Transfer Schemes

Trade Bill – in the House of Commons at 5:08 pm on 17th July 2018.

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“1 (1) The Secretary of State may make one or more staff transfer schemes in connection with the establishment of the TRA by this Act.

(2) A ‘staff transfer scheme’ is a scheme providing for the transfer from the Secretary of State to the TRA of any rights or liabilities under or in connection with a contract of employment.

2 (1) A staff transfer scheme may, among other things, make provision—

(a) for the transfer of rights and liabilities that could not otherwise be transferred;

(b) for the transfer of rights and liabilities arising after the making of the scheme;

(c) which is the same as or similar to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246);

(d) creating rights, or imposing liabilities, in relation to rights or liabilities transferred;

(e) about the continuing effect of things done by the Secretary of State in respect of any rights or liabilities transferred;

(f) about the continuation of things (including legal proceedings) in the process of being done by, or on behalf of, or in relation to, the Secretary of State in respect of any rights or liabilities transferred;

(g) for references to the Secretary of State in an instrument or other document in respect of any rights or liabilities transferred to be treated as references to the TRA;

(h) that is supplementary, incidental, transitional or consequential.

(2) A staff transfer scheme may provide—

(a) for the scheme to be modified by agreement after it comes into effect, and

(b) for any such modifications to have effect from the date when the original scheme comes into effect.

3 For the purposes of this Schedule—

(a) an individual who holds employment in the civil service of the State is to be treated as employed by virtue of a contract of employment, and

(b) the terms of the individual’s employment in the civil service of the State are to be regarded as constituting the terms of the contract of employment.”—(George Hollingbery.)

This amendment inserts a Schedule that sets out powers for the Secretary of State to make a scheme providing for the transfer of staff from the Secretary of State to the Trade Remedies Authority.

Brought up, and read the First time.

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

I beg to move, That the schedule be read a Second 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:

Government amendment 58.

Amendment 12, in schedule 4, page 14, line 34, at end insert

“with the consent of the International Trade Committee of the House of Commons,”.

This amendment would give the International Trade Select Committee scrutiny and consent powers for the appointment of Chairs of the Trade Remedies Authority.

Amendment 30, in schedule 4, page 14, line 34, at end insert—

“(aa) a non-executive member appointed by the Secretary of State with the consent of the Scottish Ministers,

(ab) a non-executive member appointed by the Secretary of State with the consent of the Welsh Ministers,”

The Trade Remedies Authority will undertake trade remedies investigations across the UK, which will inevitably touch on devolved areas or areas of significance to Scotland. This amendment would require the consent of Scottish and Welsh Ministers to the appointment of one non-executive board member each.

Amendment 13, in schedule 4, page 14, line 35, at end insert

“with the consent of the International Trade Committee of the House of Commons,”.

This amendment would give the International Trade Select Committee scrutiny and consent powers for the appointment of other non-executive members of the Trade Remedies Authority.

Amendment 22, in schedule 4, page 14, line 35, at end insert

“including representatives of UK manufacturing sectors and trade unions in manufacturing”.

This amendment would ensure that UK producers including manufacturers, and their employees, are included in the corporate governance of the new Trade Remedies Authority.

Amendment 80, in schedule 4, page 14, line 35, at end insert

“including representatives of—

(i) producers,

(ii) trade unions, and

(iii) each one of the devolved administrations.”

This amendment would ensure that the Trade Remedies Authority includes, among its non-executive members, representatives of key stakeholder bodies.

Amendment 14, in schedule 4, page 14, line 37, after “State” insert

“, and with the consent of the International Trade Committee of the House of Commons,”.

This amendment would give the International Trade Select Committee scrutiny and consent powers for the appointment of the chief executive of the Trade Remedies Authority.

Amendment 15, in schedule 4, page 14, line 38, after “State” insert

“with the consent of the International Trade Committee of the House of Commons,”.

This amendment would give the International Trade Select Committee scrutiny and consent powers for the appointment of the inaugural chief executive of the Trade Remedies Authority.

Amendment 23, in schedule 4, page 15, line 2, leave out from “must” to end of line 3 and insert

“, before appointing the other non-executive members, consult

(a) the Chair,

(b) organisations representing UK manufacturing sectors, and

(c) trade unions in manufacturing.”

This amendment would ensure that UK producers including manufacturers, and their employees, are included in the corporate governance of the new Trade Remedies Authority.

Amendment 16, in schedule 4, page 15, line 12, at end insert—

“4A It must be publicly disclosed if any candidate for appointment as a non-executive member of the TRA has, in the last five years, been employed by a political party, held a significant office in a political party, has stood as a candidate for a political party in an election, has publicly spoken on behalf of a political party, or has made significant donations or loans to a political party.”

This amendment would require candidates for appointment as non-executive members of the TRA to disclose political activity, consistent with guidelines set out in the Cabinet Office Governance Code on Public Appointments.

