Trade (Australia and New Zealand) Bill
Public Bill Committee, 12 October 2022.
Derek Twigg (Labour, Halton)
We are now sitting in public and proceedings are being broadcast. I have a few preliminary announcements. Hansard colleagues would be very grateful if Members emailed their speaking notes to hansardnotes@parliament.uk. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. I am happy for Members to take off their jackets, if they so wish.
We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of the written evidence for publication and a motion to allow us to deliberate in private about our questions before oral evidence sessions, although we might not need to do that. In view of the time available, I hope that we may settle those matters formally, without debate. I call the Minister to move the programme motion that was agreed yesterday by the Programming Sub-Committee for the Bill.
Derek Twigg (Labour, Halton)
The Committee will therefore proceed to line-by-line consideration of the Bill next Tuesday at 9.25 am.
Derek Twigg (Labour, Halton)
Copies of written evidence that the Committee receives will be made available in the Committee Room and will be circulated to Members by email.
We could go into private now, but the indications are that no one wants to. If that is acceptable, we can go straight on to questions and the formal evidence session. We are still sitting in public and the proceedings are being broadcast. Before we hear from the witnesses, Members should make any declaration of interest in connection with the Bill.
Examination of Witnesses
Derek Twigg (Labour, Halton)
The first panel of witnesses is Lucy Monks, head of international affairs at the Federation of Small Businesses, who will appear in person; and Andy Burwell, director at the Confederation of British Industry, and William Bain, head of trade policy for the British Chambers of Commerce, who will both appear by Zoom. I understand that there are some problems with Zoom at the moment, but we will bring the two other witnesses in later. Lucy Monks is present, so we will deal with questions to her. Lucy, will you introduce yourself, before I ask Members if they have any questions?
Derek Twigg (Labour, Halton)
Thank you, Lucy. I remind Members that questions should be limited to matters within the scope of the Bill and that we must stick to the timings in the programme motion that the Committee has agreed. For this session, we have until 10.20 am. I will be strict about the time. I first call Gareth Thomas.
Gareth Thomas (Labour/Co-operative, Harrow West)
Ms Monks, thank you very much for being willing to come in this morning to give evidence to the Committee. Will you just say how you think the deals could have been improvedQ ?
Gareth Thomas (Labour/Co-operative, Harrow West)
The entire deals—or are they so wonderful that they could not be improved in any way?
Derek Twigg (Labour, Halton)
I remind Members that questions must be in scope—they have to be about the Bill, not the general issue of trade.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Thank you for that opening answer, Ms Monks. On procurement, the Government have sold us the idea that there will £10 billion in new procurement opportunities from the Governments of Australia and just under £800 million or so in new opportunities from Government contracting in New Zealand. Do you think that there will be a huge rush from the British small business sector to take advantage of those opportunities?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q I was going to ask whether anyone from the Department for International Trade, straight after the Australian or New Zealand FTA was signed, said, “Okay, we need to sit down with you, Federation of Small Businesses, to work out together how we maximise the opportunities for British businesses.” Have you had those conversations?
Gareth Thomas (Labour/Co-operative, Harrow West)
Or has a unit in the Department for International Trade been set up to support you?
Drew Hendry (Scottish National Party, Inverness, Nairn, Badenoch and Strathspey)
Thank you, Lucy, for coming here in person and enabling us to keep going. What is the view of the FSB of the fact that implementing legislation is being introduced for the New Zealand free trade agreement before Parliament has had an opportunity to debate the agreement under the Constitutional Reform and Governance Act or CRaG provisions?Q
Drew Hendry (Scottish National Party, Inverness, Nairn, Badenoch and Strathspey)
Q To follow on from that, do you feel you have had enough information about this free trade agreement before it has come to this stage?
Drew Hendry (Scottish National Party, Inverness, Nairn, Badenoch and Strathspey)
Q I have one final question on that subject. You said you have had extensive engagement. Do you think it is right that it has come to this stage without the parliamentary scrutiny I have mentioned?
Nia Griffith (Labour, Llanelli)
In the past, there has been criticism from some in your organisation that there was no SME chapter in the treaties. Do you feel that the Bill provides sufficient protections and the mechanisms that you would wish to see to give that ongoing support to small businesses?Q
Bill Esterson (Labour, Sefton Central)
Good morning, Lucy. You talked about the potential challenge of larger Australian and New Zealand businesses winning UK Government contracts. Is there anything in the legislation you would like to see amended to support small UK businesses in winning Government contracts when facing that international competition?
Derek Twigg (Labour, Halton)
Lucy, just before you answer I should say that we have now been joined by Andy Burwell and William Bain. We have had a few technical problems, but welcome to you both. Will you please introduce yourselves briefly to the Committee?
Derek Twigg (Labour, Halton)
Thanks very much. Lucy has been holding the fort and was just about to answer Bill Esterson’s question, if she has not forgotten it.
