Convention about Parliament legislating on devolved matters

Trade Bill – in the House of Commons at 3:44 pm on 17th July 2018.

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“(1) Regulations made under section 1(1) by a Minister of the Crown, may not normally make provision which would be within the devolved competence of a devolved authority unless—

(a) so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 7 of Schedule 1), the Scottish Ministers consent, or

(b) so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 8 of Schedule 1), the Welsh Ministers consent, or

(c) so far as they contain provision which would be within the devolved competence of a Northern Ireland department (within the meaning of paragraph 9 of Schedule 1), unless the Northern Ireland department has given consent.

(2) Regulations made under section 2(1) by a Minister of the Crown, may not normally make provision which would be within the devolved competence of a devolved authority unless—

(a) so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 7 of Schedule 1), the Scottish Ministers consent, or

(b) so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 8 of Schedule 1), the Welsh Ministers consent, or

(c) so far as they contain provision which would be within the devolved competence of a Northern Ireland department (within the meaning given in paragraph 9 of Schedule 1), unless the Northern Ireland department has given consent.

(3) This paragraph does not apply to regulations made by the Secretary of State under—

(a) section 35 or 58 of the Scotland Act 1998 (as amended),

(b) section 82 or 114 of the Government of Wales Act 2006 (as amended), or

(c) section 25 or 26 of the Northern Ireland Act 1998 (as amended).”—(Barry Gardiner.)

This new clause would ensure that regulations made by a Minister of the Crown within devolved competence require the consent of Ministers in devolved authorities in accordance with the convention about Parliament legislating on devolved matters while making clear that this does not alter the current powers of Ministers of the Crown in respect of international agreements.

Brought up, and read the First time.

Photo of John Bercow John Bercow Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Commons Reference Group on Representation and Inclusion Committee

With this it will be convenient to discuss the following:

New clause 21—Right of devolved authorities to appoint negotiators—

“(1) Each devolved authority shall have the right to appoint one member of any delegation tasked with negotiating an agreement with another state on behalf of the UK if that agreement falls within section 2(2).

(2) A devolved authority shall not make an appointment under subsection (1) unless the person appointed is reasonably competent to carry out the role of a trade negotiator.”

This new clause would permit the devolved authorities to each appoint one member of any negotiating delegation and would ensure that the person appointed is competent to carry out the role.

Amendment 25, in clause 1, page 1, line 15, at end insert—

“(1A) No regulations may be made under this subsection by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 7 of Schedule 1), unless the Scottish Ministers consent.

(1B) No regulations may be made under this subsection by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 8 of Schedule 1), unless the Welsh Ministers consent.”

This amendment and Amendment 26 seek to ensure that regulations cannot be made without consent from devolved Ministers.

Amendment 26, in clause 2, page 2, line 40, at end insert—

“(7A) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 7 of Schedule 1), unless the Scottish Ministers consent.

(7B) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 8 of Schedule 1), unless the Welsh Ministers consent.”

See explanatory statement for Amendment 25.

Amendment 27, in clause 2, page 3, line 3, at end insert—

“(10) No regulations may be made under subsection (8)(b) unless the Secretary of State has consulted with the Scottish Ministers and the Welsh Ministers.”

This amendment would require the Secretary of State to consult with Scottish Ministers and Welsh Ministers before deciding whether or how to prolong the period during which implementing powers can be used.

Government amendments 49, 50 and 61 to 63.

Amendment 28, in schedule 1, page 7, line 24, at end insert—

“(4) This paragraph does not apply to regulations made under section 1(1) or 2(1) by the Scottish Ministers or the Welsh Ministers.”

This amendment would remove the constraints on Scottish and Welsh Ministers in making regulations under this Act which modify retained EU law.

Government amendments 64 to 67.

Amendment 29, in schedule 1, page 8, line 5, at end insert—

“(4) This paragraph does not apply to regulations made under section 1(1) or 2(1) by the Scottish Ministers or the Welsh Ministers.