Amendment 17, in schedule 4, page 15, line 16, at end insert—

“5A It must be publicly disclosed if any candidate for appointment as an executive member of the TRA has, in the last five years, been employed by a political party, held a significant office in a political party, has stood as a candidate for a political party in an election, has publicly spoken on behalf of a political party, or has made significant donations or loans to a political party.”

This amendment would require candidates for appointment as executive members of the TRA to disclose political activity, consistent with guidelines set out in the Cabinet Office Governance Code on Public Appointments.

Amendment 18, in schedule 4, page 15, line 31, at end insert—

“10A A member of the TRA, whether executive or non-executive, shall not actively engage in any business, vocation or employment which may give rise to a potential conflict of interest, for the duration of their service on the TRA.”

This amendment would militate against conflicts of interest by precluding TRA members from engaging in any commercial activity for the duration of their time on the TRA.

New clause 1—EU customs union

“(1) It shall be the objective of an appropriate authority to take all necessary steps to implement an international trade agreement which enables the UK to participate after exit day in a customs union with the EU in the same terms as existed before exit day.

(2) Exit day shall have the meaning set out in section 20 of the European Union (Withdrawal) Act 2018.”

New clause 2—Review of the impact on the UK economy—

“(1) Before the end of the initial five year period, the Secretary of State must publish and lay before both Houses of Parliament an assessment of the impact of all international trade agreements implemented under section 2 of this Act on—

(a) the economy of the United Kingdom,

(b) the economy of the different parts of the United Kingdom and different regions of England, and

(c) individual economic sectors.

(2) The assessment in subsection (1) must so far as practicable analyse the expected difference in outcomes between the international trade agreements implemented under section 2 of this Act and those international trade agreements to which the United Kingdom would have been a signatory had it continued to participate in the EU Customs Union.

(3) In this section—

‘the initial five year period’ has the same meaning as in section 2(8)(a),

‘parts of the United Kingdom’ means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland

‘regions of England’ has the same meaning as that used by the Office for National Statistics.”

New clause 5—Implementation of a customs union with the EU—

“(1) It shall be the objective of an appropriate authority to take all necessary steps to implement an international trade agreement which enables the UK to participate after exit day in a customs union with the EU.

(2) Exit day shall have the meaning set out in section 20 of the European Union (Withdrawal) Act 2018.”

New clause 8—Internal Market Negotiating Objective—

“It shall be a negotiating objective of Her Majesty’s Government to ensure the United Kingdom has full access to the internal market of the European Union, underpinned by shared institutions and regulations, with no new impediments to trade and common rights, standards and protections as a minimum.”

New clause 9—UK membership of EFTA and the European Economic Area

“(1) It shall be the objective of an appropriate authority to achieve before exit day the implementation of an international agreement to enable the UK to become a member of the European Free Trade Association and continue as a signatory to the EEA Agreement.

(2) ‘Exit day’ shall have the meaning set out in section 20 of the European Union (Withdrawal) Act 2018.”

New clause 10—UK membership of EFTA—

“(1) It shall be the objective of an appropriate authority to achieve before exit day the implementation of an international agreement to enable the UK to become a member of the European Free Trade Association.

(2) ‘Exit day’ shall have the meaning set out in section 20 of the European Union (Withdrawal) Act 2018.”

New clause 11—Assessment of slavery or servitude—

The Secretary of State shall, before concluding negotiations relating to an international trade agreement, make an assessment of the steps taken by the other signatory to the agreement (or each other signatory) to prevent and punish activity which, if undertaken in England or Wales, would constitute an offence under section 1 of the Modern Slavery Act 2015 (slavery, servitude and forced or compulsory labour).”

New clause 15—Ratification of international trade agreements—

“An international trade agreement shall not be ratified unless it enables the United Kingdom to require imports to—

(a) comply with any standards laid down by primary or subordinate legislation in the United Kingdom regarding food safety, the environment and animal welfare, or

(b) have been produced to standards that are deemed by the Secretary of State to be comparable in effectiveness to those of the United Kingdom in protecting food safety, the environment and animal welfare.”

This new clause would ensure that UK standards regarding food safety, the environment and animal welfare could not be undermined by imports produced to lower standards.

New clause 17—UK participation in the European medicines regulatory network—

“(1) It shall be the objective of an appropriate authority to take all necessary steps to implement an international trade agreement, which enables the UK to fully participate after exit day in the European medicines regulatory network partnership between the European Union, European Economic Area and the European Medicines Agency.

(2) Exit day shall have the meaning set out in section 20 of the European Union (Withdrawal) Act 2018.”

This new clause would ensure that it is a negotiating objective for the UK Government to secure an international agreement through which the UK may continue to participate in the European medicines regulatory network partnership between the EU, EEA and the European Medicines Agency, ensuring that patients continue to have access to high-quality, effective and safe pharmaceutical and medical products, fully aligned with the member states of the EU and EEA.

