to move amendment 18, in schedule 2, page 11, line 26, leave out from “section 1(1)” to the end of line 27 and insert

“may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

This amendment would specify an affirmative resolution procedure for regulations under section 1(1).

I am grateful for the opportunity to speak to the amendment in my name and those of my hon. Friends. Let me make it clear that we have tabled this amendment recognising that the affirmative resolution procedure is not a perfect process by any means. It is, nevertheless, better than the annulment procedure, which Ministers currently have locked into the Bill. An affirmative process is vital, as without it the Government will have carte blanche to introduce regulations to implement the obligations arising from our independent membership of the GPA—the agreement on government procurement—without the slightest hint of anything resembling parliamentary scrutiny.

The negative resolution procedure the Government propose for regulations under clause 1(1) is the least rigorous of all the parliamentary procedures for scrutiny available to the House. The main point of the negative resolution procedure is to allow the Government to have their way without any need to bother with parliamentary democracy. Indeed, I am told that the last time a negative instrument was successfully annulled in the House of Commons was the Paraffin (Maximum Retail Prices) (Revocation) (No. 3) Order 1979.

International treaties cannot be easily repealed, but domestic legislation can be repealed much more easily. If ever there were an example of secondary legislation crying out for proper parliamentary scrutiny and oversight, surely this is it. I remind the Committee of the evidence we heard from Rosa Crawford of the Trades Union Congress. In response to Question 70 from my hon. Friend the Member for Sefton Central, she pointed out:

“The GPA as it stands has no requirement for members to promote social standards in their tendering process.”––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 49, Q70.]

The TUC is worried that, once we leave any kind of relationship with the European Union and no longer have to rely on the EU’s contract regulations, the UK Government may well roll back on those commitments to promote social standards through the tendering process that are currently locked into our law by EU directives.

Opposition Members remember—indeed, Rosa Crawford reminded us all as a Committee—that the Prime Minister and members of the Cabinet have talked many times in the past about wanting to repeal EU-derived rights on working time and agency workers, and other important protections for workers’ rights. Not surprisingly, the TUC is worried that that may well be the direction of travel with procurement regulations in the future.

It is therefore sensible to make sure we have a proper parliamentary process that allows us to explore whether, under the cover of minor technical changes to the GPA—no doubt the Minister will suggest to the Committee that that is all he intends this process for—our contract regulations and the standards associated with them are gradually being undermined and a race to the bottom on standards is under way. We consider the affirmative resolution procedure to be more appropriate than the annulment process in the Bill. However imperfect the affirmative resolution process, it at least provides Members with the possibility of a debate and a vote, and it is then of course up to us to make proper use of that opportunity. That is the spirit of amendment 18.

Greg Hands (Conservative, Chelsea and Fulham)

I begin by welcoming you to the Chair this afternoon, Sir Graham. I appreciate the concerns that there should be adequate parliamentary scrutiny of regulations made under the clause 1 power. I am satisfied that that is the case, and let me explain why.

As I have said, the power is intended to allow the UK to make technical changes—for example, to reflect new parties joining the government procurement agreement or existing parties withdrawing from it. In the case of a new or withdrawing party, it is important that the UK is able to respond quickly and flexibly. Once a new party deposits its instrument of accession, there is, under the rules of the World Trade Organisation GPA, a period of only 30 days before that accession comes into force. The UK will then be under an immediate obligation to provide that new party with guaranteed procurement opportunities covered by the GPA, and of course vice versa. If the UK failed to offer the new party this guaranteed access, we would be in breach of our GPA commitments. Equally, a party to the GPA can decide to withdraw unilaterally. When a party notifies the Committee on Government Procurement that it intends to withdraw, it will cease to be a GPA member just 60 days later. It is therefore vital that we are able to react quickly to such a notification, either to join or to withdraw.

If the power to amend UK legislation to reflect a party’s withdrawing from the GPA were subject to the affirmative resolution procedure, we might not be able to legislate in time to remove the party within the 60-day time limit. This could result in UK contracting authorities continuing to give a party that has left the GPA—companies from that country—guaranteed access to the UK’s procurement market that it is no longer entitled to have. Furthermore, the former party would have no obligation at the same time to give UK businesses reciprocal access to its procurement markets. I am confident that Members will agree on the need to regulate quickly in these instances, both practically so that UK businesses are not disadvantaged and to show good faith to the other party.

Bill Esterson (Labour, Sefton Central)

The Minister made great play two years ago of the idea that the affirmative resolution procedure takes 30 days longer than the negative resolution procedure. However, that is not an issue because the Government are notified months in advance that this is coming, and Government officials are able to put in place the necessary regulations, whether negative or affirmative. There is plenty of time to get ready to avoid the catastrophic outcome that the Minister describes.

Greg Hands (Conservative, Chelsea and Fulham)

The hon. Gentleman makes a fair point. In fact, accession to the GPA typically take some years, so in that sense it would have been telegraphed quite far in advance—the most recent party to join is Australia. But it would be inappropriate for us to ratify someone joining the GPA in advance of them actually depositing the papers, so although joining is a lengthy process, the actual ratification process is very short. That is the key difference in this case.

The Delegated Powers and Regulatory Reform Committee’s report on the Trade Bill 2017-19 raised no concerns, nor made any recommendations, about the use of the negative procedure in relation to this power. However, let me clear: when new parties are seeking to accede to the GPA, we will ensure that Parliament is kept informed. Parliamentary scrutiny is more effective before an accession is agreed, because that is when the views of Parliament can be taken into account.

Where a WTO member is seeking to join the GPA, it is our intention to notify Parliament, to keep the relevant Committee—in this case, the International Trade Committee—informed as the negotiations proceed, and to allow further discussion where desired. That is the right time for Parliament to be actively involved in a debate, for example, on Australia’s accession to the GPA—although the case of Australia is backward looking, of course, to when we were covered by the GPA through our EU membership. If there were such a case going forward, the right time would be during the discussions to the accession, not after the accession had been agreed.

I remind Members that there has already been parliamentary scrutiny of the UK’s market access schedules and the text of the GPA, which were laid before Parliament in line with the Constitutional Reform and Governance Act 2010. That process concluded without objection in 2019. Any further changes to the GPA, including the UK schedules prior to our accession, will again be scrutinised in line with CRAG.

I hope my comments provide reassurance to the Committee. I ask the hon. Gentleman to withdraw the amendment and commend schedule 2 to the Committee.

Gareth Thomas (Labour/Co-operative, Harrow West)

I was toying with being persuaded by the Minister until the intervention from my hon. Friend the Member for Sefton Central. Given what he said about the amount of telegraphing that Ministers will have about the changes and given the scale of scrutiny provisions that were included in the last Bill come the end of Report stage in the Lords and the Commons, which have now been taken out of the current Bill, I fear that on this occasion, I need to press the amendment to a vote.

The Trade Remedies Authority

Bill Esterson (Labour, Sefton Central)

I beg to move amendment 1, in schedule 4, page 15, leave out line 14 and insert—

“(a) a member to chair it, appointed by the Secretary of State with the consent of the International Trade Committee of the House of Commons,”.

This amendment would establish the requirement for Parliament, through the relevant committee, to give its consent to the Secretary of State’s recommendation for appointment to the Chair of the Trade Remedies Authority.

It is a pleasure to see you back for the final sitting of the Committee, Sir Graham.

I know that the Minister sometimes forgets what we said in our reasoned amendment, so in case he has forgotten again, I remind him that we recognised the desirability of—indeed, the need for—the UK to pass

“effective legislation to implement agreements”

and

“to set out the basis of a Trade Remedies Authority to deliver the new UK trade remedies framework”.

Yes, we do indeed support the creation of the Trade Remedies Authority. There it is again, for the avoidance of doubt, on the record. No doubt the Minister will claim otherwise, as he has done numerous times in the past two years.

Schedule 4 states that the Secretary of State will appoint the chair, who will in turn appoint the chief executive and non-executive members of the Trade Remedies Authority. The amendment is about how the appointment of the chair is carried out. The chair is appointed by the Secretary of State and in that process there is no recourse to Parliament or to other scrutiny of the appointment. The Secretary of State is therefore free to appoint someone in their own image, with the same political leanings and economic opinion—which is the more important point.

Indeed, although I have no idea of his politics, when Simon Walker gave evidence he gave every indication that he entirely agrees with the approach of the Secretary of State to trade remedies. I do not say that to denigrate Mr Walker. I have known him for a number of years and he is a well-travelled representative of business, who has had a number of different roles. The amendment is about not him as an individual, but the principle. It is about the opportunity to appoint someone with a particular approach to trade remedies and the appointment, in turn, of an unbalanced Trade Remedies Authority that looks only at the approach favoured by the Government.

The previous Secretary of State had advisers from Legatum and the Initiative for Free Trade. The current Secretary of State has an adviser from the Adam Smith Institute. It is clear what the main thrust of Government advice is on those matters.

Gareth Thomas (Labour/Co-operative, Harrow West)

Has my hon. Friend seen the evidence from the British Ceramic Confederation, which thought there was already a very strong ideological view on tariffs, protectionism and dumping? It highlighted, for example, the recent UK global tariff announcement and suggested that the Government’s pre-eminent view was that all tariffs are protectionist.

Bill Esterson (Labour, Sefton Central)

I am familiar with the evidence that my hon. Friend cites. It reminded us that the Minister has previously said in meetings—I believe he has put it in writing, too—that experts on trade would be appointed to these roles on a non-ideological basis. Yet the evidence on how the people are appointed to the roles suggests that the Government have one single approach, which is as my hon. Friend indicated.

The British Ceramic Confederation has set out concerns that include how global tariffs have been implemented. The way in which the Government tariff schedules have been set out causes a problem for many of the confederation’s members because of the small margins involved in the industry and because even small differences in tariffs between different countries creates a difficult problem for competitiveness.

The Government’s ideological direction of travel is about supporting consumers. The Minister will probably say that the Opposition are against the consumer interest, that we do not support consumers and that we do not think they should have access to good quality low-price imports. But that misses the point. Of course consumers are one of the interests and should be supported. Of course they have every right to be included, but they are one—not the only—consideration in these matters.

Gareth Thomas (Labour/Co-operative, Harrow West)

It is obviously important that we have the Trade Remedies Authority. Two industries particularly concerned to have it are steel and ceramics. Have there not been consistent concerns in the past about China and one or two other countries trying to dump steel products and ceramics into Europe for UK markets? We need someone robust enough to stand up to such practice, and perhaps only parliamentary scrutiny of that person will help tease that out.

Bill Esterson (Labour, Sefton Central)

My hon. Friend is right. We have discussed ceramics, and he has spoken in other debates about steel and how not having an international trade agreement with Turkey runs the risk, as we were told by UK Steel, of 15% tariffs being levied in one direction and creating a very uncompetitive situation in the streel industry.

However, this is a slightly different point. The point is about trade remedies and the example of steel. In the 2015 steel crisis, cheap imports of Chinese steel flooded the European market, often not of the same quality or standard, and our steel industry was in crisis. The steelworks at Redcar closed, despite the fact that it had world leading carbon capture and storage technology, which was lost for good. The international competitive advantage in that emerging technology has gone from this country, and the rest of our steel industry faced a very difficult time. There are difficult times again now, partly because of the covid crisis and because the Chinese economy has emerged more quickly. The Chinese went into it first and have come out of it first.

In the 2015 crisis, David Cameron’s Conservative Government were resistant to the use of trade defensive measures as part of the European Union. This country delayed the introduction of those measures and the lifting of the lesser duty rule, with the effect that we were very late to take the action needed. The loss of SSI at Redcar was one consequence. We took action too late and we did not take the same action as other countries, which were in a much stronger position to resist the dumping of Chinese steel as a result.

Gareth Thomas (Labour/Co-operative, Harrow West)

rose—

Graham Brady (Conservative, Altrincham and Sale West)

Order. Before you make your intervention, Mr Thomas, I remind you that last time you very helpfully tried to bring your colleague back to the very narrow terms of the amendment, by reference to parliamentary approval for the appointment. I hope that you will do so again.

Gareth Thomas (Labour/Co-operative, Harrow West)

Absolutely, Sir Graham. I was merely going to say that the need for parliamentary scrutiny of the chair of the TRA is surely even greater given the point my hon. Friend made about the risk of China perhaps again trying to dump steel or ceramic products into our markets. The Government have an appetite for joining the transatlantic partnership, which China also wishes to join—it has made that wish very clear. Does my hon. Friend not think that amplifies his point about the need for robust parliamentary scrutiny to check that we have a genuinely robust chair of the TRA?

Bill Esterson (Labour, Sefton Central)

Yes, that is absolutely right, and of course there must be a chair who balances interests in exactly the right way to do these things; in his evidence, Simon Walker said he hoped that would be the nature of the make-up of the Trade Remedies Authority.

