Trade Bill - Second Reading

Part of the debate – in the House of Lords at 6:56 pm on 11th September 2018.

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Photo of Baroness Henig Baroness Henig Deputy Chairman of Committees, Deputy Speaker (Lords) 6:56 pm, 11th September 2018

My Lords, first, I add my congratulations to our new colleague the noble Baroness, Lady Mayer, on her riveting maiden speech. I look forward to hearing her future contributions in this House.

I wish to speak to Part 1 of the Bill. We are repeatedly told by those keenest to pursue our departure from the EU that our ability to make our own future trade deals is one of the most significant opportunities that Brexit will bring us. Given the importance of the issue, it must therefore follow that they and the Government will welcome keen and effective scrutiny, and recognise that the collective experience of this House will be extremely useful in helping to illuminate and improve not just this Bill but, I hope, also our future trade policy. Unfortunately, I have to tell the House that in the two years since the formation of the Department for International Trade, we have heard virtually nothing about its priorities or policies. Recently, there has been a consultation on new bilateral trade negotiations with the United States, New Zealand and Australia, but we have not been told what the Government hope to achieve by prioritising these countries. We have seen Answers to Parliamentary Questions that provide little detail on either our proposed trade policy or on the progress of the talks that we are having to replicate the existing trade agreements covered by this Bill.

The avoidance of any real scrutiny of the UK’s trade negotiations reached new heights when Cabinet Minister Liam Fox appeared before the International Trade Select Committee in the other place on 11 July. In relation to ongoing UK negotiations at Geneva to re-establish independent WTO schedules, he told the committee that,

“negotiations are going quite well ... people do understand our position … Of course, the problem is not with the United Kingdom”,

by which he presumably meant to imply that the problem was with the EU. Two weeks later, when the UK’s schedules were formally submitted, correspondents in Geneva cited a number of countries which were in fact going to lodge objections to the existing treaties because, in the process of transfer, they wanted to change one or more provisions. That must surely have been known at the start of July but Parliament was not told. On this evidence, can we trust the Government to provide honest information to Parliament?

If we in Parliament cannot trust the Government, imagine what business and civil society will think. In the case of businesses, we are talking about changes to their access to other markets in potentially as little as six months’ time. All we have heard from Ministers is that discussions are progressing well and that no countries have raised objections. On the evidence of the information provided regarding WTO negotiations, there is no way that businesses can rely on such assurances. Surely we want our businesses to be as well briefed and prepared for the future as possible.

The Government should be equally concerned about the impact of secrecy on civil society. Four years ago I was a member of the EU sub-committee examining the EU-US trade agreement, TTIP. It caused considerable controversy, not least because people objected to its being negotiated in secret. In our final report we judged that,

“insofar as a public debate on the TTIP exists, EU member states are losing it”.

What lessons have the Government learned from that? Few in this House would wish to repeat the experience—say, for example, with a US-UK trade deal being negotiated behind closed doors, which potentially, through some of its food provisions or trade dispute resolution clauses, could render any other trade agreement toxic. This is indeed what nearly happened in the EU when TTIP nearly endangered the EU’s trade deal with Canada.

The Secretary of State has been making speeches about the need to support trade agreements, calling in aid on occasion the work of David Ricardo. With respect to Liam Fox, it has been aptly said that he should perhaps tell us more about how the UK will beat the challenges of the 21st century rather than those of the 19th. These 21st-century challenges are those of policy, trust and communication, and to date—and indeed in the Bill—I fear that the Government have comprehensively failed to meet them. On policy, we have yet to see the Government communicate in any way what objective they would like to achieve in future trade negotiations and agreements. This relates to the existing trade agreements as well as to those to be concluded in future.

We have heard many experts, and Members of the House today, say that UK manufactured goods may not be eligible for tariff preferences in these replicated trade deals because trading partners will not accept the continuation of existing rules of origin once the focus is the UK, not the whole EU. Can the Minister give us an update on the Government’s progress on this matter, given the importance of this issue to companies here and now? It is equally important to understand what the Government would like to protect. For example, we have a verbal promise that our food standards will not be changed, but as far as I can see there is nothing to stop the Trade Bill being used to make such changes. Would it not be reasonable for our farmers to have that commitment written in legislation?

That leads us on to the crucial question of trust. As I have already pointed out, the Government have not yet done enough to create a position where we can trust assurances that Ministers will lay meaningful reports before Parliament stating the difference between the trade agreement previously and the proposed new one. That is why I believe we will need to consider amendments in Committee to ensure effective scrutiny. For example, I suggest the Government might commit to the report being produced or audited independently, perhaps by a committee of this House or of the other place or by an arm’s-length body. This simply echoes the kind of best practice that exists at this moment across the EU, and I am sure we would not want to depart from such practice or to lower existing standards of scrutiny in relation to the negotiation of trade agreements. Good communication lies at the heart of trade policy. Ultimately, Parliament has to hold the Government to account on this. The Secretary of State’s commitment on 16 July to keep Parliament closely involved with regular ministerial Statements and updates is welcome but not in any way sufficient, either for us to provide scrutiny or to give reassurances to businesses and individuals who will seek details from us as to exactly how they are going to be affected.

It is crucial that the Government should commit to providing Parliament and indeed the devolved Administrations with an update of all the negotiations covered by the Bill on a regular basis, which is to say perhaps three times a year. I do not believe that that is too much to ask. It would ensure that we were able properly and effectively to provide scrutiny and add our expertise to the Government’s efforts. There are Members of this House who know very well that negotiations even to replicate agreements can be very difficult. There are Members who appreciate that agreements with the likes of Norway and Turkey, for example, will be difficult to replicate without the UK maintaining a close relationship with the EU. I would like the Government to acknowledge that. How will these agreements be dealt with, and how will the challenges they pose be overcome? I will not hold my breath while I wait for an answer, but this is precisely why we need to consider an amendment along these lines in Committee.

The Government are currently treating Parliament and, I fear, business and civil society as the enemy in trade policy, who should be given as little information as possible. This approach is dangerous and counterproductive. Businesses, federations, trade unions, pressure groups and individuals all need to know what is being negotiated on their behalf and they need to be able to contribute meaningfully to the process, as indeed the Minister said in her opening remarks. I absolutely agree with her that people need to be consulted and to know what is going on. I hope that in Committee we can look to facilitate that process. After all, taking back control has to apply to them and to Parliament, not just to the Government.

I believe we need to start to create some consensus around the sort of trade deals that we want to conclude in future. That is so important after everything that has been happening recently. If we fail to create consensus, we will surely face an uphill battle to create a country that is open to trade and exporting successfully.