New clause 18—Free trade area for goods—

“(1) Before exit day it shall be the objective of Her Majesty’s Government to achieve the implementation of an international agreement to enable the United Kingdom to establish a frictionless free trade area for goods between the UK and the EU.

(2) If an international agreement of the type set out in subsection (1) has not been agreed by 21st January 2019 then it shall be the objective of Her Majesty’s Government to achieve the implementation of an international agreement which enables the United Kingdom to participate after exit day in a customs union with the EU.

(3) ‘Exit day’ shall have the meaning set out in section 20 of the European Union (Withdrawal) Act 2018.”

This new clause would make it a negotiating objective of the UK to establish a free trade area for goods between the UK and the EU and if that cannot be agreed then it should be the objective of the UK to secure an agreement to enable the UK’s participation in a customs union with the EU.

New clause 19—Reporting on trade between the United Kingdom’s devolved nations and regions with the Republic of Ireland—

“(1) The Secretary of State shall, no earlier than 12 months and no later than 18 months after Royal Assent has been given to this Act—

(a) lay before both Houses of Parliament an assessment of the implications of this Act for trade between the constituent parts of the United Kingdom and the Republic of Ireland, and

(b) make arrangements for the assessment to be laid before the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly.

(2) In preparing the assessment under subsection (1), the Secretary of State shall consult with—

(a) the Scottish Ministers, the First Minister or the Lord Advocate,

(b) the Welsh Ministers, and

(c) a Northern Ireland devolved authority.”

This new clause would ensure that the impact of the UK’s exit from the European Union on trade across the border between the Republic of Ireland and Northern Ireland, and between the Republic of Ireland and other parts of the United Kingdom is properly reviewed and reported to Parliament.

New clause 25—Trade agreement with the EU: mobility framework—

“It shall be the objective of the Secretary of State to take all necessary steps to secure an international trade agreement with the European Union which includes a mobility framework that enables all UK and EU citizens to exercise the same reciprocal rights to work, live and study.”

Government amendments 31 to 35.

Amendment 11, in clause 2, page 2, line 12, at end insert—

“or (c) a regulatory cooperation agreement.”

This amendment would ensure that HM Government is able to efficiently replicate existing regulatory cooperation agreements that may be required for continuity of business arrangements if the UK exits the European Union.

Amendment 3, in clause 2, page 2, line 29, at end insert—

“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if:

(a) the provisions of that international trade agreement do not conflict with, and are consistent with—

(i) the provisions of the Sustainable Development Goals adopted by the United Nations General Assembly on 25 September 2015,

(ii) international human rights law and international humanitarian law,

(iii) the United Kingdom’s obligations on workers’ rights and labour standards as established by but not limited to the commitments under the International Labour Organisation’s Declaration on Fundamental Rights at Work and its Follow-up Conventions,

(iv) the United Kingdom’s environmental obligations in international law and as established by, but not limited to, the Paris Agreement adopted under the United Nations Framework Convention on Climate Change, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), and the Convention on Biological Diversity, including the Cartagena Protocol on Biosafety,

(v) existing standards for food safety and quality as set and administered by the Department of Health, the Food Standards Agency and any other public authority specified in regulations made by the Secretary of State,

(vi) the United Kingdom’s obligations as established by the Convention on the Elimination of All Forms of Discrimination Against Women and by the Convention on the Rights of the Child, and

(vii) the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law.

(a) the provisions of that international trade agreement do not in any way restrict the ability to determine whether public services at a national or local level are delivered by public sector employees, and

(b) the Secretary of State has laid before Parliament an assessment that considers the potential economic, social, human rights and environmental impacts of the international trade agreement on the contracting parties.”

Amendment 24, in clause 2, page 2, line 29, at end insert—

“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the Secretary of State has made an assessment under section (Assessment of slavery or servitude) in respect of that agreement.”

Amendment 81, in clause 2, page 2, line 29, at end insert—

“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if a principle of non-regression, according to which the protection of the environment, ensured by legislative and regulatory provisions relating to the environment, is incorporated.”

This amendment would ensure that environmental standards are not lowered in a new UK international trade agreement by maintaining and continually updating current standards through an environmental non-regression clause.

Government amendments 40, 41 and 43.

Amendment 20, in clause 2, page 2, line 40, at end insert

“and shall include any agreement to which the UK is party by virtue of membership of a free trade association, including the European Free Trade Association”.

This amendment would make it clear that the implementation powers under the Act would apply equally to implementation of any free trade agreement to which the UK is party through EFTA.

Amendment 5, in clause 2, page 2, line 40, at end insert—

“(7A) No regulations made under subsection (1) shall preclude the United Kingdom from participating in a customs union with the European Union following exit day.”

This amendment allows for the implementation of international trade agreements while leaving open the possibility of negotiating a customs union with the EU.

Government amendments 44 to 48 and 51 to 57.

Amendment 1, in clause 6, page 4, line 10, at end insert—

“(aa) the conduct of trade within a customs union within the meaning of section 31 of the Taxation (Cross-border Trade) Act 2018,”.