However, hope is not a recipe for success and there must be parliamentary involvement to ensure that, whoever the chair is, they take measures when they are appointed, including receiving representations from across industry, employers and unions, consumer groups—I say to the Minister that we recognise the importance of consumers in these matters—and the devolved nations. My hon. Friend was right to raise this issue. That is why parliamentary scrutiny of the appointment of the chair matters; it is so that these points are picked up.

I will talk about the economic interest test: further evidence given to us by the British Ceramic Confederation. The confederation made the point to us that there is no explicit presumption in favour of adopting the measures in the European equivalent to the economic interest test. The European equivalent balances the interests of producer, worker, and regional and consumer groups; the problem with the economic interest test is that it looks at only one. The EU is cited:

“The need to eliminate the trade distorting effects of injurious dumping and to restore effective competition shall be given special consideration.”

That is what the EU says. There is the explicit reference to “special consideration”; that is the presumption in the EU model, which is not there in the UK equivalent. Currently, the Bill only infers this, which is why something on—

Graham Brady (Conservative, Altrincham and Sale West)

Order. The hon. Gentleman knows that I try to be generous, but with the best will in the world this is a very long distance away from the very tight wording in the amendment. I ask him to come back to the precise point of the amendment or draw his remarks to a close.

Bill Esterson (Labour, Sefton Central)

Absolutely, Sir Graham; I do apologise. The point that I am making is that there is this request to go on the record, and the Minister indicated earlier that this was the opportunity to do that. Perhaps he can put something on the record for the British Ceramic Confederation of the nature that they have written to him about and that I have just referred to.

I bring the discussion back to the amendment.

Gareth Thomas (Labour/Co-operative, Harrow West)

One of the issues that Parliament would surely want to scrutinise is the role of the chair of the TRA in the appointment of the other board members. Some of the evidence presented to us makes clear a fear that some of the trade remedy experts that a putative chair of the TRA might want to bring on board will not be enthusiastic about keeping competition fair. Rather, they might want to turn a blind eye to the dumping of products in the UK, to create unfair competition with British companies.

Bill Esterson (Labour, Sefton Central)

My hon. Friend is right, and that is what the amendment is about. It is about ensuring that, when cross-examined—presumably by the Select Committee—the chair is asked whether they will take a robust approach in their appointments to the Trade Remedies Authority, to protect British industries, including the steel sector, ceramics, dyers, chemicals and pharmaceuticals, all of which trade remedies are likely to be involved in. That is the basis for the amendment. I hope the Minister will deal with the point that the British Ceramic Confederation asked him to deal with. Fundamentally, this is about ensuring that the chair is scrutinised properly, to ensure that there is a balance in the competing interests.

Gareth Thomas (Labour/Co-operative, Harrow West)

Another concern about trade remedies that it would be useful for Parliament to raise with the chair of the TRA is the chair’s attitude to the international dispute resolution process, because the TRA will not be acting in a vacuum—a case of dumping of products in the UK market might have to go up to the World Trade Organisation dispute resolution process, which is currently not functioning. Would it not be sensible to be able to hear from the putative chair of the TRA their view on the connection between the UK TRA and the WTO’s currently blocked dispute resolution process for dumping cases?

Bill Esterson (Labour, Sefton Central)

That is an excellent example of what a parliamentary hearing would be used for. The model that we seek to emulate is the one used for the Office for Students, although that is not the only example of where parliamentary hearings are used before a chair of a body of this nature is appointed. The Office for Students uses that exact process to ensure that the chair appoints people who have a wide range of interests, rather than a narrow approach. We advocate a model along those lines, with the chair interviewed by the Select Committee.

Gareth Thomas (Labour/Co-operative, Harrow West)

Were I involved in such a parliamentary scrutiny process for the putative chair of the TRA, I would want to know, as I hope my hon. Friend would, the attitude of the chair to the EU-led multi-party interim appeal arbitration process, which is an attempt to get around Donald Trump’s blocking of the appointment of judges to the WTO dispute resolution process. That is surely a sensible scheme for the UK to join, and we would want to hear that the putative chair was supportive of it. The Minister has, again, been studiously vague on whether the UK would want to be part of such a sensible anti-dumping process.

Bill Esterson (Labour, Sefton Central)

It would be important to ensure that, in the absence of the WTO functioning properly, international alternatives were being considered. Asking the chair their view of those proposed measures and our attitude to international co-operation is extremely valuable. I am glad my hon. Friend raised that point.

Gareth Thomas (Labour/Co-operative, Harrow West)

I hesitate to test my hon. Friend’s patience. Were I to catch your eye, Sir Graham, when schedule 5, on staff transfer schemes, is being debated, I would be interested to explore the scope for members of staff moving from the Department for International Trade to the TRA, to get some experience of both the WTO dispute resolution process and the new multi-party interim appeal arbitration process. Again, does my hon. Friend not think that we should find out the attitude of a putative chair of the UK TRA towards staff transfers so as to get such expertise before they need to deploy it in a UKTI context?

Graham Brady (Conservative, Altrincham and Sale West)

Before you respond, Mr Esterson, I gently point out that we have had some wonderful illustrations of some of the questions that might be put to the putative chair of the TRA, should the amendment be passed. We have probably had enough to get an idea of the argument being advanced.

Bill Esterson (Labour, Sefton Central)

Sir Graham, I am guided by you. The Chair is always right and I completely accept your point. The Minister may choose to respond to the excellent suggestions that my hon. Friend the Member for Harrow West has made, but I think we have made the case that the chair of the TRA should be interviewed and there should be adequate parliamentary scrutiny of his or her appointment.

Greg Hands (Conservative, Chelsea and Fulham)

I would like to start by repeating what I said in 2018 when I first took this clause through a Committee and what I and others have said since: this Government are committed to creating an independent and objective investigation process in which businesses and consumers will have full confidence and to setting up the Trade Remedies Authority with the right pool of skills, qualities and experience.

I recall that broad agreement was evident for the principle of an independent impartial body during the previous debate on the TRA during the Trade Bill’s 2017 to 2019 passage. Without wishing to linger on the point, my startlement that the Opposition are so opposed to this legislation increases, although they claim to support all its parts.

Many will know that the World Trade Organisation allows its members to take action to protect domestic industries against injury caused by unfair trading practices, such as dumping, subsidies or unforeseen surges in imports. Quite to the contrary of what I think the hon. Member for Harrow West said, nobody wants to turn a blind eye to dumping. It is quite the opposite, but we can only do that with a functioning and legally operating Trade Remedies Authority.

Where there is evidence that dumping is happening, countries are permitted to put measures in place to remedy the situation, hence the term “trade remedies”. Measures usually take the form of an increase in duty on imports of specific products following an investigation. Establishing an independent trade remedies function is integral to the UK’s new independent trade policy. We must get it right. Decisions on trade remedies cases can have profound impacts on markets and on jobs, and that is why we need to create an independent, objective investigation process that businesses can trust. We will be appointing the best people.

Gareth Thomas (Labour/Co-operative, Harrow West)

The Minister is absolutely right. We need a functioning TRA and we need a functioning trade remedies system. However, decisions that the TRA makes can be challenged and taken up to the WTO. As he knows, there is not a functioning dispute settlement process at the WTO at the moment. Why is there still such resistance from the Minister to joining the multi-party system that the EU has proposed to try to get around Donald Trump’s objection to the WTO dispute resolution process?

Greg Hands (Conservative, Chelsea and Fulham)

I hear what the hon. Gentleman has to say, and I think he is wrong to say that there is resistance, but I gently suggest that the matter is without the scope of the Bill, interesting though that topic and the future of the WTO might be.

We will be appointing the best people to the TRA, including the non-executive members of its board. As with any public appointments, the appointment of non-executive directors will be subject to the well-established rules that govern public appointments of this kind.

Amendment 1 seeks to give the International Trade Committee the statutory power to approve or veto the appointment of the TRA chair. It is established practice that decisions on public appointments are for Ministers who are accountable to Parliament and the public for those decisions. The Cabinet Office “Public Bodies Handbook” explicitly states that Ministers normally appoint the chair and all non-executive members for non-departmental public bodies.

Following the Liaison Committee’s report in 2011, further guidance was issued by the Cabinet Office setting out the tests for determining which non-departmental public body appointments should be subject to pre-appointment scrutiny. That guidance makes it clear that pre-appointment scrutiny should apply only in respect of three types of post:

“i. posts which play a key role in regulation of actions by Government; or

ii. posts which play a key role in protecting and safeguarding the public’s rights and interests in relation to the actions and decisions of Government; or

iii. posts in organisations that have a major impact on public life or the lives of the public where it is vital for the reputation and credibility of that organisation that the post holder acts, and is seen to act, independently of Ministers and the Government.”

In my view, none of those three requirements is met. The TRA is not a regulator, it does not protect or safeguard against the actions and decisions of Government, and, although we believe it is important for business confidence that it is seen as independent of Ministers, it is not an organisation that can be described as having a major impact on public life or the lives of the public.

I turn now to a few other points that cropped up. On EU remedy measures, we have been clear that we will transition appropriate measures into the UK. We have launched transition reviews of those, and we have consulted and will continue to do so. The economic interest test is a matter for the Taxation (Cross-border Trade) Act 2018, but there is of course a presumption in favour of measures in that Act.

On the engagement of trade unions, Simon Walker and the interim body—the Trade Remedies Investigations Directorate—met the Trades Union Congress yesterday and is engaging unions frequently. I remind the Committee that the board are not the decision makers on trade remedies; they set the strategy and hold the chief executive and the executive to account. There is no role for the TRA at the WTO or any involvement with the appellate body. I believe that I have responded to the British Ceramic Confederation letter, but I will study carefully what is in it.

Under the provisions of schedule 4, to which we will turn shortly, the TRA must produce an annual report, which the Secretary of State must lay before Parliament. The TRA will also be subject to the scrutiny of the National Audit Office and parliamentary Committees. In addition, complaints against it can be considered by the Parliamentary and Health Service Ombudsman, who may also share information with Parliament. I hope that that reassures the Committee that the amendment is not appropriate, and I ask the hon. Member for Sefton Central to withdraw it.

Bill Esterson (Labour, Sefton Central)

The Minister made a number of interesting comments. He talked about businesses and consumers having full confidence in the Trade Remedies Authority. He did not mention workers, and he did not mention the devolved Administrations in that statement at the start of his response. I am sure that causes concern.

The Minister spoke about the need to act independently and repeated the point about business confidence. He has also made the point that the TRA needs to be an organisation that business can trust. But if it is to be independent, there needs to be scrutiny of appointments. He said that a reason why it does not come under the code for appointments to be approved, other than by Ministers, is that it does not have a major impact. Trade disputes have major impacts. I mentioned the SSI closure; that was 5,000 jobs. I am shocked that the Minister does not regard that kind of incident as having a major impact. I am sure that workers up and down the country would share my concern on that point.

Greg Hands (Conservative, Chelsea and Fulham)

I have checked exactly what I said. I said, “organisations that have a major impact on public life”. I did say that it would have a major impact on jobs, but I think “public life” would be considered more broadly than the immediate jobs of a particular workforce, important though they are. We are talking about the broader public.

Bill Esterson (Labour, Sefton Central)

The Minister is in danger of dancing on the head of a pin with his phrases. Honestly, 5,000 jobs is not a major impact on public life? I think the people of Redcar and the north-east would disagree with him strongly about that.

It is essential that we have this system of scrutiny in place. There are pre-appointment scrutiny sessions for many roles in public life. The Minister set out the rules—I think he set them out correctly—but he also gave us, in his description of what is independent, and in the phrase “major impact on public life”, an argument in favour of our amendment. For that reason, we will press it to a vote.

Stewart Hosie (Scottish National Party, Dundee East)

I beg to move amendment 35, in schedule 4, page 15, leave out lines 27 and 28 and insert—

“3 A person holds office as a member of the TRA for a fixed period of five years from the date of appointment.

3A A person is eligible for renewal of appointment for a further fixed period of five years upon the expiry of the first period.”

Graham Brady (Conservative, Altrincham and Sale West)

With this it will be convenient to discuss amendment 36, in schedule 4 page 16, line 11, at end insert—

“10A A person shall be considered unable or unfit if the Chair is satisfied as regards any of the following matters—

(a) that the person becomes insolvent,

(b) that the person has been convicted of a criminal offence,

(c) that the person is otherwise unable or unfit to discharge the functions of a member or is unsuitable to continue as a member

Stewart Hosie (Scottish National Party, Dundee East)

Amendment 35 would establish a fixed period of office for members of the TRA and make provision for one further period of office. The reason is rather obvious. Introducing a fixed term would give TRA members greater security of tenure and therefore reinforce their independence and impartiality, as their duration of service could not be—or certainly could not be perceived to be—at ministerial discretion.

Amendment 36 would insert wording stating that a person should be considered unable or unfit if the chair is satisfied regarding any of the following matters: that the member becomes insolvent, has been convicted of a criminal offence or is

“otherwise unable or unfit to discharge the functions of a member or is unsuitable to continue as a member.”