Requirement for consultation in certain circumstances

3A (1) No regulations may be made by the Scottish Ministers or the Welsh Ministers acting alone under section 1(1) or 2(1) so far as the regulations are to come into force before exit day unless the regulations are, to that extent, made after consulting with a Minister of the Crown.

(2) No regulations may be made by the Scottish Ministers or the Welsh Ministers acting alone under section 2(1) so far as the regulations make provision about any quota arrangements or are incompatible with any such arrangements unless the regulations are, to that extent, made after consulting with a Minister of the Crown.

(3) In sub-paragraph (2) ‘quota arrangements’ has the same meaning as in paragraph 3.”

This amendment would follow amendments made to the EU (Withdrawal) Bill to replace a requirement to seek the consent of the UK Ministers before making regulations to be commenced before exit day, or regulations making provision about quota arrangements, with a requirement to consult.

Government amendments 68, 69 and 76 to 78.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

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

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

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

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

A little later.

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

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

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

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

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

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

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

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

I am just about at the point where I will.

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

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade)

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

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

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

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

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

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

My hon. Friend’s definition of a veto seems to be disputed by the Scottish National party. Does he agree that, in terms of initiating as well as ratifying any trade negotiations, if the Scottish Parliament withholds its consent, that is, in effect, a veto?

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

My hon. Friend has put it very succinctly, and he is absolutely correct. That is why the SNP’s new clause 20 does not respect the devolution agreements; nor is it about ensuring that devolved authorities have a say. If that were the case, I would have expected SNP Members to support the amendment that we tabled in Committee, which called for the Joint Ministerial Committee to be convened to consult on the implementation of regulations under the Bill and on negotiations on future trade agreements. Indeed, our new amendment 19 would ensure that such consultation frameworks are established.

Similarly, in new clause 21, the SNP have sought to ensure that each devolved authority takes aspects of trade competence from Her Majesty’s Government and to provide for devolved authorities to have their own appointed trade negotiators at trade talks. Our new clause 4 could does not support that, because it could ultimately lead to several trade negotiators’ working against each other to secure the best terms only for their respective territories. Such a bunfight at the negotiating table would allow negotiating partners to play our own negotiators off against each other.

We believe that trade deals must ensure that benefits are delivered across the United Kingdom and that a whole UK approach must be taken to negotiations. That is why we have called for advanced consultation to ensure full and proper representation in those negotiations. It is also why we would have been happy to support new clause 22 had it been put to the vote. It sought to ensure transparency on trade talks, and it would have afforded a right to the devolved Parliaments to scrutinise all aspects of a trade agreement and related correspondence or documents as they so required.

Our new clause 4 would absolutely guarantee the right of consent to devolved Administrations whenever a Government sought to implement regulations to carry out their obligations under international treaties. What it would not do is give the devolved Administrations a power of veto over the ratification of international treaties, the negotiation of which is a matter for the Westminster Government. SNP Members would seek to secure the ultimate power of veto that has thus far eluded them in other amendments and that they have been very clear about seeking.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

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

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

“having an impact within the territory over which the devolved authority presides” was subject to this consent power. Quite clearly, every single trade agreement will be, as there will be exporters across the UK who can trade under the terms of that agreement. It is a thinly veiled attempt at securing the Wallonian veto power that Alan Brown told us in the Committee was his intention.

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

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

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade)

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

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

Photo of Angus MacNeil Angus MacNeil Chair, International Trade Committee

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

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade)

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

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

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

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

The Bill also affects provisions altering and constraining the Executive competence of Scottish Ministers. That means that, as with the powers in the European Union (Withdrawal) Bill, UK Ministers are given powers, as are Scottish Ministers, in devolved areas, and that those powers are exercisable without any devolved consent being required. Therein lies the problem. We are not seeking a veto. We are not seeking anything different. We are simply seeking the same rights and responsibilities over devolved matters that UK Ministers are giving themselves. That is why we have tabled amendments 25 to 30, in order to remove some of the restrictions that are now in place.