Amendment 21, in clause 6, page 4, line 10, at end insert—

“(aa) the consequences for the UK of membership of the European Free Trade Association,”.

This amendment would place a duty on the TRA to give advice to the Secretary of State on the consequences of membership of EFTA.

Government amendments 59 and 60.

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

There is a wide range of issues covered by this final group of amendments we are debating today. I therefore propose to focus on the Government amendments in my opening remarks.

We are committed to creating a world-class Trade Remedies Authority. That is why Government have already begun recruiting TRA staff into the Department for International Trade, so that they can be properly trained before the TRA becomes fully operational. Once the TRA is legally established, staff who have been recruited into the Department will be transferred over to the TRA. Government new schedule 1 and Government amendment 58 are crucial to ensuring that this transfer can take place. This is standard practice when establishing a new arm’s-length body, as set out in the Cabinet Office’s statement of practice on transfers of staff in the public sector.

Trade remedies cases can have material impacts on markets and jobs. We must therefore create an independent investigation process that businesses can trust. That is why we are setting up the TRA as an arm’s-length body, giving it the appropriate degrees of separation from government, and ensuring that people with the right qualities and qualifications are appointed to the board to oversee this new function.

There are other amendments in this group, tabled by other hon. Members, on the TRA. I will wait to hear the points they make before responding to the detail of those amendments. Before I sit down, however, I will underline the point made by my right hon. Friend the Secretary of State for Trade yesterday in his statement to the House. The Bill is about continuity rather than future arrangements. This is why we have now separately set out the role that Parliament, the devolved Administrations, the public, business and civil society will have in our future trade agreements. We believe our approach makes good on our commitment to build an inclusive and transparent future trade policy.

Amendments 44 to 47 reduce the sunset period and renewal periods from five to three years. This has been discussed in previous debates. Amendments 31 and 32 allow Agreement on Government Procurement, or GPA, power to reflect updates to the list of Government entities in the UK’s GPA schedule. Amendments 34, 40, 41 and 48 clarify the scope of the powers in clause 1 and 2. Amendments 59 and 60 update references to data protection legislation, and amendments 31, 35, 43, and 51 to 57 are drafting changes.

Photo of Judith Cummins Judith Cummins Shadow Minister (International Trade)

It is a pleasure to follow the Minister and to contribute to the Report stage of this important Bill.

I rise to propose amendment 80, in my name and that of my hon. Friends, on the Trade Remedies Authority, and to speak to the other clauses and amendments in this group. Labour supports new clause 5 and our own amendment 5 on the implementation of a customs union with the EU. Labour’s policy is for a new customs union with the EU to protect jobs and the economy, and to avoid a hard border in Northern Ireland. We will also be supporting new clause 18, as it keeps open the possibility of a customs union with the EU.

My Labour colleagues and I tabled amendment 5, which requires that any international trade agreement must not stop the UK participating in a customs union with the EU. This is in line with our party’s policy to negotiate a new customs union with the EU. As the Bill deals with international trade agreements, we wish to ensure that no other trade agreements impede on the UK’s capacity to enter into such a new customs union with the EU.

On new clause 18, as I have said, Labour believes that the only way to deliver frictionless trade and to prevent a hard border in Northern Ireland is to negotiate a comprehensive customs union with the EU. The Chequers White Paper published by the Government put forward a different proposal. We think that the so-called “facilitated customs arrangement” is unnegotiable, undeliverable and unworkable, but it at least accepts the need for frictionless trade and to prevent a customs border between the UK and the EU.

We understand that Government Members want to give their Prime Minister a chance to try to negotiate that, but if and when the Government prove that they cannot negotiate the unnegotiable, it is important that we take the obvious path to achieving frictionless trade—that is, a customs union. The Government should do as we have done and listen to the business community on this point. That is what new clause 18 will achieve. Although Labour thinks that the Government should not waste time on the facilitated customs arrangement, we will support the amendment. We will also support new clause 17, which deals with UK participation in the European medicines regulatory network.

I turn to the Trade Remedies Authority and amendment 80 in my name and that of my hon. Friends, and amendment 22. The Government made no major improvements to the Bill with regards to the Trade Remedies Authority, despite the unanimous criticism that was presented by business, trade unions and experts in the Bill Committee. Gareth Stace of UK Steel warned us:

“If we get this…wrong, we become the dumping ground—not just in Europe, but for the rest of the world.”––[Official Report, Trade Bill Committee, 23 January 2018;
c. 66, Q127.]

The Trade Bill sets up the Trade Remedies Authority and I am afraid that the Government have got it wrong.

At the time, we tabled amendments aiming to establish robust procedures for appointing non-executive members of the Trade Remedies Authority and to make it answerable to Parliament. Most importantly, we tabled an amendment seeking to ensure that the Trade Remedies Authority includes in its non-executive members representatives of producers, trade unions and each of the devolved Administrations. We therefore support the principle of amendment 22, as it calls for representatives of UK manufacturing sectors and trade unions to be included in the corporate governance of the TRA. It is a shame that the amendment has omitted representation of the devolved Administrations on the TRA board. That is why we have tabled amendment 80, which would have representatives of producers, trade unions and each of the devolved Administrations included among the non-executive members of the Trade Remedies Authority.