The effect would be to define, to a greater extent at least, the meaning of “unable or unfit” in paragraphs 9 and 10 of schedule 4. Introducing a definition of “unable or unfit” would provide greater legal certainty about the circumstances in which a person may be removed from office as a non-executive or executive member of the TRA.

In keeping with the amendments and new clauses that I have spoken to so far, I do not intend to divide the Committee on amendments 35 or 36, but I ask the Minister to consider carefully how the Government might bring forward amendments at a later stage to deal with the matters of a fixed term for, and legal certainty on dismissal from, the TRA. Doing so would remove the perception that a term on the TRA, or dismissal from it, might be based on any political consideration—a perception that would weaken the credibility of the TRA—and strengthen the independence of that body. That is vital, particularly as the TRA will be invited to consider the vexed issue of some questionable, and potentially illegal, trade practices. The TRA’s credibility will be incredibly important when that particular work is undertaken, especially in the absence of a fully functioning WTO appellate board.

The Government should look again, as the Bill progresses through the other place and on Report, at how a fixed term for members might be introduced and at how legal certainty on dismissal might also be written into the Bill.

Greg Hands (Conservative, Chelsea and Fulham)

Clause 5 will allow the TRA to be established as a new non-departmental public body, and schedule 4 outlines its governance arrangements. Those include detailing how TRA members will be appointed and how the terms and conditions of their appointment will be established. Such provisions should be familiar to those with experience of working with similar bodies.

It is crucial that the right people are appointed as members of the TRA. We are committed to appointing on merit following fair and open competition. That is why we are following standard Cabinet Office guidelines on the appointment of members of the TRA, as set out in the “Governance Code on Public Appointments”, which states that it is usual for Ministers to decide on the length of tenure. The code also sets out

“a strong presumption that no individual should serve more than two terms or serve in any one post for more than ten years”,

other than in exceptional circumstances.

Appointments will be independently regulated by the Commissioner for Public Appointments to ensure that the rigorous principles of public appointments and the “Governance Code on Public Appointments” are applied. Beyond that, the Government and the TRA will have regard to the need to protect the resilience of the board and to ensure that there is a managed turnover of members now and in the future. That may mean, for example, that it is sensible to make some of the initial appointments to the board shorter than five years to stagger any turnover in membership.

Specifying those details in the contractual terms for each appointment is the best way to ensure the flexibility to get the organisation off to the best start. The role of the TRA chair designate is crucial in shaping and forming the board. It is therefore only right that the Secretary of State does that through the terms and conditions for each role in consultation with the chair designate, rather than binding their hands in legislation. We are working closely with the TRA’s chair designate, Simon Walker, to start the recruitment of the rest of the TRA board members in due course. We will specify the duration of appointments as part of that process.

By contrast, amendment 35 would replace the contractual terms for all TRA members with a fixed statutory period of either five or 10 years, with no provision for any other length of tenure. That would deny the TRA the flexibility that it needs, particularly now when we are trying to ensure the best possible start for the new organisation, but such a rigid approach would be detrimental to its good governance at any time.

Amendment 36 seeks to specify a number of criteria that would deem a member of the TRA board unfit to continue in their position. Schedule 4 already provides for the Secretary of State to remove non-executive members, and for the chair to remove executive members, from the board should they be deemed unable or unfit to carry out the functions of the office. That approach will be familiar to hon. Members from the legislation establishing organisations such as the Competition and Markets Authority.

As with all public appointments, the terms and conditions for the non-executive members of the TRA are being developed in line with the “Code of Conduct for Board Members of Public Bodies”, which clearly sets out the standards expected from those who serve on the boards of non-departmental public bodies. The code provides that members of the board must inform the sponsor Department of any bankruptcy, unspent criminal conviction or disqualification as a company director in advance of appointment, or should any such instances occur during the appointment.

The code does not expressly specify that those issues determine an individual’s fitness to serve on a board or that they should be regarded as grounds for terminating an appointment, but I assure the Committee that the Government consider that that should be the case. That is why the terms and conditions of Simon Walker, the TRA chair designate, provide that the Secretary of State may terminate his appointment in those circumstances. It is very much our expectation that the relevant terms of appointment for other non-executive members will follow a similar approach.

The appointment of executive members is a matter for the TRA chair. It is therefore appropriate that the terms and conditions of their employment are managed by the TRA in a way that enables flexibility, while holding its staff to the necessary standards of integrity and professionalism.

I hope that the demonstrates to the hon. Member for Dundee East that we are establishing the TRA in accordance with the existing codes and in line with the practices adopted in other such bodies. I therefore ask him to withdraw his amendment.

Stewart Hosie (Scottish National Party, Dundee East)

I have no intention of pressing the amendments. I listened carefully as the Minister rattled through that answer. I have no doubt that, with the exception of the specific point he made about staggering five-year terms at the very beginning, things are being done in line with guidance that has been used previously. However, that does not really answer the point that, because of the ministerial discretion, particularly on the removal of a member, there may still be a perception, real or otherwise, that members can be removed for considerations that are political and nothing to do with their actual unfitness to serve.

While I will not divide the Committee on the amendment, notwithstanding that the Minister read his answer very quickly, the Government may want to seriously consider how these matters are addressed. I beg to ask leave to withdraw the amendment.

Bill Esterson (Labour, Sefton Central)

I beg to move amendment 2, in schedule 4, page 19, line 26, at end insert—

“no later than 1 August of the calendar year in which the last day of the financial year covered by the report falls”.

This amendment would ensure that the Secretary of State must lay the annual report of the Trade Remedies Authority before Parliament within a reasonable time frame.

Graham Brady (Conservative, Altrincham and Sale West)

With this it will be convenient to discuss amendment 3, in schedule 4, page 19, line 26, at end insert—

“Recommendation reports

31A (1) The TRA must prepare a report on each of the individual recommendations it makes to the Secretary of State in connection with the conduct of an international trade dispute.

(2) The report must accompany the recommendation submitted to the Secretary of State.

(3) The Secretary of State must lay the report before Parliament as soon as reasonably practicable, and not later than five days from the time it is submitted to the Secretary of State by the TRA.”

This amendment would ensure that Parliament is kept informed, in a timely fashion, of the individual recommendations made by the Trade Remedies Authority to the Secretary of State in connection with cases of dumping, foreign subsidies and import increases causing injury to UK producers.

Bill Esterson (Labour, Sefton Central)

As with amendment 1, it is the lack of scrutiny that we are opposed to, not the creation of the Trade Remedies Authority. That is the subject of amendments 2 and 3, which are particularly important—as my hon. Friend the Member for Harrow West reminded us in the debate on amendment 1—in the absence of an effective WTO and given the concerns about international co-operation and collaboration on important matters that can lead to damaging trade disputes.

The amendment requires that the Secretary of State lay the annual report of the TRA before Parliament

“no later than 1 August of the calendar year in which the last day of the financial year covered by the report falls”,

and amendment 3 requires that a report is prepared for Parliament in a timely fashion on each recommendation made to the Secretary of State.

Parliament should be able to scrutinise the work of the TRA to ensure that it is working in the best interests of the UK economy and all of its components. Such requirements are nothing new in the realm of trade remedies. In the European Union, the Commission is obliged to report to the European Parliament. This is supposed to be a continuity Bill; the continuity in this case would be to apply equivalent processes in the UK to what we had in the EU.

The report to the European Parliament is obliged to give MEPs statistics on the cases opened and the number of measures adopted. MPs here should be given the same information by our TRA so that they may scrutinise its work. MPs should be able to look at the number of cases initiated and the number of measures adopted, and therefore be able to judge whether the TRA is taking measures to defend our industries and jobs, and is working with the devolved authorities—not just putting the consumer interest first, at the expense of producers, jobs, and the regions and nations of the country.

Industry would be more comfortable if there was a more rigorous approach for parliamentarians to get involved in the setting of the rules for the system—it is not just us saying this, but industry, and both sides of it. As in the rest of the Bill, the Government propose nothing on parliamentary oversight or scrutiny of the TRA. Yet again, they want to make decisions that will have profound impacts—on key sectors of industry, on thousands of jobs and on the regions and nations—behind closed doors, without scrutiny and without accountability to Parliament. Unless that scrutiny is there in law, there is no guarantee that it will happen.

Giving parliamentarians an oversight power over the work of the TRA would ensure proper scrutiny and accountability. A weak trade remedies regime is of benefit to nobody in our country. If anybody thinks that having a weak regime will open up trade opportunities with international partners, they are mistaken. Partner countries will take advantage of that, once again, and we will see the loss of jobs that we saw in the steel sector in 2015 and 2016. It is only right that this House gets to scrutinise the work of the TRA to ensure that it is doing its job properly.

Greg Hands (Conservative, Chelsea and Fulham)

I recognise the desire of Opposition Members to ensure that our trade remedies system is impartial, objective and transparent. Those have been our guiding principles, too.

That is why we are establishing the Trade Remedies Authority as an arm’s length body and why we will require the TRA to produce a report on the performance of its functions during each financial year, which the Secretary of State must lay before Parliament. The Bill requires that to be produced

“as soon as reasonably practicable”

after the end of that financial year. That is in line with other arm’s length bodies, such as the Office for Nuclear Regulation and the Nuclear Decommissioning Authority.

Imposing a fixed deadline by which the TRA’s annual report must be laid before Parliament is unnecessary. Prioritising an arbitrary deadline over ensuring a full and detailed report for Parliament and businesses to scrutinise is in no one’s interests. I am sure that the TRA, like all other NDPBs, will use its best endeavours to publish the annual report as quickly as possible following the end of the financial year. It is of course possible that that could be within the timeframe suggested in the proposed amendment. However, the TRA statement of accounts must be certified by the Comptroller and Auditor General before being laid, and that reliance on processes outside the TRA’s direct control makes it unreasonable to set a deadline for publication in statute.

The TRA’s annual report will follow best practice on openness and accountability as set out in the Cabinet Office publication, “Public Bodies: A Guide for Departments”, which provides a clear structure of best practice requirements, although we recognise that these will not be specific to each organisation that they cover. As with all non-departmental public bodies, we expect the TRA to follow best practice for an organisation of its type and to include appropriate performance indicators, rather than that being set by statute. As a new organisation, it is important to ensure that the TRA has the flexibility to develop and adapt these key performance indicators as it settles into its functions and continues engagement with stakeholders.

Amendment 3 focuses on the TRA’s provision of advice and assistance to the Secretary of State regarding international trade disputes. It would require the Secretary of State to share information related to that advice and assistance with Parliament within five days of the TRA’s submitting it to the Secretary of State. Clause 6 sets out the functions of the TRA, allowing it to advise, support and assist the Secretary of State in the conduct of an international dispute, but does not give the TRA responsibility for the handling of international trade disputes. These are, rightly, a matter for the Government to either initiate or to defend.

However, while the responsibility sits with the Government, we need to ensure that we can draw on the most relevant skills and expertise to best represent the UK’s interests. A large proportion of international trade disputes relate to trade remedies. We are setting up the TRA as an expert, specialist body to operate the UK’s trade remedies system, and it will therefore have crucial expertise to bring to bear. First, there may be cases where TRA investigations have led to the imposition of measures that are subject to dispute. In those instances, the TRA will hold much of the detailed information and evidence required to construct and run the UK’s defence.

Secondly, the Government will also need the TRA for advice and assistance in the event that we take offensive action against measures imposed on UK imports by other countries. In these instances, the TRA’s expertise will be significant in assessing whether the correct procedure has been followed in imposing measures against the UK. I am sure Committee members agree that it would be inappropriate and detrimental to the UK’s interests to require this information to be made public in such circumstances. Doing so could prejudice the UK’s position in sensitive international discussions. Indeed, the stipulation that information be shared with Parliament within five days of it being submitted to the Secretary of State could mean that it is made public before the Government are able to lodge our application or response with the relevant dispute settlement body or arbitral panel. That would be detrimental to the UK’s interests and cannot be what Opposition Members intend. I hope that what I have said reassures the hon. Member for Sefton Central, and that he will withdraw the amendment.

Bill Esterson (Labour, Sefton Central)

The Minister has certainly given us some rationale. I take him at his word on the practical reasons why the amendments would not do what we intended. However, it is important that we scrutinise the TRA’s work on individual investigations in realtime. I am sure there are alternative ways of doing that in Parliament—bringing reports before Select Committees, for example, where there is need to handle scrutiny sensitively if commercially confidential information is involved. Perhaps the Minister can bring some of those back to us.

Provision of advice, support and assistance by the TRA

Bill Esterson (Labour, Sefton Central)

I beg to move amendment 28, in clause 6, page 4, line 22, at end insert

“and

(c) analysis of the impact of any exercise by the Secretary of State of the power under section 15 of the Taxation (Cross-border Trade) Act 2018 (as amended by section 94 of the Finance Act 2020) to vary an amount of import duty if he or she considers that it is appropriate to do so.”.