Bill Esterson (Labour, Sefton Central)
Q Let me repeat the question so that the other witnesses can address it, too. Lucy made a point about the concern about larger Australian and New Zealand businesses winning Government contracts in the UK. I asked her what kind of amendment might be made to the legislation to support smaller UK businesses—to which we can add larger UK businesses, as you have both joined us—as a defensive measure in respect of UK Government procurement.
Derek Twigg (Labour, Halton)
We will take Lucy first as she was asked first.
Derek Twigg (Labour, Halton)
William, do you want to add anything to that?
Derek Twigg (Labour, Halton)
Andy?
Derek Twigg (Labour, Halton)
Mr Esterson, have you finished your questioning or do you have further questions?
Bill Esterson (Labour, Sefton Central)
No, that is fine.
Derek Twigg (Labour, Halton)
I call Lloyd Russell-Moyle.
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
I have heard some concern about the unequal nature of procurement with public contracts. Companies from Australia are able to have all the rights at a local and devolved level, but that is not necessarily afforded to our companies at a state and local level in Australia. Do you have views on what measures might be taken to rebalance that and ensure that, whatever the access is, it is the same?Q
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
Q So you are not in favour of any changes to the Bill or the trade agreement that would give those protections from day one? You think these things can be worked out as we go along?
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
What about the other two?
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
Q The Bill allows the Secretary of State to make regulations when they wish, not necessarily when required. That gives them a bit more scope and does not require them to lay the regulations for a vote in the House, which gives more time for you to hear about them. They can just lay them through the negative procedure, and they usually become regulations without much fanfare. Is that an adequate way to announce regulations and allow the discretion of the Secretary of State? Or would you want a stronger consultative process, or a vote, or a restriction on what the Secretary of State can do that is a bit more written down?
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
But a requirement for the Secretary of State to consult before regulations are made might be useful.
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
William and Andy, do you have any views on this?
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
Q Do those things need to be on the face of the Bill? In respect of a requirement for the Secretary of State to have consulted business and industry beforehand and to have given a certain amount of pre-warning that changes are being considered, are you confident that that will happen anyway, whether under the current Government or whichever future Government come in? Would you prefer something to be on the face of the Bill to outline that process?
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
Thank you.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q I am sure that the three of you have had as much difficulty as I have had in keeping up with the ministerial changes in the Department for International Trade in recent months. One former Exports Minister said that he was unhappy with the level of support given to British exporters by the Department; do you share that assessment, or do you think he was just upset about something else when he made those comments?
Gareth Thomas (Labour/Co-operative, Harrow West)
Can you flesh that out? It sounds like you think the regime is not very good at the moment. You said that the export support service was just pointing people to a website, and you implied that businesses face a lot of difficulties that are not being picked up and addressed by Government.Q
Derek Twigg (Labour, Halton)
May I remind the Committee to make sure that questions are within the scope of the Bill?
Gareth Thomas (Labour/Co-operative, Harrow West)
Thank you for getting me back on the straight and narrow, Mr Twigg. In terms of mitigating the risk, one of our later witnesses, Professor Sanchez-Graells, suggested in evidence to the International Trade Committee that there were likely to be some additional legal risks for businesses trying to win Government contracts in Australia and New Zealand. Is that the type of risk that you worry about or not?Q
Gareth Thomas (Labour/Co-operative, Harrow West)
I wonder if Mr Bain or Mr Burwell have a view.
Gareth Thomas (Labour/Co-operative, Harrow West)
I wonder if I can push you, Mr Burwell. The CBI represents some of the biggest businesses in Britain that export to Australia and New Zealand. You will be aware of the evidence given to the International Trade Committee by Professor Sanchez-Graells, suggesting that there were some serious risks of regulatory chill—I think that is the phrase he used—from the remedies available to business if contracts, as they perceived it, were unfairly tendered and put them at risk. Those remedies are not available in quite the same way as they are in the European Union or in other jurisdictions. Do you share that concern, or do you think he is exaggeratingQ ?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Just to push you a little further, if I may, presumably you are enthusiasts for the WTO government procurement agreement. He appeared to be saying—we will have the chance to push him further on this in the evidence he gives this afternoon—that the UK-Australia FTA appears to undermine the GPA and that the comprehensive and progressive agreement for trans-pacific partnership, which potentially will succeed the piece of legislation that we are debating, will also undermine the GPA. Would that be of concern to the CBI, or are you fairly relaxed about it?
Derek Twigg (Labour, Halton)
If there are no further questions, I thank the witnesses for their evidence. We will move on to the next witness.
Examination of Witness
Derek Twigg (Labour, Halton)
We will now hear oral evidence from Leo Verity, the senior political adviser at the Trade Justice Movement, who is appearing via Zoom. The session will last until 10.35 am. Could the witness introduce themselves?