Photo of John Redwood John Redwood Conservative, Wokingham 4:30 pm, 17th July 2018

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

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade)

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

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

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

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

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

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

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

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

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader

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

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

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

Photo of John Redwood John Redwood Conservative, Wokingham

Does the hon. Lady understand that the common fisheries policy and international trade deals have been entirely in the power of the European Union? To the extent that they do not suit Scotland, it is the EU’s fault. Can she not see that power is coming back to the benefit of Scotland and the United Kingdom?

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader

Perhaps the right hon. Gentleman did not hear what I said. The issue is that the UK Government have chosen to negotiate swaps that directly disadvantage Scottish fishermen. The concern is that the weight of the population in the south of England will mean that the UK Government continue to take decisions that improve life for people in the south of England without taking account of the fact that those decisions are detrimental to people in Scotland.

The amendments we have tabled would therefore ensure that, in decisions that are taken in this place—decisions on which the UK Parliament will have more power than it has had in recent decades—the voice of Scotland is heard, because we need decisions that do not disadvantage the people of Scotland.

Photo of Angus MacNeil Angus MacNeil Chair, International Trade Committee

You catch me finishing off a Trebor extra-strong mint, Madam Deputy Speaker, and very nice it was, too.

At a time when the House is investigating bilateral trade agreements, my hon. Friend Kirsty Blackman made the fantastic point that for 40 years the UK Government stipulated in their bilateral trade agreements, “London airports only.” It was only when they demanded that Iceland should fly to London airports and Iceland said, “There is no way we’re flying to a London airport to get the sleeper back to Glasgow,” that some change was brought about—that was relayed to me by the Icelanders themselves.

Trade agreements, by their very nature, require trade-offs, and there should be aggregate gains to the two parties involved. Within those aggregate gains, there will be people in certain sectors who lose. My International Trade Committee heard about that from Kevin Roberts of Meat Promotion Wales. He told us that some 80% of Wales is either upland hills or pasture and is suitable only for livestock farming, which is a fragile sector. About 80% of the net farm incomes of Wales come from EU subsidies, which is another matter.

Let us consider a situation in which the UK Government find themselves in a trade negotiation with somebody who says, “Do you know what? See if you could let us have some access to your market for our lamb and we’ll give you something else.” Wales would lose out. The aggregate gain to UK GDP would be increased—John Redwood spoke on this point—but there would be a loss to Wales and there would be resentment in the UK to fiscal transfers back to Wales, which had sacrificed and given up things for the aggregate gain of the UK as a unit. That is one reason why many countries do not have the control freakery of the Labour and Conservative parties and allow territories, states and subnational Governments to have a voice at the table.

We should remember that Wales is not a member of the UK in the same way as Ireland is a member of the European Union. Ireland, as we have seen week in and week out, day in and day out, month in and month out, and hour in and hour out, has a real voice in Europe. In fact, some Brexiteers complain that Ireland is now the tail that wags the EU dog. If only that were a possibility for Wales, Scotland or Northern Ireland within the UK, there might not then be the concerns that my hon. Friend Stewart Hosie raised. That is why there should be some responsibility and some form of acknowledgement from the big beast of the UK—England, or the south-east of England—that it might gain from a free trade agreement at the expense of other places. We need some counterbalancing measures.

In a way, the Brexiteers are constitutional gold dust, because I want to see Scotland catching up with Ireland at the top of the EU growth league, rather than being at the bottom with the UK. This is putting a strain on the United Kingdom. As Laura Dunlop, QC, told the Exiting the European Union Committee:

“At the moment, there is a sense of a double-whammy: that the international arrangements, whatever they are going to be, will be negotiated by the UK Government, and then the UK Government will be telling the devolveds what they have to do to comply with them. The participation is minimal.”

That is an unsustainable way forward. It does not respect the words we heard in 2014, “Scotland, stay in and lead. Do not just be a part; lead the UK.” When push comes to shove, as we have seen all the way through the European Union withdrawal process, Scotland is shoved to one side. It is all rhetoric. If the Government had the grace to put some of their rhetoric into action, they would be accepting some of the amendments here today. This is not big stuff in any other country, so why is it a big deal in the centralised UK, both to the Tory Government and, sadly, to the Labour Opposition, who feel that they must also adopt the centralising approach. It is really disappointing from both of them.