Amendment 28 would require an analysis of any exercise by the Secretary of State of the power under section 15 of the Taxation (Cross-border Trade) Act 2018, which I assume will be amended when the Finance Bill achieves Royal Assent, to vary import duty as she—it is “she”, at the moment—considers appropriate. This is a move away from working within the rules-based system. I entirely accept that there is a challenge because of the situation with the WTO; my hon. Friend the Member for Harrow West and I raised this in relation to other matters to do with the Trade Remedies Authority. This is an enormous step, and a great deal of power that the Secretary of State is potentially granting herself, or being granted by the Finance Bill, assuming it goes through, and there is presumably a role for the Trade Remedies Authority in scrutinising that.

Charlotte Nichols (Labour, Warrington North)

On a point of clarification, my constituency manufactures one fifth of the world’s gin. Would my constituents be impacted by the measures that my hon. Friend refers to?

Bill Esterson (Labour, Sefton Central)

I am glad that my hon. Friend has had the chance to put on record the fact that Warrington is home to a fifth of the world’s gin. I know that she has been looking for the opportunity, and she has found it. The Times does not record whether gin is in the sights of the President of the United States for increased tariffs, but it would not surprise me. The list of proposed tariffs includes cakes, vodka—it does not say gin—potatoes, chocolate and cheese. Some of those are from the UK, but all of them are from the UK and Europe together. The article states:

“The EU has accused the US of providing state aid to Boeing, the American aircraft manufacturer, and is seeking to apply tariffs on $11.2 billion of US goods.”

We await a ruling from the WTO. As we have discussed, that is not without problem, and the dispute over aircraft subsidies goes back over a decade.

I mention those examples because they show just why it is important to get this right. The proposed change to the cross-border trade Act is relevant to the Bill as well, because that Act created the powers of the Trade Remedies Authority that we are setting up belatedly in this Bill. A power is being created here to vary rates of import duty in an international trade dispute. As I have just described, that power is significant and of great concern. This needs to be done correctly, because once a trade dispute starts it can grow and become a much bigger problem. That is why the amendment proposes a role for the Trade Remedies Authority. It is entirely consistent with the Bill, which says that the Trade Remedies Authority’s responsibilities include scrutiny and advice. We are suggesting that advice be given to the Secretary of State before she uses the new power.

The Secretary of State can act if she considers that to be appropriate. That sounds enormously wide-ranging. I have concerns that, without adequate scrutiny and the involvement of the appropriate organisation, mistakes might be made. They might be made in good faith, but we want the best possible evidence base to ensure that trade remedies of the sort that these powers envisage are used in the right way.

In the Finance Bill Committee, the Treasury Minister was asked a number of questions, and I would like to ask some of them to this Minister, because he might have had a chance to look at them. The answers will inform our view on whether, through our amendment, we are seeking the right power. The Treasury Minister said that provisions in various international trade agreements allow the UK to vary the amount of import duty applied to goods in the context of a dispute. Will this Minister please tell us what those provisions are? That was not clear from what the Treasury Minister said in the Finance Bill Committee.

The Treasury Minister described the provision in the Taxation (Cross-border Trade) Act 2018. Will this Minister tell us why a provision that was included in legislation only two years ago has now been found to be inadequate? What has changed in two years? Some of these problems with the WTO were entirely apparent even in 2018.

Who is advising the Government that the legislation is inadequate, and that the Secretary of State needs this additional power? The Treasury Minister said that, in certain circumstances, countries are within their rights to impose additional tariffs quickly in response to the actions of other WTO members, and where necessary outside WTO proceedings. If that is the case, why is that not sufficient for what the Government are trying to achieve?

The Treasury Minister referred to the problems with the WTO appellate body, which he rightly said had stopped working. He neglected to say that that was the result of President Trump declining to appoint to it. Will this Minister say what the Government are doing to ensure that President Trump appoints to that body?

The Treasury Minister appeared to say that the problems with the WTO appeals system meant that the UK Government should operate outside the WTO. Is there not a danger of our further undermining the WTO if we are not careful in how we go about doing that?

In the Finance Bill Committee, the Treasury Minister said that the change to the Finance Bill was similar to one being proposed by the EU. Will this Minister give further details of what the EU has said and done to give itself such powers?

The Treasury Minister said that the Government recognise the importance of having regard to relevant international arrangements. Will this Minister tell us what those arrangements are, and how the new powers will be exercised in line with international law and our rights as an independent WTO member?

Will the Minister tell us what initiated this change in a law that was so recently passed? Was it the digital sales tax and fear of retaliatory action by the United States, for example? The Treasury Minister reiterated the Government’s support for the international rules-based system. We agree on its importance. He indicated that any changes in import duty would be made by statutory instrument. That is a familiar concern in our deliberations on the Bill.

I said the amendment was about scrutiny, and it is. It is about delivering the right amount of scrutiny to ensure appropriate use of the power. Our concern is that the change to the cross-border trade Act allows the Secretary of State to take significant action where she considers that to be appropriate. That is a very large power for her to be awarded if there is not adequate scrutiny. It is not enough for the Secretary of State to deem something appropriate without adequate scrutiny.

On the Scotch whisky industry, I mentioned the 25% tariff because of US actions regarding Airbus and Boeing. Disputes have spill-over effects on other parts of the economy. Will the Minister tell us the reasons for the change and for giving this big new power to the Secretary of State, and will he give serious consideration to what we are proposing? It seems to be entirely consistent with the remit of the Trade Remedies Authority as set out in the Bill.

Greg Hands (Conservative, Chelsea and Fulham)

As we have heard, amendment 28 seeks to create a new role for the TRA in analysing the impact of retaliatory or rebalancing duties imposed by the Secretary of State as a result of an international dispute. We should perhaps remind ourselves of the roles and responsibilities relating to international disputes, and the purpose behind the provision in the customs Act—to give it its proper title, the Taxation (Cross-border Trade) Act 2018—which the amendment refers to, and which the hon. Member for Sefton Central has been referring to as well.

Before going into the detail, I will say a couple of things about some of the broader issues that the hon. Gentleman has raised. The Airbus-Boeing dispute is clearly not directly within the remit of amendment 28, but it is not, I suppose, so far from it. Let me be clear about today’s announcement. We oppose the tariffs coming from the US vigorously. We find them unnecessary and harmful to trade between the US and the UK. We have raised our opposition with the US trade representative in person in recent weeks. I confirm to the Member for Warrington North that my understanding is that gin is included. There is not a decision to impose tariffs on gin, by my understanding, but gin is one of the products they are actively looking at.

On the questions that the hon. Member for Sefton Central asked about the Finance Bill, I think I am best off offering to look at those, and the most appropriate Minister will respond to him. As a former Treasury Minister, I am slightly mindful that the questions are probably within the Treasury’s area, and it may be better for the Treasury to respond. I do not think that there will be time to respond before the sitting ends at 5 o’clock in any case. However, contrary to what he suggested, it is highly unlikely that a Treasury or other Minister has said that we should operate outside the World Trade Organisation’s rules in the cases that he raised.

Section 15 of the Taxation (Cross-border Trade) Act provides for the Secretary of State to change the amount of import duty that applies to certain goods as a result of an international dispute. There are several scenarios under which that could come about. The first is if the UK has successfully challenged trade-restrictive measures imposed by another WTO member under the WTO’s dispute settlement system. If the other member fails to comply with the WTO’s ruling in favour of the UK, the UK Government would be able to impose duties to redress the issue.

Secondly, if there is a dispute between the UK and one of our partners under the terms of a free trade agreement, the UK may be able to impose retaliatory duties. Thirdly, there is the possibility that the UK could be subject to a dispute in the WTO, or as part of an FTA, and be required to provide compensation to the relevant WTO member or FTA partner. That conversation could take the form of imposing lower duties on certain goods. I reassure Members that variations in import duties in response to trade disputes are intended to be temporary in nature, and will be removed when action has been taken by the country or territory in question to bring itself into compliance.

What is clear from all this, and what Parliament has already accepted in passing the Taxation (Cross-border Trade) Act, is that it is for the Government to decide whether it is necessary to change import duties as a result of a dispute. We should be clear, however, that the resulting duties, whether higher or lower, are not trade remedies measures. That is the problem with the amendment.

Although the Trade Bill enables the TRA to provide expert support to the Secretary of State in order to build the evidence base for decisions on international disputes where needed, as we have already discussed during our consideration of amendment 3, the TRA does not have a role to play in determining duties arising from international disputes, and those duties are not trade remedies measures. Interesting though they may be to the Opposition, that would expand the role of the TRA into areas for which it is not intended. The TRA will be the UK’s expert body on trade remedies—that is the reason we are establishing it. It will not have the wider remit that the amendment would confer on it. I hope the Committee will agree and I ask the hon. Member for Sefton Central to withdraw the amendment.

Bill Esterson (Labour, Sefton Central)

That was a quite remarkable finish. I think the Minister said that the TRA will be the UK’s expert body on trade remedies.

Greg Hands (Conservative, Chelsea and Fulham)

Yes.

Bill Esterson (Labour, Sefton Central)

Yet it is not going to be able to get involved in helping the Secretary of State by advising her where she might vary import tariffs in the event of an international trade dispute. Clause 6(1)(a) refers to

“the conduct of an international trade dispute”,

which seems to be entirely the right place to be looking for support for the Secretary of State when she is being given remarkable and unusual powers. If that support does not come from the Trade Remedies Authority, the Treasury will be advising, but it is a role for the Secretary of State for International Trade, not for the Chancellor.

The Minister correctly said that aspects of what I have asked about are for Treasury Ministers, but this is a responsibility of the Secretary of State for International Trade. That is why it has come to this Bill Committee; there is not another opportunity to deal with this issue. It is entirely relevant to look at support from within the Department for International Trade, which is why we tabled the amendment. I am concerned that the Minister has not come back with an alternative to how this power might be used.

Greg Hands (Conservative, Chelsea and Fulham)

I would not normally intervene on the hon. Gentleman’s summation, but I think he is confusing two things: he is confusing an international trade dispute, the result of which may be retaliatory tariffs or some kind of other tariff action, with a trade remedy, which is in place to prevent something like the dumping of products where the UK is a producer of those products. They are fundamentally different things. The Trade Remedies Authority is set up to deal with trade remedies, not per se with the subjects of international trade disputes.

Bill Esterson (Labour, Sefton Central)

Not per se. The clause states:

“The TRA must provide the Secretary of State with such advice, support and assistance as the Secretary of State requests in connection with—

the conduct of an international trade dispute”.

It is not just about prevention, but about the conduct of an international trade dispute. We will end up disagreeing on this issue. With the way that the Bill is crafted and the way that the Government are setting up the Trade Remedies Authority, this was an obvious place to be looking to give the Secretary of State support and advice. Given that that is one of the key functions of the Trade Remedies Authority, it would be wise for her to have support in making such decisions.

I will wait for the Minister’s response to my questions. I think the problem was that the Treasury Minister was not able to answer them because they are technically challenging. The questions he was asked were difficult, so I am not surprised by what he says about answering a little later. It is very important that we get this right. Perhaps he can come back with exactly how advice and support will be given to the Secretary of State. I gave the examples at the start because they are current and show just how serious these issues are, and it is really important that we get them right. So I will wait to hear back from him. In the meantime, we will test the will of the Committee.

Collection of exporter information by HMRC

Stewart Hosie (Scottish National Party, Dundee East)

I beg to move amendment 32, page 5, line 4, after “may”, insert

“, following consultation with relevant stakeholders,”

Graham Brady (Conservative, Altrincham and Sale West)

With this it will be convenient to discuss the following:

Amendment 33, page 5, line 17, at end insert—

“(7) Nothing in any regulations made under subsection (3) may require the disclosure of information or the production of documents which are subject to legal professional privilege.”

Amendment 34, in clause 8, page 5, line 45, at end insert—

“(5A) Nothing in this section authorises the disclosure of information or the production of documents which are subject to legal professional privilege.”

Stewart Hosie (Scottish National Party, Dundee East)

The amendment stands in my name and that of my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey. It would impose a duty on the Treasury to consult relevant stakeholders when making regulations as specified. Those regulations are about the type of information that may be requested by HMRC and how the request is to be made. The reason for this consultation is that it provides an additional layer of scrutiny by stakeholders.

In imposing a duty on the Treasury to consult, we will ensure that any draft statutory instrument is exposed to critical comment from stakeholders in advance, which may improve an instrument and help to avoid future issues when it is going through Parliament. I think this is important, and I am sure that the Minister will recall him and his colleagues serving on many interminable Finance Bills in the days of the last Labour Government, when many people rightly criticised the additional burdens being put on businesses, particularly by the Revenue, to provide information.

If we are going to request information from businesses, trade groups or anyone else, let us ensure that we consult the relevant stakeholders first, to make sure that we are not requesting information that is not held, that we are requesting it in a way in which it is currently collected and that we are not adding an additional layer or an additional burden for business when it is, in some cases perhaps, simply unnecessary.