Drew Hendry (Scottish National Party, Inverness, Nairn, Badenoch and Strathspey)
Q You will be aware that the scope of this session is very limited, but what is the view of the Trade Justice Movement about the fact that the implementing legislation is being introduced for the New Zealand free trade agreement before Parliament has had the opportunity to debate the agreement under the CRaG provisions?
Drew Hendry (Scottish National Party, Inverness, Nairn, Badenoch and Strathspey)
Q Do you think that has led to a deficit in the ability of organisations such as yourselves and others to communicate with MPs to ensure that issues are raised in a timely manner and through a proper process, so that people can see publicly the scrutiny of such an important piece of legislation?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Just to pursue that area of questioning, we hope to table amendments that will improve the scrutiny of what comes out of the Bill. Talk us through what you understand about the way that both Australia and New Zealand, or other jurisdictions, scrutinise their free trade agreements, which might be an improvement on the process we currently have here in the UK.
Derek Twigg (Labour, Halton)
Can I remind everybody to stick to the scope of the Bill? A lot of the debate is very relevant, but please keep that in mind, in both asking questions and answering them.
Bill Esterson (Labour, Sefton Central)
Q Good morning, Leo. On the points you were making, the Bill is the implementation of the agreement; is there anything we can do by amending the Bill to address concerns we may have about what is in the free trade agreement?
Bill Esterson (Labour, Sefton Central)
Q You mentioned your concern about the negative procedure. I think by implication you were saying you would like to see that replaced with an affirmative procedure. What other concerns about the Bill do you have that you think we might want to address and attempt to amend?
Bill Esterson (Labour, Sefton Central)
Q The Procurement Bill will repeal the provisions of this Bill. Given that the ratification of the FTAs is likely to be months away, why do you think the Government introduced this Bill separately?
Derek Twigg (Labour, Halton)
I should just say that the session will finish at 10.35.
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
Q It is good to see you again, Leo. We have seen you a few times in the International Trade Committee and at the WTO last week.
The Bill allows the Secretary of State to make regulations in a relatively broad way. First, do you think it would be useful to restrict more tightly what the Secretary of State can make those regulations on? If so, how? Secondly, would it be useful to include on the face of the Bill a requirement to consult with stakeholders and non-governmental organisations, or even with the advisory committees and standing committees that already exist in the Department, and/or the International Trade Committee, which as we know was treated appallingly by the Department under its previous leadership?
Derek Twigg (Labour, Halton)
We do not have time for any further questions so, on behalf of the Committee, I thank the witness for his answers.
Derek Twigg (Labour, Halton)
Q We will now hear oral evidence from Chris Southworth, secretary general at the International Chamber of Commerce, who is appearing via Zoom. We have until 10.55 for this session. Can the witness please introduce himself for the record?
Derek Twigg (Labour, Halton)
Order. Sorry, Mr Southworth. This is very useful information and we are very grateful, but we need to move on to questions. I will ask Gareth Thomas to start the questioning, and I am sure you can add what you need to add at that point.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q You have helpfully touched on CPTPP, which is obviously going to supersede the Australia and New Zealand FTAs. Do you have any concerns that the CPTPP might take away things in the Australia and New Zealand FTAs that are good and should therefore stay on the statute book? Or will the CPTPP just allow us to get closer to the Singapore digital agreement vision that you just described?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Okay. Let me pick up another area. Do you see the Australia and New Zealand FTAs as offering lots of scope for small businesses, or are they to win Government contracts, or are they more likely to be for much bigger businesses to take advantage of?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q One of the former Ministers at the Department for International Trade suggested that the Department was not doing enough to help SMEs to export. Do you share that judgment or is everything rosy?
Derek Twigg (Labour, Halton)
It is important that we keep within the scope of the Bill.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Thank you, Mr Twigg. Mr Southworth, we are obviously interested in the extent to which the Government are going to provide support to businesses to export to Australia and New Zealand. We have been struck by the decision, which you allude to, to take money away from the British Chambers of Commerce to help businesses export to Australia, New Zealand and elsewhere. If we are lucky enough, I hope to table an amendment to allow more debate on that issue. Are you absolutely clear in your mind that it was the wrong decision by the Government to take that money away a year ago, or do you think there were good reasons to do so?
Derek Twigg (Labour, Halton)
Can I remind you again that, in both questions and answers, we must stick to the Bill and not debate the wider policy?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Absolutely—thank you, Mr Twigg.
One of our later witnesses is a gentleman called Professor Sanchez-Graells, who gave evidence to the International Trade Committee on some of the legal issues relating to remedies for businesses that feel they have been unfairly treated in a tendering process. If I have understood his evidence correctly, he argues that the remedies available under the UK-Australia FTA are worse for businesses that have been treated unfairly than those available under deals we have done with similar countries, such as the EU and New Zealand. As a result, there might be regulatory chill—it might put businesses off bidding for Government contracts in Australia. Is that something that you worry about? If his evidence suggests that there is a serious issue, do you think the Government would need to address it quickly?