We also welcome amendment 30 in the name of Stewart Hosie, which calls for Scottish and Welsh Ministers to give their consent to the appointment of one non-executive member to the TRA from each devolved nation. We regret that there is no mention of Northern Ireland in the amendment, and we believe that the amendment’s purpose is also served by our amendment 80.

Finally, we support the Government’s new schedule 1, allowing them to move staff from the DIT to the TRA.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon 5:30 pm, 17th July 2018

It is a great pleasure to speak on Report and I rise to support new clause 9, amendments 20 and 21 and new clause 18. Let me start briefly with new clause 9. We are leaving the European Union and I accept the result of the referendum, but that referendum did not tell this House and this Parliament how we should do so. That is what Parliament is here to decide and what it is going to do.

I think the Common Market principles are the best way to leave the EU. The Common Market principles that I am referring to are the removals of barriers for trade between the United Kingdom and the EU and the protection and development of complex supply chains across the continent, which will protect, as my right hon. Friend Anna Soubry said yesterday, the jobs and livelihoods of our constituents. As we leave the European Union, I believe that should be the key priority of this House.

New clause 9 refers to the European economic area and the European Free Trade Association. EEA and EFTA members incorporate most of the single market regulations. Most goods are not checked for compliance with EU regulations at the border and I think that would go a long way to mitigate complex supply chains and the Irish border issue, as well as the potential congestion at UK ports. That is one reason I support the White Paper; it refers to a common rulebook.

Photo of John Redwood John Redwood Conservative, Wokingham

Does he understand that last year 21% of all the components needed for making cars under just-in-time principles came from outside the EU and passed our borders without friction or difficulty?

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

The right hon. Gentleman has just made the point that 79% of them do, and in business I was always taught the 80/20 rule, which I would advise him to apprise himself of.

As I was saying, the White Paper is very similar to the common rulebook, and that I think is appropriate. I will not dally too long on clause 9, but I think that the EEA-EFTA, as an institutional structure, is off the shelf, tested and something the EU is familiar with and which we could engage with. I accept, however, that the White Paper sets out a different direction, and I want to make sure we keep the White Paper and the plan negotiated and moving forwards.

What I really want to talk about tonight is new clause 18. I would contend, and I say to my Front Bench, that new clause 18 is exactly in line with their White Paper. It says that,

“it shall be the objective of Her Majesty’s Government to achieve the implementation of an international agreement to enable the United Kingdom to establish a frictionless free trade area for goods between the UK and the EU.”

That is absolutely in line with the White Paper. What causes the Government and others in the House concern is the word “union”.

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

It might help if I could advise the House that, in recognition of contributions from right hon. and hon. Members today, it is my intention to bring forward an amendment in the other place—[Laughter.] If I may. [Interruption.] If I may. Thank you.

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

It is my intention to bring forward an amendment in the other place that takes in the essence of new clause 18 but removes the defective element relating to the customs union. The Government amendment will restate our intention to establish a customs arrangement with the EU. [Interruption.]

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

Very few people ever say that, Mr Speaker.

It is a generous offer from the Front Bench, and one that I am tempted to accept, but I would say to the Minister: let’s do this the other way around. I will make him a generous offer. Why does he not accept new clause 18 today and then amend it in the Lords? [Hon. Members: “Hear, hear!] I will tell the House why. Subsection (2) of my new clause is entirely in line with the European Union (Withdrawal) Act 2018, which is now part of our law in this country, the House having passed it. All it says is that it should be the objective, after 21 January, which date is in clause 13(10) and (11).

Had I used any other word than “union”, the Front Bench would have accepted it. Frankly, I do not see the problem. Yesterday, we took several amendments that we were told did not undermine the Bill, and this does not undermine the Bill either. It keeps the plan on the road. I say to my Front Bench in all good faith: why not do it this way round? Accept new clause 18 now and I will work with them to find something in the Lords that they find acceptable.

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

It is the policy of the Government not to remain part of a customs union. That is why we cannot accept the amendment today. Clearly, we would not be able to implement any independent free trade deals and would still be a member of the commercial policy. We are absolutely clear that we wish to work with my hon. Friend to reach an agreement that is satisfactory to him. We will do that in the Lords over the next several weeks and come to a conclusion on this matter.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

And a good man, as my right hon. Friend says, and I know that he is fulfilling the Government’s wishes. But I remind him that I stood on a Conservative manifesto that said we were leaving “the” customs union. New clause 18 does not commit us to “the” customs union. It commits us to “a customs union”, which is a customs arrangement or a customs partnership. There is a slight deviation in the definition. This absolutely does not affect our ability to engage in international trade, for other customs unions with the EU are already in place. So I ask the Minister to think again during the 25 minutes before we vote on this matter, and to accept new clause 18.