Amendment 33 is about protecting legal professional privilege. We are concerned that clause 7(1) grants HMRC a very wide discretion indeed to require information. The scope of this provision should be far more clearly defined, to give greater certainty about the extent of information, the anticipated frequency with which it may be requested and the method of data collection. Legal professional privilege and confidentiality are essential in order to safeguard the rule of law and the administration of justice. They permit information that may be communicated between a lawyer and a client without fear of it becoming known to a third party without the clear permission of that client. Many UK statutes already give express protection to legal professional privilege and it is vigorously protected by the courts.

It is also worth pointing out—I am sure the Minister knows this—that the iniquity exception alleviates concerns that legal professional privilege may be used to protect communications between a lawyer and client that have been used for a criminal purpose. Such a purpose removes the protection from communications, allowing them to be targeted using existing powers but not breaching legal professional privilege.

Amendment 34 is similar to amendment 33 but deals specifically with the power to collect data by Her Majesty’s Revenue and Customs. The amendment would insert at the end of clause 8:

“Nothing in this section authorises the disclosure of information or the production of documents which are subject to legal professional privilege.”

Its effect is the same—to protect LPP. We seek to insert the amendment into this part of the Bill because we are deeply concerned that clause 8 grants are very wide discretion to the Revenue to require information. As with the argument for amendment 33, the scope of that provision should be far more clearly defined to give greater certainty as to the extent of the information they anticipate, the frequency of collection and the method of data collection from it, but the safeguard that ensures that the information that is sought to progress a criminal charge cannot be hidden behind legal professional privilege. I commend the amendment to the Committee.

Greg Hands (Conservative, Chelsea and Fulham)

It is important, as we turn to the data-sharing powers of the Bill, that the Government have a more comprehensive understanding of UK exporters so that our work to build and grow UK export capability is properly targeted at and tailored to those businesses where it will deliver the maximum benefit.

Clause 7 sets out the powers needed for the Government to collect data to establish the number and identity of UK businesses exporting goods and services, particularly smaller businesses and sole traders, who may not be readily identifiable from existing data, but who may need a helping hand from the Government to develop their export potential reaching into existing and new markets. The clause provides the ability for HMRC to collect relevant data by tick boxes on existing tax returns.

Amendment 32 would restrict the Government’s ability to implement new questions to gather data on exporters at speed, by requiring Treasury Ministers to seek further consultations with stakeholders after any necessary engagement has already concluded—it would be, if you like, an additional round of consultation, which we do not think is necessary. Such an amendment would duplicate the administrative burden on stakeholders and, more importantly, delay the availability of data and, by extension, the benefits to businesses.

Amendments 33 and 34 are closely related and concern legal professional privilege, which the hon. Member for Dundee East will know is a long-standing principle that protects the confidentiality of communications between lawyers and their lay clients, and vice versa. It enables lawyers to consult and advise their clients without clients fearing that their information will later have to be disclosed. Indeed, it is a matter of general interest that any person who wishes to consult a lawyer must be free to do so under conditions that ensure uninhibited discussion. That principle is recognised and protected under article 8 of the European convention on human rights.

I can provide an absolute assurance to the Committee that the Government have no intention, either now or in the future, of using these powers to seek or share information that is protected by legal professional privilege. For clause 7, the information that has been requested from exporters is for trade statistics purposes and will be provided voluntarily. The fact that the information is being provided voluntarily is perhaps an indication of the Government’s position in respect of minimising burdens and therefore not requiring privileged information to be disclosed.

Clause 8 allows for the sharing of data that is already held by HMRC for its administrative functions. We are talking about data to be shared that has already been collected. Such information cannot therefore be subject to legal professional privilege, as it has already been provided to HMRC.

I will take this opportunity to remind hon. Members that the clauses also provide significant assurances on the collection, handling and processing of information collected under the powers. The data-sharing powers in the Bill are permissive, so all instances of data sharing must be approved by HMRC, which acts as guardian of the data. There are criminal penalties for any unauthorised sharing of data under the existing Commissioners for Revenue and Customs Act 2005, which apply in respect to the data shared under clause 8. Nothing in the clause permits the disclosure of information that is not otherwise permitted in data protection laws, including the Data Protection Act 2018 and the Investigatory Powers Act 2016.

I hope the clarification and assurances given provide the hon. Gentleman with the reassurance he is seeking in respect of legal professional privilege. On that basis, I ask him to withdraw his amendment.

Stewart Hosie (Scottish National Party, Dundee East)

I thank the Minister for his commitment in relation to legal professional privilege, confirming that information can be shared between a client and a lawyer and, unless in the course of a criminal investigation, is completely protected. That is a good commitment to receive.

I also understand what the Minister said about information being collected to provide trade statistics on a voluntary basis. That is helpful, but I was slightly concerned at the beginning when he spoke about trying to identify the number and identity of exporters—one would have thought that the Government already knew that, and it is slightly concerning if they do not. It might be useful to understand what gaps there are in the Government’s understanding of what organisations export, what they export and to whom, but that is for another day. I beg to ask leave to withdraw the amendment.

Graham Brady (Conservative, Altrincham and Sale West)

We now come to the new clauses. New clauses 1 to 8, tabled by the official Opposition, have been debated but not moved.

Import of agricultural goods after IP completion day

Bill Esterson (Labour, Sefton Central)

I beg to move, That the clause be read a Second time.

Graham Brady (Conservative, Altrincham and Sale West)

With this it will be convenient to discuss the following:

Bill Esterson (Labour, Sefton Central)

New clauses 9 and 17 stand in my name and those of my hon. Friends. New clause 11 stands in the names of the hon. Member for Dundee East and the hon. Member for—

Drew Hendry (Scottish National Party, Inverness, Nairn, Badenoch and Strathspey)

Inverness.

Bill Esterson (Labour, Sefton Central)

Inverness, yes. There we are. I knew that inspiration would be with me.

The explanatory statement shows that new clause 11 is entirely consistent with the other new clauses. It is about the protection of

“the quality of domestic food supply by ensuring that imported foodstuffs are held to the same standards as domestic foodstuffs are held to.”

Labour has tabled a new clause 17 on animal sentience. It is important that the Trade Bill is consistent with other pieces of legislation on animal sentience. The Government have agreed to introduce, under an animal welfare and recognition of sentience Bill, a process to ensure that any future legislation or policy is assessed against animal welfare standards. This should be recognised in the Trade Bill as one of the most important areas that could undermine animal welfare standards, and those standards should be outside the ambit of the trade negotiations.

We had a similar debate on Tuesday, but I will spend a few moments on this because a few things have happened since then, such as the Secretary of State appearing at the International Trade Committee yesterday. She said no, but what did she say no to? She did not say no to taking action on food standards, and the Minister did not say no on the same thing on Tuesday. They are very good at making it clear that food safety will not be affected, but they do not talk about food production standards. We have pride in this country in our high standards not only of safety, but of production and animal welfare as well, and those are the elements that have so far been missing in what Ministers have said.

In trade talks the more powerful side wins, and if that more powerful side wants a reduction in our food production standards, it is very difficult to resist if we want a trade agreement with it, and that is the problem. We have tabled a new clause very similar to one on the Agriculture Bill, and we have done so because Ministers told Back-Bench Conservative MPs that the Trade Bill was the place for such an amendment and for this to go into legislation, so we have done what the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Banbury (Victoria Prentis), told us we should do.

Gareth Thomas (Labour/Co-operative, Harrow West)

Has my hon. Friend has seen the representations to the Committee from the British Poultry Council? That makes it very clear that the UK has multiple pieces of national legislation aimed at various aspects of animal welfare. For chicken alone, that includes on-farm catching, transport and slaughter. By comparison, the US has no national animal welfare legislation, particularly covering farm animal welfare. It is true that some states do have laws, but the three major chicken-producing states of Georgia, Alabama and Arkansas do not. Is that not at the heart of what his new clause seeks to do?

Bill Esterson (Labour, Sefton Central)

It is, and this lack of consistency in the US is one of the problems in doing a trade deal with it, because it has different standards in different states.

While my hon. Friend was speaking, the evidence from Which? came to mind. As we know, it represents consumers in the UK. It has cited consumers’ views on these matters: 79% would be uncomfortable eating beef produced with growth hormones, and 77% would be uncomfortable having milk from cows that have been given growth hormones. Giving antibiotics to healthy farm animals to promote their growth was of concern to 78%. It is not currently allowed in the UK, but it could be under a trade agreement if we give the Americans what they want. Seventy-two per cent. would be concerned about eating chicken treated with chlorine and 93% think it is important that UK food standards be maintained after we leave the EU. Nearly three quarters—72%—think that food from countries with lower standards should not be available.

Katherine Fletcher (Conservative, South Ribble)

I welcome the hon. Gentleman’s clarification that while people have concerns about food standards the things he mentioned are not allowed in the UK at the moment. I noticed he said that sotto voce so I wanted to emphasise it for the record. They are not allowed, we are not going to have them, and it is not relevant to a continuity roll-over of a free trade agreement.

Bill Esterson (Labour, Sefton Central)

As we have debated many times, the Bill, with its long title, is a lot more than that.

Greg Hands (Conservative, Chelsea and Fulham)

Thanks to the Opposition’s amendments.

Bill Esterson (Labour, Sefton Central)

The last Bill became an awful lot more after it was amended in the Lords, and I suspect that things are heading the same way. However, the hon. Member for South Ribble is right. Of course we have the highest food standards in the world. I say it already, and we have pride in those high standards. It is matter of safety, production and welfare, and all three of those have to be retained. I remind you, Sir Graham, that it was the US Secretary of State Mike Pompeo who confirmed that chlorinated chicken must be part of any post-Brexit trade agreement with the UK. That was confirmed by trade representative Lighthizer on many occasions, including when he said that on issues such as agriculture

“this administration is not going to compromise”.

Gareth Thomas (Labour/Co-operative, Harrow West)

Further to the intervention by the hon. Member for South Ribble, my hon. Friend will be more than aware that a UK-Canada agreement is very much within the scope of the Bill. The Canadians have lower animal welfare standards and lower pesticide protections than we have in the UK. That is perhaps an even stronger rebuttal of the argument that the hon. Lady advanced, that the new clause is not relevant to the Bill. It is very relevant.

Bill Esterson (Labour, Sefton Central)

Of course my hon. Friend is right. It is not a question just about the US. It is about other countries with different food production, safety and animal welfare standards, where agriculture will be part of the agreements. I am grateful to my hon. Friend for reminding us that that is an important part of what we are discussing. You would of course have told me if I had been out of order, Sir Graham, and got me to sit down, but you did not, so I was not.

I remind the Committee again that there are real concerns about the impact on human health of using antibiotics and growth hormones. That is in addition to the impact on animal welfare, and the contribution that things such as antibiotics make to the potential for a growth in problems such as zoonotic diseases, and diseases crossing species—something we should all be extremely concerned about in the middle of a pandemic that probably results from exactly that.

The hon. Member for Tiverton and Honiton (Neil Parish) said in debate on the Agriculture Bill that he had been promised that the issue would be covered in the Trade Bill. He recognised that the Agriculture Minister who made the promise was possibly not in a position to make it. He said:

“We are being led down the garden path—we really are”.—[Official Report, 13 May 2020; Vol. 676, c. 300.]

Will the Minister tell us whether his hon. Friend has been led up the garden path? That is how it looks to most people out there, as well as to us in Committee.

Stewart Hosie (Scottish National Party, Dundee East)

I want to speak to my new clause 11. Trade deals can put pressure on food standards and lead to the importation of food of a low standard. We know, for example, that the US Administration wants the UK to lower its food and animal welfare standards precisely to allow the export of products currently banned in the UK. The new clause includes a ban on the importation of food produced to standards lower than those currently applying in the UK.

The US and other countries have far lower animal welfare standards and adopt practices that are illegal in the UK for health and environmental reasons, such as the production of chlorine-washed chicken and hormone-fed beef; use various pesticides outlawed in the UK; and produce genetically modified crops, which are completely outlawed in Scotland. We believe that the quality of Scotland’s food and drink produce, and indeed that from elsewhere in the UK, as well as the standards of production, are essential to retaining our established international reputation in those products.

Drew Hendry (Scottish National Party, Inverness, Nairn, Badenoch and Strathspey)

Is the new clause not an opportunity for the UK Government to do the right thing and prove to the public that they are not trading away food standards and Scotland’s international reputation to the highest bidder? If they do not accept it, will people not justifiably conclude that that is part of their plan?

Stewart Hosie (Scottish National Party, Dundee East)

I think people are deeply concerned. No matter how many times Ministers give assurances from the Dispatch Box or elsewhere—Conservative MPs know this—because of what is said by our negotiating partners, there is deep concern among the public and, in particular, those who work in agriculture about standards that may be reduced. My hon. Friend is therefore absolutely right that by accepting various amendments or new clauses, the Government have an opportunity to cement our standards and rule out in negotiations the reduction of standards rather than simply by words in a speech.