Derek Twigg (Labour, Halton)
If there are no further questions, I thank the witness for his evidence.
Derek Twigg (Labour, Halton)
We will now hear oral evidence from John Cooke, chair of TheCityUK’s liberalisation of trade in services committee, appearing via Zoom. We have until 11.25 am for this session. Mr Cooke, would you like to introduce yourself? I will then ask Members to ask you questions.
Derek Twigg (Labour, Halton)
In this session. There are a number of evidence sessions.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Thank you, Mr Cooke, for being willing to give evidence to us, and congratulations on being one of the great survivors of the trade policy world, at least in the UK. Do you think the deals with Australia and New Zealand are as wonderful as the Government would have us believe? Could they have been improved in any way, shape or form?
Derek Twigg (Labour, Halton)
In respect of the Bill—we are talking about the Bill.
Gareth Thomas (Labour/Co-operative, Harrow West)
Yes, in respect of the Bill.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q The legislation that we are debating is likely to be superseded by both the Procurement Bill, if it comes into force, and by the CPTPP. Beyond acting as a stepping stone to the CPTPP, is there any residual value to the Australia and New Zealand FTAs in themselves, or is their value purely that they are a way to prepare Britain for the CPTPP?
Derek Twigg (Labour, Halton)
We have lost the witness, so I will suspend the session until—hopefully—we get Mr Cooke back.
Derek Twigg (Labour, Halton)
Welcome back. Mr Cooke, can you confirm that you hear us okay?
Derek Twigg (Labour, Halton)
I think you were halfway through an answer, or coming to the end of it. Do you want us to move on to the next question?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q A former Exports Minister in the Department for International Trade said that the Government were not doing enough to help exporters. Is that a view you share, or was he just upset about something else?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q As I understand it, one of the key concerns for businesses bidding for Government contracts overseas or domestically—often when they have to invest huge amounts of money in putting a bid together—is that they have confidence that, if they think they have been treated unfairly, remedies are available to them to get the tendering process suspended or compensation for the way in which the process has played out. It is likely to be put to us—it was certainly put to the Select Committee by Professor Sanchez-Graells, an expert in Government procurement—that the UK- Australia FTA includes measures that reduce the remedies available to businesses bidding for Government contracts. Would that be a concern for any of your members, or is it something you are not familiar with?
Gareth Thomas (Labour/Co-operative, Harrow West)
Fair enough. Thank you very much, Mr Cooke.
Derek Twigg (Labour, Halton)
As there are no further questions from Members, I thank the witness for his evidence.
Mark Pritchard (Conservative, The Wrekin)
We are now sitting in public and the proceedings are being broadcast. We will now hear oral evidence from Sophie Jones, director of public affairs at the British Phonographic Industry, appearing via Zoom. We have until 2.15 pm for this session. Please will the witness introduce herself for the record?
Gareth Thomas (Labour/Co-operative, Harrow West)
Thank you, Ms Jones, for joining us to give evidence. There was a sense that the Government were in a rush to get the Australia free trade agreement, and to a lesser extent the New Zealand free trade agreement, signed. If they had not been in such a rush, how might they have improved on the deals that they agreed?Q35
Gareth Thomas (Labour/Co-operative, Harrow West)
Q One of the issues that we hope to explore in Committee is the extent to which the commitments that have been made under the free trade agreement, in particular those under the procurement chapter of the Bill, can be translated into actual export orders. I am sure you will be aware of the comments of the former Exports Minister, who lamented that his own Department was not doing enough to help British exporters. It was the comments that were made in July. What else could the Department for International Trade do to support exporters in your industry, in particular those exporting to Australia and New Zealand?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q I just want to push you on the extra help in particular for small and medium-sized businesses to exploit the opportunities that you were telling us are there in the Australia and New Zealand markets. Just exactly what sort of additional support to a small business would you think is necessary? We are obviously particularly interested in procurement, but I would be interested in your view.
Mark Pritchard (Conservative, The Wrekin)
If there are no further questions from Members, I will thank the witness for her evidence. We will now move on to the next panel. Thank you, Ms Jones.
Examination of Witnesses
Mark Pritchard (Conservative, The Wrekin)
We will now hear oral evidence from Gareth Parry, senior policy and communications officer for the National Farmers Union of Wales, Jonnie Hall, director of policy for the National Farmers Union Scotland, and Donald MacKinnon, chair of the Scottish Crofting Federation. All three will be appearing via Zoom. Welcome also to Nick von Westenholz, director of international trade at the National Farmers Union. We have until 3.5 pm for this session. Please could the witnesses introduce themselves for the record?
