Trade Bill - Second Reading

Part of the debate – in the House of Lords at 6:40 pm on 11th September 2018.

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Photo of Baroness Falkner of Margravine Baroness Falkner of Margravine Chair, EU Financial Affairs Sub-Committee 6:40 pm, 11th September 2018

My Lords, I welcome the noble Baroness, Lady Meyer, to the House. As she knows from our personal interactions, and after her fabulous contribution today, she will find friends right across the Chamber. I have had chats with her since she arrived here but it was good to hear from her formally in the Chamber.

Turning to the forceful arguments advanced by the noble Lords, Lord Risby and Lord Tugendhat, regarding resources for the Foreign and Commonwealth Office as we go forward, I would go further and suggest to the Minister—whom I welcome to her first Bill—that she tells her colleagues that the logic of the UK’s future trade relations requires that we amalgamate the Foreign Office and the Department for International Trade, as the Australians and, indeed, the Canadians do. They have been doing this on their own for a very long time and they know how to do it.

The Minister will be pleased to hear that I broadly support the Bill and, given the generalities that she has heard around the Chamber today, that I will confine my remarks to the detail of the Bill itself. It is a wholly necessary piece of legislation to keep the show on the road as we prepare to leave the EU. Continuity will be fundamental to ensuring that we get the best for the British economy.

It is good that the Government improved the Bill in the Commons; for example, the change in the duration of sunset clauses, which the Minister mentioned in her opening remarks, and the reassurances of parliamentary scrutiny. I find the Bill in rather better shape than some others that have made their way to the Lords in recent times. However, the argument in the Commons that the Government should emulate the European Parliament’s powers in the provisions of the Bill is flawed, and they should resist those sorts of moves here if it comes to it. Although there are elements of the scrutiny of trade negotiations where the European Parliament does a very good job, there are others where it is effectively a sui generis institution: it reflects the weight and strength of national groups. For those of us observing TTIP, when we hoped that it would go through, it was evident that the trade preferences and political priorities of certain countries prevailed, while those of others did not. It was not a level playing field and some countries were disadvantaged by that. It was hardly a negotiation that delivered for all 28. Although the EP attempted to improve it, it seems just as well that it did not go forward in the way it was likely to.

Clause 3 concerns parliamentary scrutiny. I note the debates in the other place on enhancing scrutiny. I have similar aspirations for what we do with the Bill in this Chamber. I have no doubt that we will see debates along those lines and amendments of those sorts moved here and I look forward to debating them. But when it comes to parliamentary approval of the negotiating mandate, as well as the requirement for the Government to publish their negotiating text at the end of each round of negotiations, I urge against this level of micromanagement. In trade negotiations, both sides have red lines but these are not necessarily disclosed as they form part of the give and take of the negotiation itself. I cannot see how giving Parliament, in effect, control of the negotiation would lead to a more optimal result in that regard.

I welcome the improvements to parliamentary scrutiny in Clause 4 but it is not entirely clear to me why the clause was deemed necessary given the concessions made in Clauses 2 and 3. I know that the Minister is required to lay a report as soon as possible after the trade agreement is ratified to explain why it was not possible to do so before ratification but perhaps we might be given an indication of the cases that are so exceptional that ex post facto reports would be deemed necessary. This exceptional cases clause seems to slightly contradict the powers that the Minister has.

Turning to the Trade Remedies Authority, paragraph 2(2) of Schedule 4 restricts the total number of members of the authority to nine. This appears unduly restrictive. Perhaps the Minister will tell us why the Government have settled on a firm figure rather than having a range, such as nine to 12. One can foresee situations where, over time, in a complex, multisectoral, comprehensive future agreement taking several years, it might be helpful to expand the membership of the TRA to bring on board those with specific and particular skills, to build flexibility into the body’s governance. In paragraph 2(4) the Government are rather more flexible about how they define good governance. It states:

“The Secretary of State and the Chair must ensure, so far as practicable, that the number of non-executive members is at all times greater than the number of executive members”.

That seems rather too tentative. If the Trade Remedies Authority is to be accountable, as it should be, the number of non-executives should always exceed the number of executive members. I hope the Government will look again at that in Committee. If the restriction in paragraph 2(2) was resolved, it is likely that the issue in paragraph 2(4) of the balance between executive and non-executive members would conflict. I look forward to the Government’s response in that regard.

I will conclude on a general point. I see this as a necessary Bill to prepare the ground for Britain’s withdrawal from the EU. Here in the Lords we have a duty to improve it and I have no doubt that we will. The European Union (Withdrawal) Act is now behind us and we need to move forward to put in place machinery in government and Parliament to ensure continuity and build on the UK’s interests as an open, globally significant trading nation, building on a philosophy articulated by Adam Smith and David Ricardo more than 250 years ago. We know how to trade, we know how to make things that other people want, and we know how to work with others to make multilateral institutions fairer and more effective. I have no doubt that we will face significant challenges in the period immediately following our exit from EU arrangements, but I also remain open to new opportunities for trade with new partners—and, more importantly, in new sectors—as the global economy changes and evolves, as it is doing, with phenomenal speed. The challenge still awaits us but for now we need to get on with the Bill.