New clause 12 in effect does two things: it affirms the UK’s rights and obligations under the agreement on the application of sanitary and phytosanitary measures in appendix 1A of the WTO agreement; and it prohibits the import of food into the UK if standards in the exporting country are lower than those in force here. I do not think there is anything contentious about that, nor do many people in the real world. I suspect the Minister will not be at all surprised that various campaign groups, including Global Justice Now and the Trade Justice Moment, support such objectives.

The list of supporters for such measures is deep and wide. Scottish Land & Estates said:

“Scotland’s producers need guarantees from the UK Government that domestic production and environmental standards are upheld as part of future international trade deals. Our extremely high environmental and food safety standards are amongst our key selling points, and this must be protected after we leave the EU to ensure we don’t find ourselves in a ‘race to the bottom’.”

As NFU Scotland has said that it is concerned that the UK Government’s approach to future trade policy creates the potential for the importation of agri-food into the UK produced to an inequivalent and uncompetitive standard of production, one would think the UK Government should listen. The new clause would ensure that the UK Government had a duty to protect the quality of domestic food supply by ensuring that imported foodstuffs are held to the same standards as domestic foodstuffs are currently. I commend it to the Committee.

Greg Hands (Conservative, Chelsea and Fulham)

I turn to new clauses 9, 11 and 17. I am aware of the strength of feeling from colleagues on both sides of the Committee on this important issue. I spoke about the commitments the Prime Minister gave in his Greenwich speech to upholding high standards, which were also in our manifesto.

Theo Clarke (Conservative, Stafford)

I have received a lot of correspondence from local residents and farmers in Stafford who are concerned about food standards, with food having to be produced to very high standards in the UK. What assurances can the Minister give me that with the Bill we will be supporting and backing British farming?

Greg Hands (Conservative, Chelsea and Fulham)

I thank my hon. Friend for that intervention. In the time she has been in the House, she has been a strong defender and advocate of her farming sector in and around Stafford. I can say that there will be no compromise on our standards on food safety, animal welfare and the environment, exactly as we laid out in the election manifesto that she and I were both elected on just six months ago, both collectively and individually.

This Bill is about ensuring continuity, particularly at this moment of unprecedented economic challenge posed by coronavirus. We need the power in clause 2 to replicate the effects of our current trading relationships and provide certainty to UK businesses. That includes the continuity agreements, including the Canada agreement, which the hon. Member for Harrow West has mentioned again today. I think there has been yet another shift in the Labour party’s position: last Thursday, we heard from the shadow Secretary of State that Labour was in favour of a trade deal with Canada, but now the hon. Member for Harrow West seems to be back to opposing that trade deal. There does seem to be some confusion, but the purpose of this Bill is not to sign new agreements or alter standards in any way. Without the Bill, we risk being unable to implement continuity agreements, resulting in disruption and uncertainty for businesses and consumers.

As the National Farmers Union confirmed to the Committee last week, the EU’s approvals regime for agricultural products is one of the most precautionary in the world. That regime will be transposed onto the UK statute book through the European Union (Withdrawal) Act 2018. I am pleased to say that the NFU has not expressed any concerns about the framework for mutual recognition in continuity agreements that this Bill provides, and I am grateful for the contribution of its expertise through our expert trade advisory group. As I have previously told the Committee, we have now signed 20 continuity agreements with 48 countries, replicating the terms that we had with them under EU trade agreements. Imports under continuity agreements must continue to comply with our existing import standards. None of these agreements has resulted in a lowering of the agricultural or other standards referenced in the agreement.

Gareth Thomas (Labour/Co-operative, Harrow West)

For the record and for the avoidance of doubt, will the Minister confirm that he can see no way in which chlorinated chicken from the US will be allowed to be sold in British stores?

Greg Hands (Conservative, Chelsea and Fulham)

That is absolutely correct. It is a point that we have made on numerous occasions, and I am happy to make it again today.

Although this Bill relates to continuity with existing trading partners, I recognise the concerns that colleagues have about future FTAs with new trading partners, as I said during Tuesday’s debate. As the Secretary of State, my DEFRA colleagues and I have told this House and the other place on many occasions, the Government will stand firm in trade negotiations. We will always do right by our farmers and aim to secure new opportunities for the industry. Returning to the point made by my hon. Friend Member for Stafford, we would like Stafford farmers to gain opportunities to sell their high-quality produce abroad by breaking down barriers, reducing or removing tariffs, and so on. That is also very important for our agriculture; in fact, the scoping assessment for the US trade deal showed that UK agriculture would be a net beneficiary of any such deal.

All imports under all trade agreements, whether continuity or future FTAs, will have to comply with our import requirements. In the case of food safety, the Food Standards Agency and Food Standards Scotland will continue 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 those standards are a matter for the UK and will be made separately from any trade agreements.

Matt Western (Labour, Warwick and Leamington)

The Minister has said that UK farmers would be net beneficiaries of any trade deal with the US on exports, but I do not see how that can tally. If the United States’ No. 1 priority in any trade deal is agricultural products, is he saying that we will be exporting more agricultural products to the US than the US will be exporting to the UK?

Greg Hands (Conservative, Chelsea and Fulham)

I am surprised by the hon. Gentleman’s apparent enthusiasm for Trumpian mercantilism, thinking that because UK agriculture might gain, that would somehow mean US agriculture would lose. Sir Graham, you and I both know that free trade does not work like that: there could be benefits for both sides in the trade agreement. For example, the US simply does not allow in British lamb, and currently puts very high tariffs—tariffs of between 20% and 23%—on British cheeses, including Cheddar, Stilton, and other high-quality British cheeses that we would like to sell to the United States. Of course there is an opportunity for British agriculture, and the scoping assessment that we published on 2 March shows that the UK agriculture sector has the potential to be a net beneficiary.

Matt Western (Labour, Warwick and Leamington)

The Minister has very clearly said that UK farming will be a net beneficiary of a trade deal with the US. Is that correct?

Greg Hands (Conservative, Chelsea and Fulham)

I refer the hon. Gentleman to the scoping assessment that we published on 2 March, where that is laid out in considerable detail. Of course, it is a scoping assessment; nobody knows yet exactly what will be in the deal, on which a lot will depend.

We have talked at some length in these debates about the scoping assessment, which lays out the possibilities. The numbers run in the scoping assessment suggested that UK agriculture would be a net beneficiary of the agreement. Our existing import requirements already include a ban on using artificial growth hormones in domestic and imported products, and a ban on using anything other than potable water to decontaminate poultry carcases.

One Opposition Member mentioned Waitrose. I know we are not allowed to use props in this Parliament, but I bow to nobody in my love of Waitrose—I have my Waitrose card to prove it. My constituents benefit from seven branches of that supermarket. When Waitrose came to see me five or six years ago and told me about its pilot of Little Waitrose, it told me all about these fantastic things and asked for my view. I said, “That sounds fantastic. What have other MPs said?” They said, “You are the only MP we are coming to see about it, because half of the pilots are in your constituency.” That is how popular Waitrose is in my local area, so I bow to nobody in my love for Waitrose. Waitrose could well proclaim that it would not be selling these products, and it would be right, because these products will remain illegal in the UK after 1 January 2021. It is quite safe in making that assurance, which I agree with.

Any changes to existing legislation will require new legislation to be brought before Parliament. I reiterate that any decisions around standards will be made separately from negotiations. We appreciate that there will be a range of issues that stakeholders across different sectors, not least agriculture, will be keen to discuss. Let me reassure British farmers that we are on their side in negotiations with all trade partners. We will not compromise on our high standards of food safety and animal welfare in any trade negotiation. To that end, we have actively engaged the agriculture sector and encouraged it to help UK trade policy, including through representation on the Government’s Strategic Trade Advisory Group and dedicated Agri Food Expert Trade Advisory Group.

I will now address each amendment in turn. New clause 9 would mean that all imported agricultural goods had to meet the same production standards as goods produced in the UK today and to be aligned dynamically. I have already talked about the UK’s stringent import protections, which are either in place through existing domestic legislation or brought on to the statute book through the withdrawal Act.

As I have mentioned, during the evidence sessions we had on the legislation, the NFU and others described these as some of the most precautionary standards in the world. As Committee members will know, the UK’s food standards for domestic production and imports are overseen by the Food Standards Agency and Food Standards Scotland. Those agencies provide independent advice to the UK and Scottish Governments, and will continue to do so, to ensure that all food imports comply with the UK’s high safety standards. Through the works of these independent organisations, consumers are protected from unsafe food, which does not meet our high domestic standards.

Members, however, should consider the unintended consequences of this new clause. It would force us to effectively ban safe food imports that meet our current import standards but do not follow the same production methods as we have in the UK. That is crucial to understand. It would significantly disrupt UK food supply chain resilience, commercial relationships and bilateral relations with partner countries.

Stewart Hosie (Scottish National Party, Dundee East)

The wording that the Minister uses is fascinating. We were talking about production standards. He spoke about production methods. Those are not the same thing.

Greg Hands (Conservative, Chelsea and Fulham)

I am happy to have a debate with the hon. Gentleman about the difference between standards and methods, but I am not sure that the difference is that big.

The dictation of our domestic standards to our trading partners might well appear a laudable goal, but the new clause would require them to keep aligned with just seven days’ notice. Subsection (3) of the new clause states that a register

“must be updated within seven days of any amendment to any standard listed in the register.”

Our trading partners’ standards would therefore have to remain dynamically aligned to our domestic production standards with just seven days’ notice. That could have serious consequences for our existing trade flows, let alone anything negotiated in the future.

This is true for the developing world. The beans that we can buy at Waitrose in Fulham—I imagine that they are similar to the ones at Waitrose in Putney, for example—come from Kenya and Egypt. The last time I bought beans was at the weekend. Bananas from the Caribbean might not have production standards that are the same as those in the UK, but they can still meet our import standards.

Those markets would not be able to keep up with our changes. Given just five days’ notice, they would have to dynamically align with whatever the UK decided and, within seven days, make the changes to their domestic production standards. That strikes me as being wholly impractical. The impact of the new clauses could be severe on livelihoods in the developing world. I invite Opposition Members to go and see some of the Kenyan or Egyptian beans being produced and tell some of those workers that, as a consequence of new clause 9, they might well find themselves having to align with UK production standards in the future.

The new clauses might have been drafted with the US in mind, but this is UK law and it would apply to all our trading partners. These measures would likely render inoperable the very continuity agreements we have been discussing and, indeed, potentially prevent a deal with the EU itself. There would be an irony in the UK, through our domestic law, seeking the EU to dynamically align with our standards.

As I said on Tuesday, the UK banned veal crates some 16 years before the EU, and we can take great pride in that; it is a great achievement. The idea that the EU would sign a trade deal with us whereby it would have to commit to dynamic alignment with our standards with just seven days’ notice is highly questionable, to say the least. Members who want continuity with those 40 deals should not vote for these new clauses, nor should those who want a trade deal with the European Union.

New clause 9 would have the unwanted effect of discouraging partners with whom we are yet to sign a continuity agreement from negotiating with us. This Government were elected on a manifesto promise that, in our trade negotiations, we will not compromise on our high environmental protection, animal welfare and food standards, and we will not. Parliament will have significant oversight of any regulations made under this power, and any statutory instruments brought forward will be subject to the affirmative procedure. Given our robust commitment to British food and farming, I ask the hon. Member for Sefton Central to withdraw the new clause.

Like new clause 9, new clause 11 stipulates that all food imported to the UK should be held to the same standards as that which is produced in the UK. The proposal stands in the name of the hon. Member for Dundee East, although I suspect he has the same intentions as the hon. Member for Sefton Central in tabling it. I have already provided assurances that EU import standards, praised by the NFU and others, will be replicated in domestic law at the end of the transition period. Our import requirements include a ban on using artificial growth hormones in domestic and imported products, and any changes to existing legislation would require new legislation to be passed by Parliament.

Given that we have high safety standards in place, and that the wider unintended consequence of the new clause would be to threaten both the resilience of our food supply chains and our opportunity to ensure that we secure continuity for British businesses and customers through our ongoing continuity negotiations, I hope that the hon. Member for Dundee East will not press the new clause.

New clause 17 stipulates that any animal welfare or sentience regulations arising from trade agreements must be aligned with existing commitments in UK and retained EU law. I can assure Members that our world-leading animal welfare standards are at the heart of our continuity negotiations. None of the agreements already signed with 48 countries is inconsistent with existing standards, as the parliamentary reports published alongside those agreements demonstrate. In fact, the UK has some of the most comprehensive animal welfare regulation in the world. We have introduced one of the strictest ivory bans in the world and we have a manifesto commitment to end excessively long journeys for slaughter and fattening. World Animal Protection rated the UK as having the joint-highest animal welfare standards in the world, tied with Austria, Switzerland, the Netherlands, Denmark and Sweden.