Mark Pritchard (Conservative, The Wrekin)
Thank you, Mr Parry, for joining us at comparatively short notice. I very much appreciate you taking the time today. Will you introduce yourself?
Mark Pritchard (Conservative, The Wrekin)
Thank you. Some might ask why we are doing that twice, but it is because we do not know who you are even though I am reading out the names. Now we do, so we are very grateful. We now have questions from colleagues.
Nia Griffith (Labour, Llanelli)
As I am sure you are all well aware, the Bill is about procurement. Do you feel that it will enable UK farmers and food producers to benefit from procurement by Australian and New Zealand public bodies, as much as it enables Australian and New Zealand farmers and processors to benefit from UK public sector contracts? Will you elaborate a little on the reasons you have your views?Q
Mark Pritchard (Conservative, The Wrekin)
For those of you joining us via Zoom, I can see all of you clearly, so if you raise your physical hand, we can go from there. Nick.
Mark Pritchard (Conservative, The Wrekin)
Would any other witnesses like to respond?
Drew Hendry (Scottish National Party, Inverness, Nairn, Badenoch and Strathspey)
All your organisations are very active in lobbying MPs on issues that you find of concern to your members. What is your view of the fact that the implementing legislation is being introduced for the New Zealand free trade agreement before Parliament has had an opportunity to debate the agreement under the CRaG processQ ?
Mark Pritchard (Conservative, The Wrekin)
Before I call Anum Qaisar, I think Nia Griffith has a supplementary, or another question.
Nia Griffith (Labour, Llanelli)
Q Yes, if I may, I will follow up with a couple of questions. Am I to understand from your answers to my question that you are in agreement with the Government’s own impact assessment that we will actually take a hit on GVA on agriculture and processed food products?
Nia Griffith (Labour, Llanelli)
Q You have mentioned good food and wanting to buy British. Obviously, the public are now very interested in ethical purchasing, including having high animal welfare standards. Do you think that the Bill will allow a UK public body to insist on procuring products produced to higher animal welfare standards, and thus favour UK produce? Would you suggest any ways in which the Bill could be improved or amended?
Mark Pritchard (Conservative, The Wrekin)
I remind colleagues that the scope of the Bill is quite narrow, as Nick alluded to. I do not know whether any other witness wants to comment on that question.
Anum Qaisar (Scottish National Party, Airdrie and Shotts)
Thank you to the panel for joining us this afternoon. There has been an indication that suppliers in other countries may receive the same commitments made to Australia and New Zealand. What impact, if any, will that have on your sector’s ability to compete for UK public sector contractsQ ?
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
NickQ , you mentioned some carve-outs around procurement on environmental grounds, but we know from the Government’s numbers, which I challenged on the International Trade Committee, that they believe that New Zealand lamb, for example, even with the import carbon, is lower carbon than British lamb. As I say, I challenged them on some of their figures on Welsh lamb, in particular, because I am not convinced of that. However, assuming that is the case, the environmental carve-out would not stand and, on price and environmental grounds, Welsh lamb would effectively be excluded from procurement. We could be in a situation where schools in Wales were not able to serve Welsh lamb to their children, and were instead serving New Zealand lamb.
The deal does not cover schools in New Zealand and Australia, because those public institutions are at the state level, not the federal level. If, for example, we produced a certain crop or fish, such as British cod, cheaper, those products would not have that easy access, so people in Australia having fish and chips would not necessarily have British fish or British potatoes. Do you not think there is an inherent unfairness in this deal? Should there be some procurement conditions in the Bill to ensure that it is about reciprocity and, where reciprocity does not exist, to allow devolved or local authorities to take a divergent approach, as Australian local authorities will be able to do?
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
Q That is a fair point. The figures I quoted were from the Government’s Trade and Agriculture Commission, which gave evidence to the International Trade Committee recently. The Bill not only allows the Secretary of State to implement secondary legislation where it is required, but allows them to do so when they think it would be advisable. That is broader. We have signed an asymmetrical deal; we have given away more than we have got, and have opened up our markets more than the Australians have opened theirs to us. We will allow in a lower standard of goods, but the Australians will do likewise. The Government have sold us down the river, because we have accepted a deal written by the Australians. Should we be slightly more restrictive in this Bill? Should we say what things are required by the deal, and not give the Secretary of State any wriggle room to suddenly leverage in other things that they might want to include?
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
Q Hopefully through the affirmative procedure.
Bill Esterson (Labour, Sefton Central)
Between the four of you, you have raised a number of concerns, including on standards, scale of production, particularly in Australia, quotas and their implementation, carbon footprints and local exemptions. If those concerns cannot be addressed in the Bill, do you think there is a way of addressing them in the Procurement Bill? If so, what sort of provisions might you want to see introduced in that legislation?Q
Mark Pritchard (Conservative, The Wrekin)
Order. The hon. Gentleman, who is a very experienced Member, tempts our witnesses to comment on other Bills. Even though he does so in the context of this Bill, that is slightly out of scope of the Bill. Perhaps he might rephrase his question.