Photo of Paul Williams Paul Williams Labour, Stockton South

I do hope that we can vote on new clause 17. NHS patients will not be helped if we leave the European Medicines Agency. Being part of the EMA means that when a new drug is developed, a common set of protocols is followed to get that medicine approved. The UK is a world leader in pharmaceuticals and biomedical sciences. We have been the driving force behind the EMA, which has provided significant employment and revenue here in London, and has helped to raise and maintain standards for patients throughout Europe. We have already lost the EMA to Amsterdam, but although we have lost it geographically, we still have the chance to be part of the European medicines regulatory network partnership, and continue to benefit from the work of the EMA.

There are three big markets for new drugs in the world: the United States, Japan and the EU. Companies already have to follow different processes to get their drugs approved in those countries, but, together with the EU, we are part of a single powerful block that represents 22% of the global pharmaceutical market. Companies prioritise getting their drugs to us, because we provide a single European system. If we leave the EMA, we will have only 3% of the global market. Quite simply, we will not be a priority for new drugs. Switzerland and Canada have separate approval systems, and typically get their new drugs six months later than the EU. That is the cost of leaving the EMA: a six-month delay. Try explaining to a patient that a new life-saving cancer drug will not be available to them because we left the EMA!

So why are we leaving? Our life sciences industry is not complaining about EU “red tape”; it likes the common system. According to the Association of the British Pharmaceutical Industry,

“Creating a standalone UK regulator would require significant resource, time and expertise, and...would…still leave the UK behind the US and EU”.

We are leaving the EMA because people voted to leave the EU, but how many people knew that when they voted to leave the EU, they voted to increase the cost of new medicines regulation, a cost that will be passed on to the NHS; to reduce the UK's international influence and excellence in this area of life sciences; and to delay access to new drugs for cancer patients? New clause 17 asks that we “take all necessary steps” to continue to participate in the European medicines regulatory network partnership. We could do that by remaining a member of the EU, by becoming a member of the European Free Trade Association, or by negotiating an associate membership of the EMA.

We are already seeing the high cost of Brexit to the NHS. We are seeing an exodus of EU staff which is making recruitment challenges much harder, we are seeing the threat to the supply chain if we leave the customs union, and now we face delays in the delivery of new drugs to cancer patients. It does not have to be this way. I will be voting for new clause 17 tonight, and I hope that Members in all parts of the House will put the interests of NHS patients above Brexit ideology and join me in voting to remain part of the European medicines regulatory partnership.

Photo of Phillip Lee Phillip Lee Conservative, Bracknell

It is a pleasure to follow Dr Williams, who is a co-signatory to my new clause 17, as are other medically qualified Members: Dr Whitford and my hon. Friend Dr Wollaston, the Chairman of the Health Committee.

We all recognise the importance of remaining part of the European medicines regulatory network partnership. New clause 17 would make it a “a negotiating objective” for the Government to secure an agreement that would allow the United Kingdom to continue to participate fully in the partnership. This is vital because it is how we get our people and our NHS the medicines they need. It is also important for our pharmaceutical sector, about which my right hon. Friend the Prime Minister has observed that it is hard to think of an industry of greater strategic importance to Britain and that does so much to improve the lives of patients around the world. Let me explain further. The European medicines regulatory network partnership makes the process of accessing life-saving new medicines and moving medicines quick and easy. If we leave that partnership, the NHS would get ground-breaking new drugs like those for cancer, dementia and diabetes long after other parts of the world. That is because pharmaceutical companies will apply for licences in the much larger American, European and Asian markets before they come to the UK. It would also be harder to get the medicines we need when we need them. This is particularly worrying for time-critical drugs and equipment. For example, some of the trauma treatments used for victims of last year’s Manchester Arena bombing were stocked in Amsterdam; we got them straight away because there were no borders or checks. After Brexit we could, in effect, create a hard border so this would not be so easy.

Photo of Antoinette Sandbach Antoinette Sandbach Conservative, Eddisbury 5:45 pm, 17th July 2018

AstraZeneca has a supply line of 4,000 people in the north-west. They assist in the manufacturing of a cancer drug that is exported to Europe. Without that export to Europe it would not be viable, because it helps 130,000 people across Europe. Does my hon. Friend agree that remaining in the European Medicines Agency would allow such frictionless trade to carry on?

Photo of Phillip Lee Phillip Lee Conservative, Bracknell

I do. A number of pharmaceutical companies have already made plans for no deal by taking warehouse space to import drugs in advance of 29 March so that patients do not go without their medications.

Photo of Sarah Wollaston Sarah Wollaston Chair, Health and Social Care Committee, Chair, Liaison Committee (Commons)

Evidence to the Health and Social Care Committee overwhelmingly showed the importance to patients of our maintaining close regulatory alignment not only here, but across the EU. Does my hon. Friend agree with the Committee that we must do more to publish the contingency planning and the consequences of not maintaining alignment so that the public can see this?