Photo of George Hollingbery George Hollingbery Minister of State (International Trade) 4:45 pm, 17th July 2018

It is important to reiterate that the Government are committed to ensuring that withdrawal from the EU is a successful and smooth process for the whole of the UK. As set out in our trade White Paper, our intention, working closely with the devolved Administrations, is to seek to transition all existing EU trade agreements and other EU preferential arrangements.

Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Brexit), Shadow PC Spokesperson (Cabinet Office), Shadow PC Spokesperson (International Trade)

In a reply to my hon. Friend Ben Lake yesterday, the Secretary of State said the following in respect of having agreements ratified by the devolved legislatures:

“I would imagine that, in line with other agreements, we would seek legislative consent from the devolved Administrations where there were elements in which they were required to apply parts of those negotiations.”—[Official Report, 17 July 2018;
Vol. 645, c. 51.]

Is that the Government’s settled view on this matter? Notwithstanding the shortness of time, will the Minister give us a brief example of how that would apply?

Photo of George Hollingbery George Hollingbery Minister of State (International Trade)

I thank the hon. Gentleman for his question. What I can say on that is that the Scottish National party has already welcomed a number of measures in the Bill today. The negotiations are ongoing with the Welsh Government and I would hope that in due course we will reach those legislative consent motions.

As I was saying, this will ensure that England, Scotland, Wales and Northern Ireland maintain the greatest amount of certainty, continuity and stability in our trade and investment relationships for our businesses, citizens and trading partners. I am certain that all Members across the House support the importance of maintaining these trading opportunities for business across the UK, such as we see with the 10% of Scotch whisky exports that go to countries with which we wish to transition existing trade agreements. As parts of these agreements will touch on devolved matters, this legislation creates powers for devolved Administrations to implement them. These powers will be held concurrently by the devolved Administrations and the UK Government. That approach will ensure that where it makes practical sense for regulations to be made once for the whole UK, it is possible for this to happen. However, in the trade White Paper, and throughout the Committee stage, the Government have publicly and repeatedly committed to not normally use the powers in the Bill to amend legislation in devolved areas without the consent of the relevant devolved Administrations—and not without first consulting them. I make that commitment again today. As such, new clause 4 is unnecessary.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

I take in good faith the assurance the Minister has given across the Dispatch Box that the Government would not normally do that, but surely he cannot equate that with having the security of that commitment in the Bill. He must accept that on this side of the House we have tried to be even-handed in ensuring that the terms of the devolution settlement are respected both by government and by the nationalists in Scotland. If he is simply saying, “Everybody must rely on an assurance across the Dispatch Box”, that is not good enough.

Photo of George Hollingbery George Hollingbery Minister of State (International Trade)

I say to the hon. Gentleman that the Sewel convention is well established. It has been in place for many years and it has proved more than adequate up to now. We believe it is the right way forward to handle this particular issue, so we see no need for new clause 4 to be in the Bill.

We will work closely with the devolved Administrations to deliver an approach to the implementation of trade agreements that works for the whole of the UK, reflecting the needs and individual circumstances of England, Scotland, Wales and Northern Ireland. The Government’s approach respects a long-standing and robust convention between the UK Government and the devolved Administrations.

Photo of Anna McMorrin Anna McMorrin Labour, Cardiff North

Will the Minister explain how he is going to work with the devolved Administrations on this? For example, would this involve a UK council of Ministers?

Photo of George Hollingbery George Hollingbery Minister of State (International Trade)

Our intention is to carry on negotiating with the devolved authorities to find a way forward to get the signatures on the legislative consent motions that we wish to sign, and that we believe we are in a position to sign with those Administrations if we continue to co-operate with them and to negotiate properly.

Several hon. Members:

rose—

Photo of George Hollingbery George Hollingbery Minister of State (International Trade)

If Members do not mind, I shall make a little more progress.