I share Members’ desire to ensure safeguards both for British consumers and for farmers. However, the protections we are already putting in place, coupled with the unintended consequences of the proposals, mean that these measures would be of no benefit. Our manifesto commitment is clear: the Government will stand firm in trade negotiations to support farmers, protect consumers and safeguard standards. I hope that that explanation, alongside the 20 continuity agreements that Parliament ratified, provides reassurance to the Committee that the Government’s commitment to maintaining standards is being delivered. I therefore ask hon. Members not to press their proposals to the vote.

Bill Esterson (Labour, Sefton Central)

That was really telling. It has taken until today for the Government to come up with a form of words to justify not supporting higher food production standards. The intervention, I think by the hon. Member for Dundee East, really did nail it. There is a world of difference between methods and standards, of course there is. How something is produced to a certain standard is one thing; the method used is entirely another. This is the point we have been making again and again in the proceedings of both this Bill and the Agriculture Bill. The Government have been pushing a defence of food safety, but not how it is produced, how animals are looked after or, indeed, how plants are protected. It is really telling that that is the defence being used and that it has taken them a while to get there. There can be and there are different methods of production all over the world, of course there are, but they can be to the same high standards. I am afraid that it did not work, and it will not work. It will not wash, unlike the chlorine the previous Secretary of State at one point said was perfectly safe and acceptable, before changing his mind when he realised it was not acceptable or palatable.

So, there are those differences and we should have concerns about hormones in animals. We should have concerns about the impact of antibiotics. We should have concerns about the impact on fruit and vegetables as well. As my hon. Friends have pointed out it is not just the United States, but countries that are directly a part of the continuity aspect of the Bill, that the Minister is so fond of reminding us about. It is Japan as well as Canada, by the way.

Charlotte Nichols (Labour, Warrington North)

I recently took part in an update call with the Secretary of State about the progress of the UK-US trade deal. She made a very interesting point in answer to a question from the hon. Member for Wyre Forest (Mark Garnier) regarding food standards. He asked about outcome versus process and the technicality of that when it comes to animal welfare. The Secretary of State said that we had spelled out our red lines to the US in negotiations, but that the issue the Government had with the amendment to the Agriculture Bill on 13 May, which would have guaranteed high standards for food and drink entering the country post-Brexit, was to do with Canada not meeting our domestic standards. Could the Minister perhaps shed some light on that?

Bill Esterson (Labour, Sefton Central)

That is a matter for the Minister rather than me. Perhaps it is one he will take away and respond to in time, but my hon. Friend makes a very important point. It reinforces the argument we are putting and is part of the reason that we shall press the new clause to a Division.

The reality is that the Minister is relying on safety standards, saying, “A chemical wash at the end of the process is good enough and it does not matter how we get there if it produces cheaper food. If production is cheaper because there is less animal welfare, let’s not worry too much about it.” There are a host of problems with that relating to health, morality in the way that animals are treated, and the animal sentience amendment. Indeed, there are also grave concerns about the impact on human health over the longer term in areas such as the use of antibiotics—not just its impact on zoonotic diseases but the effect on human health of antibiotics and other chemicals getting into water courses.

So no, we do not buy it; we do not accept it. I think we will stick with what the hon. Member for Tiverton and Honiton said. We do think we are being led up the garden path. Getting on for 80% or 90% of the public agree with us and, frankly, so does the NFU. It wants to keep high production standards, whatever the Minister might have said in his response to the debate.

International trade agreements: public health services

Stewart Hosie (Scottish National Party, Dundee East)

I beg to move, That the clause be read a Second time.

Graham Brady (Conservative, Altrincham and Sale West)

With this it will be convenient to discuss new clause 13—International trade agreements: consent for provision of healthcare services—

“(1) A Minister of the Crown may not, under section 20(1) of the Constitutional Reform and Governance Act 2010, lay before Parliament a copy of an international trade agreement which makes provision for the supply or provision of healthcare services (including medicines and medical devices) unless each of the devolved authorities has given their consent to that agreement.

(2) ‘Devolved authority’ shall have the meaning given in section 4 of this Act.”

This new clause would ensure that HMG is not able to lay before Parliament a trade agreement which could have an impact on provision of healthcare services without the consent of the devolved administrations.

Stewart Hosie (Scottish National Party, Dundee East)

New clause 12 would ensure that the UK Government had a duty to restrict market access to healthcare services, including medicines and medical devices. We tabled the new clause precisely because trade deals have the potential to negatively impact health services. Although the UK Government have repeatedly pledged that the NHS is not on the table in trade negotiations, leaked documents detailing conversations between UK and US negotiators reveal that health services have been discussed, including the US “probing” on the UK’s health insurance system—whatever that means—and that the US has made clear its desire for the UK to change its drugs pricing mechanism.

Drew Hendry (Scottish National Party, Inverness, Nairn, Badenoch and Strathspey)

Is this not a similar situation to that in the previous debate on food standards? The Government could easily make a commitment to rule out these things—to do the right thing and show the public that the NHS and medicines are not at risk. They could reassure people by putting that in the Bill and ensuring it does not happen. Otherwise, they are just saying to the public, “This may well be part of the plan.”

Stewart Hosie (Scottish National Party, Dundee East)

My hon. Friend is absolutely right. As in the previous debate, the Minister has said that there will be no compromise on standards. I do not doubt for one second his sincerity, but let us just put it in the Bill so that everyone is absolutely satisfied. In that sense, my hon. Friend is absolutely right—let us rule it out in legislation.

Andrew Griffith (Conservative, Arundel and South Downs)

I would love the hon. Gentleman to expand on his theory of harm in respect of health services. If ever there was an example of the global effect of the law of comparative advantage, it is the advances in modern healthcare. There is a remedy available to him should he wish to remove himself from the benefits of diagnostics from Düsseldorf, biogenomics from Boston or pharmaceutical projects from Dublin. There is a mechanism known as a living will, whereby he can instruct his heirs and his family to ensure that he is at no point treated by any of those marvels of modern healthcare and that he can go back to experiencing the benefits of herbal potions and remedies and all those other forms of modern medicine that he would seem to prefer by cutting himself off from the benefits of free trade with the world.

Stewart Hosie (Scottish National Party, Dundee East)

I have benefited from the national health service; indeed, it has probably saved my life on a number of occasions.

I have no doubt that some of the drugs purchased are still under patent by private companies. Some of the diagnostic testing machinery was made in Germany. Nobody, but nobody, is talking about restricting any of our health services in terms of purchasing. We are talking about marketisation, which has failed when it comes to the health service.

The new clause has a specific carve-out for the NHS and all health-relevant services regulation, making it illegal for the Government to conclude a trade agreement that altered the way NHS services are provided, liberalised further or opened up to foreign investment by dint of a trade agreement—not by a policy change, not by part of the NHS somewhere on these islands saying it would be a good thing to do, but by dint of a trade agreement being forced on us from somewhere else.

On negative listing, these clauses—we know this from other examples—require all industries to be liberalised in trade agreements unless there are specific carve-outs. The reason this is an issue is that it is not always easy to define what services count as health services and what are more general. For example, digital services may seem irrelevant to health, but NHS data management and GP appointments are increasingly digital. Negative lists therefore make it harder for Governments to regulate and provide health services for the common good. No-standstill clauses are ratchet clauses, because these provisions mean that after the trade deal has been signed parties are not allowed to reduce the level of liberalisation beyond what it was at the point of signature. That can make it difficult to reverse NHS privatisation.

Let me give an example of where had a standstill or ratchet clause been in effect, it would have caused real harm. In Scotland, cleaning in hospitals was historically carried out by private contractors, and the rate of hospital-acquired infections rose dramatically. The SNP Government took the decision to return it to NHS cleaners, and the rate of those infections fell dramatically. Imagine if an investor-state dispute settlement had been in place, if a ratchet clause had been in place—we would have been unable to do that, and if people had died from hospital-acquired infections because the Government were not allowed to take the public health measure of returning cleaning to the public sector, it would have been an absolute scandal.

I mentioned ISDS. There should be no ISDS clauses in trade agreements which only allow private investors to challenge Government policy when, for example, it affects their profits. Failure to abide by those clauses can result in legal challenge from trade partners or, if there is a separate ISDS clause, a challenge from private investors. I have used a number of examples on a number of occasions, and I will use another today very briefly. It is from April 1997. The Canadian Parliament banned the import and transportation of the petrol additive MMT because of concerns that it posed a significant public health risk. The Ethyl Corporation, the additives manufacturer, sued the Canadian Government under chapter 11 of the North American free trade agreement, an ISDS-type arrangement, for $251 million to cover losses of what it called the expropriation of both its production plant and its good reputation. That was upheld by the Canadian dispute settlement panel, and the Canadian Government repealed the ban and paid that corporation $15 million in compensation. That was over a petrol additive that was deemed to have a negative impact on public health. We believe it is quite wrong for large corporations to use these ISDS-type arrangements to sue Governments simply for taking steps to protect the wellbeing of citizens or for simply enacting public health measures which they believe to be right and for which they may well have an electoral mandate.

The new clause also instructs that there should be no changes to drugs pricing mechanisms. We know that the US, for example, has stated that it wishes to challenge the drug pricing model which keeps prices low for ordinary people in the UK. This could also happen through intellectual property and non-patent exclusivities. We need to be very alive to that. It would be bad news for patients, taxpayers, health boards and trusts around the country. In our judgment, trade agreements should never be used to facilitate that.

Our new clause 13 is an adjunct; we simply sought to add a different degree of protection for the health services in the nations, and to ensure that the Government would not be able to lay before Parliament a trade agreement that would have an impact on the provision of healthcare services without the consent of the devolved Administrations. That is secondary to the substantial points we are trying to make and the protections that we wish to put in place with new clause 12.

Gareth Thomas (Labour/Co-operative, Harrow West)

Given the extra protections that new clause 12 would lock into law to keep the NHS safe from future trade agreements’ effectively pushing higher pharmaceutical prices or further marketisation of the NHS, we will happily support the new clause tabled by the hon. Member for Dundee East. Indeed, his new clause supplements the protections that amendment 12, had it been agreed to earlier in our proceedings, would have put in place to protect our public services more generally.

We, too, are aware of the leaked documents that the hon. Gentleman referred to, revealing that discussions have already taken place in the UK-US trade talks about possible measures that the American pharmaceutical industry might want, clearly supported by Donald Trump’s chief negotiator, that would effectively push prices up. Given that we have substantially lower pharmaceutical drug costs than the US, the fact that the Americans are continuing to push such measures is profoundly worrying.

Ministers have said that the NHS is not on the table in the UK-US talks and, like the hon. Gentleman, I take that at face value, but it is worth saying that until the text of a trade agreement is published, we will have no way of knowing for sure what is in it. The precedent of the EU-Canada deal does not give reassurance in that respect, as it used the negative list approach to services liberalisation, to which he referred. The Minister will remember the considerable concern that Germany had chosen to add in carve-outs for the whole of its national health service, whereas the UK had not taken such a comprehensive approach.

Greg Hands (Conservative, Chelsea and Fulham)

I start by thanking Opposition Members for tabling new clauses 12 and 13, which provide me another opportunity to stress the Government’s position on the NHS and our trade agenda. The Government have been clear and definitive: the NHS is not, and never will be, for sale to the private sector, whether overseas or domestic. No trade agreement has ever affected our ability to keep public services public, nor do they require us to open up the NHS to private providers.

We have always protected our right to choose how we would deliver public services in trade agreements, and we will continue to do so. The UK’s public services, including the NHS, are protected by specific exclusions, exceptions and reservations in the trade agreements to which the UK is a party. The UK will continue to ensure that the same rigorous protections are included in future trade agreements.

As stated in our published negotiating objectives with the US, to which I referred the hon. Member for Warwick and Leamington, the NHS will not be on the table. The price the NHS pays for drugs will not be on the table. The services the NHS provides will not be on the table.

Those commitments are clear and absolute, but new clause 12 is unnecessary, however laudable the intention behind it is. It overlooks the fact that there are already rigorous checks and balances on the Government’s power to negotiate and ratify new agreements. In particular, and as we discussed on Tuesday, the UK already has scrutiny mechanisms via the Constitutional Reform and Governance Act 2010 procedure that will ensure Parliament can see exactly what we have negotiated, and if it does not agree it can prevent us from ratifying the deal.

Furthermore, and most importantly, no trade agreement can of itself make changes to our domestic law. Any legislative changes required as a result of trade agreements, including—if not in particular—in relation to the NHS, would be subject to the separate scrutiny and approval of Parliament in the usual ways.

Turning to new clause 13, as the hon. Member for Dundee East will be aware, the negotiation of international trade agreements is a reserved matter under the devolution settlements. It is for the UK Government to negotiate the agreements and for the UK Parliament to scrutinise them, in accordance with the Constitutional Reform and Governance Act 2010, prior to ratification. Therefore, it would be constitutionally inappropriate to give the devolved Administrations a veto over such agreements before they were laid in Parliament.

However, that is not the issue here. What is more important is the fact that our commitment that the NHS will not be on the table applies to the NHS in all parts of the UK, including in the devolved nations. So, I hope that I have provided the hon. Members with some reassurance that the new clauses are therefore unnecessary.