Photo of Phillip Lee Phillip Lee Conservative, Bracknell

I will be as brief as possible, Mr Speaker.

Yes, I do agree with my hon. Friend’s comments. Every month 45 million patient-packs of medicine go to the EU from the UK and 37 million packs move the other way. It is hard to think of a single other product that illustrates so well the importance of frictionless trade.

This amendment supports the Government’s intentions as explained in the Prime Minister’s Mansion House speech and their White Paper, but we must go further and enshrine them in law because of the very real impact on people’s lives, on the NHS’s ability to operate, on the industry, and on investment in the UK. That is why I will press this new clause to a vote.

I will also support new clause 18 this evening. Yesterday was the worst experience in politics I have had in eight years, and I am sorry that it has changed the dynamic. I started the week intending to support our Prime Minister in her deal and the White Paper. Yesterday changed that, and that is why I will be supporting other colleagues on these Benches when we come to new clause 18 this evening.

Photo of Gareth Snell Gareth Snell Labour/Co-operative, Stoke-on-Trent Central

I shall speak briefly on new clause 11 in my name and the names of 20 of my Co-operative party colleagues—the Co-operative party being the third largest party in this House, despite what some in here say.

New clause 11 simply asks the Secretary of State to make an assessment of slavery and servitude as part of any new trade deals. Modern slavery is a stain on society and we in this country are making great headway in tackling it through the Modern Slavery Act 2015, particularly sections 1 and 54, but, sadly, slavery is all too apparent in some parts of the world. Most people in this room will be wearing an item of clothing that has been made by a slave, and we should be using our international prowess and purchasing power to try to deliver a reduction in slavery and servitude.

Amendment 22, which was very kindly tabled by Jeremy Lefroy, supported by Steve Double, relates to trade remedies. The British Ceramic Confederation has worked very hard on this. I shall also be supporting amendment 80, because that will also help to protect our manufacturing base.

Photo of Kenneth Clarke Kenneth Clarke Father of the House of Commons

I shall be voting for new clauses 9, 17 and 18. I will not repeat the very eloquent arguments that have already been put forward by my hon. Friend Stephen Hammond, Dr Williams and my hon. Friend Dr Lee, who have put the case perfectly. I do not see any answer to it. The only question I wish to pose relates to my understanding that the Government are resisting these new clauses, which I find completely incomprehensible, particularly since yesterday. I personally cannot see why we are leaving the single market and the customs union, because that does not follow on from the referendum at all. However, I accept that staying in them has been ruled out and, in the spirit of getting a reasonably broad compromise, I am prepared to give the Government a chance to produce some other version that will preserve totally frictionless trade and no barriers to trade and investment with Europe, if they think that there is one. Therefore, I would not press new clauses 1 and 5 to a vote, and I do not think that my right hon. Friend Anna Soubry would do so. Let us give the White Paper a chance, which is what new clause 18 does. What I do not understand, given that the White Paper also supports keeping our present arrangements, if we can, by remaining within the European Medicines Agency, is why on earth these proposals are being resisted.

Yesterday, I was astonished that the Government used a three-line Whip to secure a majority for my hon. Friend Mr Rees-Mogg and his European Research Group faction, which they only just managed to do, by chance. The Government actually whipped my party to defeat their own policy, as set out in the White Paper. Today, we have amendments that are entirely consistent with the White Paper, but the Government are so terrified of the Daily Mail, The Daily Telegraph and the European Research Group that they are now applying the whip to try to defeat these measures. I really hope that they will go away for the summer and have a good rest—perhaps they should lie in a quiet, dark room at some stage—then come back and tell us exactly how they intend to negotiate these serious matters relating to the future of our country.

Several hon. Members:

rose—

Photo of Chris Leslie Chris Leslie Labour/Co-operative, Nottingham East

Surely new clause 17 is a no-brainer. If we are going to preserve anything, we must surely keep the frictionless flow of medicines and treatments for our national health service going. If ever there were an example of an ideology getting in the way of common sense, it would be that of a hard Brexit attitude physically placing itself at the border in the way of the free flow of those medicines. We know that 45 million packages of medicines cross that border every month. That is how essential this is, so new clause 17 has to be supported.

New clause 18 has been tabled by Stephen Hammond. I have to say to him that he is being incredibly generous to the Government in relation to this proposal. He is giving them the benefit of the doubt on the free trade area in goods. It is true that, whatever we get, the lowest common denominator will be a free trade area in goods. We will have to get that. But frankly, I am really quite surprised by the way in which some Conservative Members have been treated by the Government in respect of the ERG amendments—all of which were accepted without any objection—when some of them are trying their best to preserve the Prime Minister’s Chequers plan. Those Conservative Members are being very generous, but I think it is reasonable to put in place a safety net in the form of a customs union in January. I hope that, on this one occasion, we can put party politicking to one side and do the right thing for our country.