Bill Esterson (Labour, Sefton Central)
I can certainly rephrase it. What sort of provisions would you ideally like to see in this Bill?
Mark Pritchard (Conservative, The Wrekin)
Excellent. You confirm your experience and political agility.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q The Trade and Agriculture Commission has come up in this conversation a number of times. I hope to explore its role, and possible future role in procurement, in line-by-line scrutiny next week. Could the witnesses describe what they see as the commission’s strength, and what could be done to make it stronger still as a force for scrutinising FTAs?
Mark Pritchard (Conservative, The Wrekin)
The shadow Minister wants to come back.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q My last question is this. The Government have sold the benefits of the two FTAs as partly being about the huge, new, billion pounds-worth of Government procurement options that will be available. Do you think that that is one of the reasons why farming has been thrown under the bus? Was it that the opportunities in other sectors, such as Government procurement, were so good that they could afford to give so much away to the Australians? Or were there other reasons—inexperience, worries about Brexit and so on—why farming came off so badly?
Kieran Mullan (Conservative, Crewe and Nantwich)
To help me understand better how our arrangements compare to those of others, can you say how much scrutiny you feel MPs had of procurement arrangements when we were in the EU, as compared to now, under our independent approach?Q
Kieran Mullan (Conservative, Crewe and Nantwich)
Q In reality, was that ever exercised?
Kieran Mullan (Conservative, Crewe and Nantwich)
I thought not. Thank you.
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
What about by Belgium?
Kieran Mullan (Conservative, Crewe and Nantwich)
By us. [Interruption.]
Mark Pritchard (Conservative, The Wrekin)
Order. If colleagues have got something to say, they should say it through the Chair for the benefit of Hansard, the broadcasters, the public and most of all out of courtesy to our witnesses. Thank you Dr Mullan. If there are no more questions, I thank the witnesses for their time. In particular, if I may, I thank Mr Parry, who came in at late notice; we certainly wanted to hear from Wales.
Examination of Witness
Mark Pritchard (Conservative, The Wrekin)
Professor Albert Sanchez-Graells is professor of economic law and co-director of the centre for global law and innovation at the University of Bristol law school. He is appearing via Zoom, and this session will end at 3. 25 pm. For the record, could you please introduce yourself, professor? Thank you, sir.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Thank you very much for being willing to give evidence to us. In the evidence that you gave to the Select Committee on International Trade and the International Agreements Committee in the Lords, as well as some media commentary, I understand that you suggested that the procurement chapters of the Australia deal in particular deviate from the Government procurement agreement. Potentially, there are some aspects of deviation that will undermine the Government procurement arrangement and create legal uncertainty for businesses, and therefore potentially some regulatory chill that might discourage businesses from bidding for Government procurement contracts. Is that right? Could you explain your thinking in a bit more detail?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q That is extremely helpful, professor. I wonder, though, whether you could bring what you have said to life a little more with two examples. Let me give the example of High Speed 2. Obviously it is a big UK national infrastructure project, where clearly we would want competition but we would not want legal problems to delay that investment when it eventually kicked in. Presumably the Melbourne airport link, which the Australian Government authorities are currently tendering for, is also a significant infrastructure project for them and one in which British business might be interested. You have concerns about remedies. Could you describe them in the context of those two big infrastructure projects?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q To pursue this a bit further, as I understand it from what you are saying, the GPA includes every country that is still in the European Union—the French, the Italians and so on—and if their companies were treated unfairly while bidding for contracts in Australia, they would have better access to remedies than a British company treated in a similarly unfair way. Is that correct?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q As I understand it, these agreements are going to be superseded by, on the one hand, the Procurement Bill coming down the line and, on the other hand, the comprehensive and progressive agreement for trans-Pacific partnership, assuming accession takes place. Will these problems be resolved by the CPTPP, so we do not need particularly to worry about this Bill? Or do they just continue?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q What you appear to have just said is that there are significant differences between the procurement chapter under the Australian FTA and the one under the New Zealand FTA. Is your sense that the Government realised they had made a mistake in terms of remedies under the Australian FTA and therefore improved things under the New Zealand FTA? Or was it just down to good luck that we do not have the same problems in the New Zealand FTA as we have in the Australian FTA?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Okay. You touched on the issue of investment protection. I am not experienced enough in procurement to be able to reprise exactly the line you took, but you mentioned the potential scope for action in terms of investment protection. That brings into play the whole issue around investor-state dispute settlements, as I understand it. Could you confirm that, and explain how that might be a problem?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q The last question I wanted to ask was about the impact assessment, where the Government claimed that there would be an extra £10 billion of procurement opportunities for British business. Given what you have said about the legal uncertainties, do you think that £10 billion is a realistic figure or overstated?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Very lastly, as I understand it the £10 billion figure is an Australian estimate anyway, albeit that the UK Government claim that they have checked it out and, remarkably, think it is accurate. Is that fair?