Stewart Hosie (Scottish National Party, Dundee East)

When the Minister described the end of the Constitutional Reform and Governance Act 2010 process, it is a take-it or leave-it option, with no ability for Members to make amendments whatever. I do not think that is satisfactory, to be brutally honest.

As I have said before, I do not question the sincerity of this Minister. When he says that the NHS is not for sale, that no trade agreement has ever affected how the UK deals with its public sector, that the NHS is protected by carve-outs, and that drug pricing and other things are not on the table, I think he is being sincere. But if we put in place a mechanism whereby those protections are not in the Bill, it does not take a huge leap of imagination to imagine some Trump-supporting figure coming up through the ranks of the Tory party and sitting in a chair just like the Minister’s, and making rather different decisions.

So, on that basis, I am afraid that I have to press for a Division on new clause 12.

New clause 15

Gareth Thomas (Labour/Co-operative, Harrow West)

I beg to move, That the Clause be read a Second time.

I rise briefly to suggest to the Committee that once a free trade agreement has been signed in the future, it makes sense to have a point at which to assess the effectiveness of that agreement, perhaps to see how it has worked in practice in terms of British exporters being able to take advantage of it.

Labour Members remember only too well the Government’s decision to axe by some 60% the support to British exporters. So it will be interesting, five years down the line from the publication and signing of these continuity agreements, to see whether such a severe cut has actually meant that many British businesses have been unable to take advantage of the opportunities in a free trade agreement.

The new clause would also give us the opportunity, five years hence, to see whether the genuine concerns of many—both in this House and out—about investor-state dispute mechanisms, if they have been incorporated into agreements, have taken effect. We would be able to see the damage done to environmental protections, the health service, labour rights or human rights—any way in which they might have been affected.

Given the concerns expressed clearly to us about how many of the continuity trade agreements might actually work in practice, it is surely sensible to have the opportunity to review whether those concerns have been borne out in practice. One can think of the Norway continuity agreement, which still has no services provisions for British companies wanting to operate in service markets in Norway. That is still in some doubt, as only the goods part has been resolved. The situation is similar with Switzerland. We raised a series of concerns about the South Korea agreement and the extent to which some agricultural products, such as cheddar cheese and honey, have been affected by poor drafting of that agreement.

Given how we have thrown away some of the great advantages that Britain drew in terms of soft power from the Department for International Development being a stand-alone Department, again it will be interesting to see whether the Ghana and Kenya agreements—I thank the Minister for his letter—have been able to serve their purpose and support not only agricultural sales to the UK, but regional integration in west and east Africa.

For all those reasons, and given the huge concerns about some of the potential measures in free trade agreements, it makes sense surely—it certainly makes sense to us—to have a fixed point, five years down the line after a trade agreement has been signed, to have the opportunity for the Government to publish a full review looking at the impact.

Greg Hands (Conservative, Chelsea and Fulham)

New clause 15 proposes a review, as we have heard, of free trade agreements every five years after entry into force. I have already drawn the Committee’s attention to the parliamentary reports that we have voluntarily published alongside every signed continuity agreement, outlining any significant differences between the signed agreement and the underlying EU agreement. I confirm that we will continue to do so for the remaining continuity agreements.

We have a meaningful and constant dialogue with several Committees in Parliament. Those may provide a more appropriate forum for reviews of our trade agreements and an assessment of the UK’s wider trade environment and relationships. We are keen for Parliament to make its voice heard during the negotiation of our continuity programme in a way that is proportionate and productive. I also draw the Committee’s attention to the fact that six signed continuity agreements have been subject to debate in Parliament without a single one carrying a motion of regret.

As I have said many times before, our objectives for the trade continuity programme are to replicate the effects of existing EU trade agreements, which have all been subject to comprehensive scrutiny at EU level. Given that scrutiny, the parliamentary reports we have committed to publishing and the other constraints contained within the Bill, we do not believe that an additional report in the future would be an efficient use of parliamentary time. Additionally, I argue that looking at each agreement in isolation from the wider trading situation of the UK at an arbitrary point in time risks rendering any such report at best incomplete and at worst meaningless.

As a Department, we have an ongoing obligation to provide meaningful and timely information to the public, businesses and other key stakeholders on our assessment of the UK’s trading relationships. Statutory obligations anchored in specific agreements in the manner proposed by the new clause could in fact act as a constraint to the Department providing that sort of information in a timely and impactful way. As such, I ask the hon. Member to withdraw his new clause.

Gareth Thomas (Labour/Co-operative, Harrow West)

I have listened to what the Minister has said. He will understand that we remain concerned that this provision was put in the Bill by the Government on Report in the Commons, and it has been taken out. The Minister who gave the assurance in writing that such reports will continue is no longer in the Department. I think we would still prefer to see the commitment in the Bill, and as a result, I intend to press the new clause to a vote.

UK participation in EU and EEA organisations

Gareth Thomas (Labour/Co-operative, Harrow West)

I beg to move, That the clause be read a Second time.

We have left the European Union and await the oven-ready Brexit deal that the Prime Minister promised the British people in December—it does feel as though it is in the slow cooker as opposed to the microwave. Nevertheless, our proximity to other European nations inevitably means that our trade, as well as much else, will continue to require significant co-operation with our allies in European capitals and, indeed, in Brussels. Surely, we should not put ideology before common sense but should consider sensibly which EU agencies that impact on trade it is worth maintaining a particularly close relationship with and, indeed, where continued membership is worth seeking. We suggest in the new clause that we should seek continued membership of the European Medicines Agency, the European Chemicals Agency, the European Union Aviation Safety Agency and the European Maritime Safety Agency.

If we are not members of the European system run by the European Chemicals Agency, there is a risk of divergence in chemicals regulation. That may just sound like a concern about red tape. However, if we are not members of the European Chemicals Agency, there is a risk of, for example, the EU27 saying that chemical x is not safe to use but our own new national system telling us not to worry about it and that it is safe. If UK and EU decisions on chemicals start to diverge, that will put pressure on UK chemicals companies to decide whether to stay in the UK or to leave and base themselves in the bigger market of the European Union. I am sure that all Members of the House would want to avoid that.

It is difficult to see how access to the REACH database can be achieved without membership of the European Chemicals Agency. Ian Cranshaw, who spoke to us on behalf of the chemicals trade body when we heard witness statements, made clear how difficult it appeared to be to continue to have access to the REACH database without, effectively, membership of the European Chemicals Agency. He went on to set out how membership of the REACH database is the gold standard for chemicals regulation and how important it was for British firms to continue to have access to it.

The European Medicines Agency is critical to ensuring that medicines for humans and animals are safe. It helps to foster innovation and the development of new medicines across the European Union. By ensuring cross-European collaboration, it has helped to bring down the cost of medicines through its policing role in respect of the single market for medicines. Every month, the UK-EU trade in pharmaceutical products is huge; upwards of 70 million packages move between the UK and the EU every month. The UK pharmaceutical industry is very heavily regulated, and it is heavily regulated because it is an integral part of Europe’s medicines regime. It surely, therefore, makes sense to remain a member of that agency.

The European Union Aviation Safety Agency has responsibility for civil aviation safety across Europe, but it also has a series of critical trade-related roles, including being responsible for much of the airworthiness and environmental certification of all aeronautical products, parts and appliances that are designed, manufactured and maintained in Europe. It negotiates international harmonisation agreements with the rest of the world and concludes technical agreements with other countries, such as with the US Federal Aviation Administration. Continued membership of the European Union Aviation Safety Agency would give the UK access to a global industry leader, in terms of standard setting for trade in aviation. Surely, we should continue to belong to it.

The European Maritime Safety Agency was set up after the Erika disaster, when the oil tanker Erika broke in two in the bay of Biscay in December 1999 and thousands of tonnes of oil were released into the sea. It triggered a package of EU laws to improve safety in the shipping industry, including the establishment of an agency to oversee the implementation of safety laws, which have helped to ensure that the English channel and the rest of our seas are properly protected from oil spills and other pollution from the big ships that carry traded goods. Surely, it makes sense to remain a member of that agency.

Greg Hands (Conservative, Chelsea and Fulham)

On new clause 21, regarding the parameters of the UK’s future relationship with the EU, the Government have made it clear that our priority is to ensure that we restore our economic and political independence on 1 January 2021. The approach to the future relationship with the EU has already been extensively discussed not just in the previous Parliament but in this one, particularly during the debates on the European Union (Withdrawal Agreement) Act 2020. During those debates and subsequently, the Government have been clear that we want a relationship with the EU that is based on friendly co-operation between sovereign equals and centred on free trade. That is what Taskforce Europe, working with the Prime Minister, is pursuing.

The UK published its approach to the negotiation of a future relationship with the EU on 27 February 2020. Our approach builds on the EU’s offer of a Canada-style deal. It reflects the type of free trade agreement that should be achievable between sovereign states that respect each other’s independence, as the EU has done in the past. We will discuss with the EU how to manage our friendly relations, but any solution has to respect our legal and political autonomy. Members will be aware that there are very limited options for third-country membership of EU bodies. We have been clear that we will be operating on the basis of existing precedents and no acceptance of the European Court of Justice.

However, I acknowledge that members of the Committee are looking for reassurance about the Government’s approach to negotiations with the EU in relation to the four bodies listed in the new clause. On the European Medicines Agency, we have stated that the UK-EU FTA should include commitments to co-operate on pharma co-vigilance, and to develop a comprehensive confidentiality agreement between regulators, in line with agreements between the European Medicines Agency and Swiss, US and Canadian authorities. The UK’s published response in respect of the European Chemicals Agency states that the UK-EU FTA should include a commitment to develop a memorandum of understanding to enhance co-operation further, similar to the MOUs that the European Chemicals Agency has agreed with Australia and Canada.

On the European Union Aviation Safety Agency, the UK’s published position is that we have proposed a bilateral aviation safety agreement that will facilitate the recognition of aviation safety standards between the UN and the EU, minimising the regulatory burden for industry. On the European Maritime Safety Agency, the UK is discussing with the EU how best to manage our friendly relations, but any solution has to respect our red line of no commitments to follow EU law, and no acceptance of the ECJ.

It is important to be clear that, in our negotiations with the EU, we are not asking for a special, bespoke or unique deal; we are looking for a deal like those that the EU has previously struck with other friendly countries such as Canada. I hope the confirmation of the Government’s approach to the four agencies mentioned in the new clause has reassured the Committee, and I ask the hon. Member for Harrow West to withdraw the new clause.

Gareth Thomas (Labour/Co-operative, Harrow West)

Although it has been useful to hear the reassurance that the Minister has attempted to provide, we still think that seeking membership of those four specific agencies makes sense. I intend to press the new clause to a vote.

Greg Hands (Conservative, Chelsea and Fulham)

On a point of order, Sir Graham, I thank you, Ms Cummins, and everybody involved in the Bill for all your hard work in Committee. Once again, I am both pleased and privileged to have been able to engage in a thorough debate on the contents of the Bill, which bears an uncanny resemblance to the Trade Bill in the last Parliament. I have been in and out of the Department for International Trade, but on returning to the Department, I found the Bill looking more or less the same as when I left the Department in June 2018.

I thank the Committee for engaging with the issues in a positive and constructive way; we have had some real insight, not only into trade policy overall, but into how opposition parties deal with trade policy. I will not dwell further on that, because I have made a few points already, but it is good to see that the approach patented by the hon. Member for Brent North (Barry Gardiner)—with the Opposition’s trade policy a moving feast—lives on today in his absence.

We have had a great debate, carried out in a good spirit, during our two-week immersion in trade policy. I think that, no matter which party one belongs to, a full two-week immersion in trade policy is a great thing as we move forward towards our independent trade policy, effective from 1 January 2021. We can all only benefit from such an immersion.

Bill Esterson (Labour, Sefton Central)

Further to that point of order, Sir Graham. I add my thanks to you and your co-Chair, Ms Cummins, for your diligent and considerable efforts to ensure order during our deliberations. I thank the witnesses who gave evidence, the Clerk, all the officials and Hansard. As the Minister said, it is a challenging time for all who are involved in making sure that Committees operate effectively.

I thank the Whips. The Government Whip was entirely fair in her criticisms of the Opposition, as she raised the same number of points of order about my hon. Friend the Member for Harrow West and me—fair play to her for her fairness. The Minister described the Bill as a continuity Bill a number of times, and he has been the continuity Minister on the continuity Bill. He is nothing if not consistent, because he gave exactly the same answers as he gave last time around. I hope that this time we will make some progress on the Bill and see the end result. I dare say that we will return to some of these arguments on Report, and that the Lords will have their say.

Graham Brady (Conservative, Altrincham and Sale West)

I thank the hon. Gentlemen for their points of order. I add my thanks to Hansard and in particular to the Clerk, given that we go back to the Education and Employment Committee in the 1997 Parliament. I have been well served and well advised by this Clerk for many years.

Written evidence reported to the House