Photo of John Redwood John Redwood Conservative, Wokingham

Every day, a large number of components come into our country from outside the EU and they meet the deadlines of the just-in-time systems, as do the components from the EU. My hon. Friend Stephen Hammond should understand that you cannot send a car out with only 79% of its components assembled because they are the ones that came from the EU. Manufacturers send their cars out with 100% of their components, including the non-EU ones, which are coming in perfectly well. More than half our trade is done with non-EU countries that are not part of the single market or the customs union. We have already thought about the need to get rid of frictions on the borders for non-EU trade. We have worked internationally through the WTO which, through its trade facilitation agreement, has several instructions for us and for the EU to ensure that there is a minimum of friction at the border for non-EU, non-customs-union trade as well, which is why our manufacturers can work with it.

EU trade is not without administration and bureaucracy. The Intrastat declaration must be made, the commodity code must be identified, the VAT has to be settled and the excise must be settled if necessary. Those things are not done at the border. The lorry drivers do not have to stand in a queue while trying to work things out. When we are outside the EU’s customs union, the situation will be the same for everything else that does not come in within the customs union framework. This is the modern world. It is electronic. There are computers. There is the off-site settlement of taxes and of customs. The WTO knows about that.

The future for us will be great, but we must be free to have our own international trade policy and our own agreements with countries other than those in the EU. We must have the ability to set out our laws and spend our own money. The British public would expect no less of this Parliament, and they will not accept any higgling of their decision to leave the EU.

Photo of Emma Reynolds Emma Reynolds Labour, Wolverhampton North East

If the customs union is not important, why have BMW, Jaguar Land Rover and Airbus suggested that they need to keep the current border arrangements. If we are to preserve just-in-time manufacturing in this country—Jaguar Land Rover is on the outskirts of my constituency—we must either have a customs union or find an equivalent, as suggested by Stephen Hammond, who is being patient with the Government. The suggestion from some Members, as we have just heard, that the customs union or an equivalent is not important flies in the face of the evidence and what businesses up and down the country are telling us.

Photo of Nicky Morgan Nicky Morgan Chair, Treasury Committee

I will necessarily keep my remarks extremely brief. I cannot match the magnificence of my right hon. Friend Anna Soubry when she spoke yesterday, but let me say the following to the Chamber. Brexit is a matter of national interest. It is time to put party politics aside, which is why I welcome the fact that Labour Members are open to supporting the Chequers proposals, as captured in new clause 18, which I rise to support. I hear what Judith Cummins said about her scepticism regarding whether the proposals could work, but the Prime Minister did the right thing in the national interest by putting on the table a workable, practical proposal, captured at Chequers, that could be negotiated with the EU.

Photo of Nicky Morgan Nicky Morgan Chair, Treasury Committee

No. Some Government Members chose to try to scupper that agreement and those proposals yesterday. Some of us tried to stop that; but sadly, we failed. What is proposed in new clause 18—I am delighted to join my hon. Friend Stephen Hammond in proposing it—is eminently sensible. We want to give the Prime Minister space for the negotiations, and it is clear that there is a majority in this House for a customs union to safeguard business, jobs and our constituents’ future financial security. I hope that the House will have the opportunity to demonstrate that shortly.

Photo of Angus MacNeil Angus MacNeil Chair, International Trade Committee

The majority of the world’s countries are in a customs union. We need to be in a customs union and, I would argue, the single market. The damage that will result from not being in those two things and instead having a free trade, or less trade, agreement with the EU will be 6% of GDP. The panacea often offered is the United States of America, but the US will counter that drop to the tune of 0.2%. To make up for the damage that will be done by not being in the customs union and the single market, we need 30 US-style agreements. The US has a population of about 300 million, and a deal with it will yield a 0.2% gain in GDP. By that arithmetic, we need to make US-style agreements with about 9 billion people, but there is one problem for the Brexiteers: the population of the world is only about 7.4 billion. They should be listening to their friends and colleagues and making absolutely sure that they are not playing fast and loose with jobs, security, employment and with the life chances of people in the UK, young and old. It is a pity for me that Scotland is hitched to this lot at the moment.

Photo of Greg Hands Greg Hands Conservative, Chelsea and Fulham

There are three or four very strong arguments not to be in a customs union as outlined in new clause 18. First, being in a customs union puts massive restrictions on having an independent trade policy. Trade agreements are all about WTO schedules, and if we are in a customs union, we cannot have our own WTO schedules. Secondly, who would run trade remedies in such a position? Would trade remedies be run in London or would they be run in Brussels, and in whose interest? With British jobs and British companies on the line, it is incredibly important that we have the ability to run trade remedies.

Thirdly, on the subject of trade preferences, we want to do better for the developing world. Being in a customs union would prevent that. Finally—

Debate interrupted (Programme Order, this day).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the schedule be read a Second time.

Question agreed to.

New schedule 1 accordingly read a Second time, and added to the Bill.

Clause 5