Mark Pritchard (Conservative, The Wrekin)
If there are no further questions, I thank the witness for his evidence. We will move on to the next panel.
Mark Pritchard (Conservative, The Wrekin)
We will now hear oral evidence from Michael Gasiorek, director of the UK Trade Policy Observatory, who is joining us via Zoom. This session will end at 3.45 pm. Will the witness please introduce himself?
Nia Griffith (Labour, Llanelli)
Q Good afternoon. I will pick up on some of the issues that have been noted in your written evidence. In the context of the Bill, which, as we know, is about procurement, you say that there are “unclear” technical and legal mechanisms to ensure compatibility of data privacy between the UK and Australia, and that
“This may endanger…the EU’s…adequacy decision to the UK”,
and public trust, which would obviously be a very serious issue. Is there any way that we could remedy your concerns through the Bill?
Nia Griffith (Labour, Llanelli)
Q Let us turn to the economic side, then. You say that the economic impact of the agreement is very limited. Again, are there any ways in which the Bill could be improved that would give better opportunities and ensure a greater economic impact?
Nia Griffith (Labour, Llanelli)
Q On the advantages and disadvantages in procurement processes, does the Bill deliver well for UK companies, or could there be ways of improving it?
Mark Pritchard (Conservative, The Wrekin)
Okay. If there are no further questions from Members, I thank the witness for his time.
Mark Pritchard (Conservative, The Wrekin)
We will now hear evidence from our next witness, Rosa Crawford, policy officer at the TUC, who is appearing via Zoom. Rosa, thank you for being available a little early. We have until five minutes past 4 for this session. May I ask you to introduce yourself, for the record?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Thank you, Ms Crawford, for being willing to give evidence to the Committee. We are focusing on the procurement chapters of the Bill. The Government have told us that they will offer businesses billions of pounds-worth of new opportunities, and that that is one of the many reasons why these are fantastic trade deals. Do you share that assessment, or could the deals have been improved in any way?
Mark Pritchard (Conservative, The Wrekin)
Order. Forgive me, but we are not talking about the Procurement Bill. There is clearly some crossover, but if we can try to avoid the temptation to spend too much time on that crossover, I would be very grateful. Thank you.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Thank you very much, Ms Crawford. You mentioned that the Procurement Bill could supplant the Trade (New Zealand and Australia) Bill. Legislation to implement accession to the CPTPP could do the same, if the Government have their way. Will the problems to which you have alluded be resolved if we join the CPTPP, or will they remain and be similar to those that exist in relation to the two FTAs?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Some of our other witnesses, particularly those representing farming organisations, raised concerns about the scrutiny of trade deals. When we start line-by-line scrutiny next week, we certainly hope to explore the potential for greater scrutiny of the regulations that will flow from the Bill. What is the TUC’s position on scrutiny of the FTAs, and more generally?
Mark Pritchard (Conservative, The Wrekin)
Thank you. We have a little bit more time than we expected, but we also have quite a few questions to get through, as I am sure colleagues will be pleased to hear.
James Duddridge (Conservative, Rochford and Southend East)
Q Will the person giving evidence reflect on her comments encouraging more statutory instruments to be brought forward under the affirmative procedure? I feel that she may have inadvertently misled the Committee. Obviously, it would be legitimate bring forward SIs in that way, but there was an assertion that the negative procedure means no debate. My understanding is that any Member of Parliament can pray against regulations introduced through the negative procedure; that would guarantee debate in a Committee like this. I think I am correct; perhaps she could review her comments and clarify whether she has mis-spoken.
Mark Pritchard (Conservative, The Wrekin)
The supplementary point was made, and a supplementary supplementary point is now on the record as well, so I think we will move on.
Drew Hendry (Scottish National Party, Inverness, Nairn, Badenoch and Strathspey)
Q It was helpful to clarify that there is no guaranteed debate.
I would like to ask Ms Crawford a question that I have asked others, and it is very much on the theme of what you have been talking about. You have said that questions have not been answered on jobs, climate change, workers’ rights, environmental considerations, and indeed the correct way to spend public money. What is your view of the fact that implementing legislation is being introduced on the New Zealand FTA before Parliament has had the opportunity to debate it under the CRaG provisions?
Drew Hendry (Scottish National Party, Inverness, Nairn, Badenoch and Strathspey)
Thank you.
Mark Pritchard (Conservative, The Wrekin)
I call Lloyd Russell-Moyle.