Concurrent functions have always been a normal part of our devolution arrangements, and the Bill broadly replicates the concurrent approach taken under section 2(2) of the European Communities Act 1972. That has proved an efficient and effective precedent for the devolved Administrations and the UK Government. I thank Stewart Hosie for raising the issue of the devolved authorities’ role in the transitional agreements and any extension of the sunset provision. I am happy to confirm that, should they make the decision to use the three-year sunset extension or provision, the Government commit to engaging the devolved Administrations in that decision-making process in advance.

The Government have made a number of their own amendments to reduce restrictions on the powers conferred on devolved Ministers, bringing greater parity between UK Ministers’ powers and devolved Ministers’ powers. I particularly wish to draw the House’s attention to two changes. Government amendments 64 to 67 change the requirement on devolved Ministers from seeking the consent of UK Ministers to consulting UK Ministers before making regulations under the Bill’s powers that relate to quotas or the pre-exit commencement of regulations.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

I am concerned about what the Minister said. Does he not accept that if the provisions in clauses 1 and 2 are taken in conjunction with Government amendment 34, they will allow the Westminster Government to use Henry VIII powers to modify primary legislation or retained direct EU legislation in areas that are a matter of devolved competence? That is to go beyond “not normally”, which is why new clause 4 is essential.

Photo of John Bercow John Bercow Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Commons Reference Group on Representation and Inclusion Committee

Order. May I just emphasise that there is no obligation to continue up to the wire? I know that sometimes some people on the Government Bench say “Keep going till the cut-off point,” but it is not necessary to do so. There is a lot of other material to be debated. The Minister, who is a most courteous fellow, was extremely succinct earlier; he should not think that that was unpopular in the House.

Photo of George Hollingbery George Hollingbery Minister of State (International Trade)

You will be glad to hear, Mr Speaker, that I do not have a great deal more to say.

Let me engage with the shadow Secretary of State’s point. The powers that the Government are taking relate to where any regulations under section 12 of the European Union (Withdrawal) Act are in force and intersect with devolved Ministers’ rights to modify retained direct EU law. We are carving out an area in which the UK Government believe it is right and proper that the interests of the wider United Kingdom have precedence. I think the shadow Secretary of State understands what I mean; indeed, from the look on his face I believe he probably secretly agrees with what I am saying.

Photo of George Hollingbery George Hollingbery Minister of State (International Trade)

The hon. Member for Dundee East will know that work is ongoing around the extent of the areas which I have just outlined to the shadow Secretary of State and which will be covered by section 12. The changes I have outlined recognise the important role that the devolved Administrations will play in implementing trade continuity agreements in devolved areas. I reiterate that, in line with convention, UK Government will not normally implement such measures in devolved areas without the consent of the devolved Administrations.

The amendments demonstrate significant progress in our discussions with the devolved Administrations.

Photo of Stephen Kerr Stephen Kerr Conservative, Stirling

On a very quick point, is it not true that the working relationship between the UK Government and the Scottish Government is much more positive and much more healthy than we would be led to believe from listening to the rhetoric of the SNP Members in this place?

Photo of George Hollingbery George Hollingbery Minister of State (International Trade)

It is not for me to make judgments on how people approach negotiations, save to say that the experience of Government officials is that deep, proper and real conversations have occurred at Scottish Government level between officials and indeed between those in the Executive.

Let me reiterate that, in line with convention, the UK Government will not normally implement in devolved areas without the consent of the devolved Administrations. These amendments demonstrate significant progress in our discussions with the devolved Administrations to whom we have been listening throughout the passage of this Bill, as has been admirably demonstrated. We will continue to engage actively with the devolved Administrations to achieve the agreement of a legislative consent memorandum. As such, I hope that the hon. Member for Dundee East will now feel able not to push amendment 29 to a vote.

Question put, That the clause be read a Second time.

The House divided:

Ayes 248, Noes 315.

Division number 219

See full list of votes (From The Public Whip)

Aye

No

Question accordingly negatived.

Proceedings interrupted (Programme Order, this day).

The Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83 E).

Clause 1