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
Q Thank you for clarifying the negative and positive procedure. You are right that the use of the negative procedure means it will be very unlikely that, even if one Member prayed against it, it would get a full debate, and almost certainly not a vote. It would have to get the Front Bench and a large number of MPs to secure a debate. We know that on a number of occasions, even when things have been prayed against because of recess and scheduling times, they have still slipped through, so it is no guarantee, whereas a positive procedure is a guarantee.
I have asked people about the scope of the secondary legislation that the Secretary of State can lay down. In regard to the trade deal, the scope is slightly wider than “must”; it is currently phrased as “may”. Do you think that the scope is correct at the moment, or should it apply only to things that the Government are legally required to bring forward under the trade deal?
Lloyd Russell-Moyle (Labour/Co-operative, Brighton, Kemptown)
Q Thank you for that, Rosa—much appreciated. I want to bring you on to the way that the Secretary of State gets to introduce these secondary pieces of legislation, because that is how much of the Bill will be enacted in reality, not through on what is on the face of the Bill. There is no requirement for them to consult with businesses, trade unions or other stakeholders. I am not suggesting that we create a complex mechanism, but what is your view on a line requiring the Secretary of State at least to demonstrate that they have consulted stakeholders and potentially the International Trade Committee, and sought their views before the laying of a negative or positive procedure? What is your view on requiring consultation with the International Trade Committee and stakeholders such as trade unions?
Bill Esterson (Labour, Sefton Central)
Q Can we go back, Rosa, to what you were saying about the impact on workers’ rights, and indeed environmental considerations? Can I confirm that your concern—or one of your concerns—about the Bill and the trade agreement behind it is that organisations have the ability to undercut rights and standards, in spite of what is elsewhere in domestic legislation?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q You said in your earlier evidence that the previous Secretary of State had promised to include the TUC in private discussions about free trade agreements, presumably including the Australia and New Zealand deals, but that that had not happened. Has the general secretary of the Trades Union Congress ever had an apology from the Department for International Trade for not including you and adhering to that promise?
Gareth Thomas (Labour/Co-operative, Harrow West)
I do not know whether it is in order, Chair, but to save time for the Committee next week, I wonder whether the Minister might want to reassure the TUC representative that the Secretary of State will grant access to the TUC in the future. It would save a bit of time next week if he were willing to give that pledge.
Mark Pritchard (Conservative, The Wrekin)
I am very grateful for that very kind offer from the shadow Minister, but it is not for the Chair to adjudicate on what the Minister may or may not say in the future. I am sure that if the shadow Minister raises it next week, he can hear it directly from the Minister.
If there are no further questions, I thank Rosa Crawford for her time, and for spending a little more time with us than advertised. We very much appreciate it. Thank you very much indeed.
Mark Pritchard (Conservative, The Wrekin)
We will now suspend the sitting until the next witness is ready.
Mark Pritchard (Conservative, The Wrekin)
We will now hear oral evidence from Miles Beale, chief executive officer of the Wine and Spirit Trade Association, who is joining us via Zoom. This session will last until 4.30 pm. May I ask the witness to introduce himself for the record? Thank you for being prepared to join us slightly earlier than advertised; we are very grateful. Over to you, sir—[Interruption.] I think you are on mute. [Interruption.] We still cannot hear you. I think we will suspend the sitting while we iron out some of the technical difficulties.
Mark Pritchard (Conservative, The Wrekin)
Yes, we can hear you loud and clear.
Mark Pritchard (Conservative, The Wrekin)
Thank you very much indeed. I call shadow Minister Gareth Thomas.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Ministers have told us that this is a brilliant pair of deals, and the procurement chapters particularly so. Is there any way in which the deals could have been improved?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q Do you think those differences are there because the Australia deal was a bit rushed, or because of inexperienced negotiators? Explain why you think the difference is there.
Gareth Thomas (Labour/Co-operative, Harrow West)
Q The former Exports Minister said that there was not enough support for British exporters from the Department in which he had worked. That was back in July. Do you share the assessment that SMEs need more help to get goods to market in Australia and New Zealand?
Gareth Thomas (Labour/Co-operative, Harrow West)
Q What response have you had from the Department for International Trade? Is it rushing to respond to help, or just pointing you to a website—or are there some promises that the Minister will come and have a chat and things will get better shortly?
Gareth Thomas (Labour/Co-operative, Harrow West)
Why do you think the financial support has not been provided? Is the Treasury just not interested, or does it prefer to concentrate on other areas of support?
Mark Pritchard (Conservative, The Wrekin)
Order. Forgive me; we need to keep within the scope of the Bill. I am sure that the shadow Minister will have ample other opportunities to raise such issues, but today is not the occasion. Mr Beale, you do not have to respond to that.
If there are no other questions, I thank our witness for taking the time today, and I reassure him and his office that Zoom issues happen to us all. It is no problem at all. We are glad that we were able to hear your responses and evidence today. Thank you for your time; it is much appreciated.