Amendment 81

Part of Trade Bill - Committee (6th Day) – in the House of Lords at 3:00 pm on 15th October 2020.

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Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy 3:00 pm, 15th October 2020

My Lords, we have had a most interesting debate on this group of amendments, particularly touching on many aspects of corporate governance. To put my cards on the table, I am a fervent believer that good corporate governance leads to good decisions. Noble Lords were absolutely right to make their comments about the importance of governance.

I thank the noble Lords, Lord Bassam of Brighton and Lord Rooker, and the noble Baroness, Lady Bennett of Manor Castle, for tabling Amendment 81, and the noble Lord, Lord Stevenson of Balmacara, for moving it. Noble Lords may be interested to hear that, technically, the only member of the Board of Trade is its president, the Trade Secretary, as it is a requirement that, to be a member, you must be a privy counsellor. The Board of Trade is one of our most historic boards, which is why, as noble Lords can imagine, it was set up that way. My noble friend Lady Noakes was quite right about this, as was my noble friend Lord Trenchard, who added his normal wisdom to our debate.

The Board of Trade advisers are just that: advisers. They are not board members. We brought together experts from business, academia and government, who we hope will use their expertise and influence to help Britain make a stronger case for free trade on the international stage and to encourage more businesses across the UK regions and nations to boost their international trade. They are not policymakers, as such; the board and its advisers take a collaborative approach, focused on promoting the UK regions as destinations to trade and do business with.

The selection process for all advisers is the same: they are first shortlisted by the president of the board; departmental officials then conduct due diligence, in accordance with guidance from the propriety and ethics team at the Cabinet Office. Throughout this, principles are followed that are consistent with those underpinning the Governance Code on Public Appointments, to provide advice on the suitability of appointments. As they are direct appointments, the Secretary of State considers the advice provided and, following No. 10 approval, has the final decision on whether or not to appoint. The board’s sole function is to provide expert and apolitical advice to the department. As such, the role of adviser to the board does not carry with it the responsibility to make decisions, hold senior staff to account or have any role in striking trade deals while representing the UK overseas.

I listened carefully to the comments made by the noble Baroness, Lady Bennett, and the noble Lord, Lord Wigley, about Mr Tony Abbott. As the PM has made clear, the Government do not agree with all of Tony Abbott’s views; nor do his views reflect the views of the Government. As with all advisers, he has been appointed because of his expertise in trade matters.

I thank again the noble Baroness, Lady Kramer, for her kind words about my small role in public appointments and for explaining the need for all public appointments to be made with integrity. Cronyism must have no place in our public appointment system.

Amendment 83, tabled by the noble Lord, Lord Stevenson, relates to the trade advisory groups established by my department. The trade advisory groups will engage with businesses across the whole of the UK to access the strategic and technical expertise necessary to progress our trade negotiations with new partners across the globe. They have a very wide membership, embracing exactly the types of organisations referred to by my noble friend Lady McIntosh. The names of all members and their affiliations can be found on GOV.UK.

Trade advisory groups are just one part of the Government’s external engagement on international trade. We of course recognise the very important position that civil society organisations, such as trade unions, occupy in our society, particularly the unique insight that they can offer on important issues. I confirm that we are deepening our engagement with trade unions in relation to trade matters and we will announce more details of that in due course.

I have heard the concerns over confidentiality, and I reassure the House that we intend to share sensitive information only where it is relevant to current negotiations and where the trade advisory groups are best positioned to provide advice and expertise. This is information which must of course be protected, because if such information were to be released it may compromise our negotiations with key partners.

It would have belittled the role of the members of the trade advisory groups if they had not been able to have insights into these confidential matters and to offer their advice in relation to them. Consequently, as a sensible precaution, signing a confidentiality agreement will be a prerequisite to membership of the trade advisory groups. These are in no way gagging orders, but a sensible response to the need to allow members to have access to the information. I agree with the noble Lord, Lord Stevenson, that seven years seems a long period at first blush, but I am assured that such a period of time is customary for agreements of this sort.

I turn to Amendments 106 and 107 on the TRA board, in the names of the noble Lord, Lord Stevenson of Balmacara, and my noble friend Lady McIntosh of Pickering. Amendment 106 seeks to require the appointment of board members from specific interest groups and from each of the devolved Administrations. We conducted a wide process for recruiting members of this board and I am pleased to say that applications for the TRA non-executive positions have been received from a wide variety of backgrounds and from across the UK. Consideration of a breadth of experience has been an integral part of the selection process to date, and we are confident that we will be able to appoint a knowledgeable and strong board. Once that process is completed and noble Lords see exactly who the members are, they will endorse that approach.

We have set out our concerns previously that having board members who are beholden to—or perceived to be beholden to—any particular interest group would undermine the independence of the TRA and the core principles of impartiality and objectivity that underpin our new trade remedies framework. This framework has to be impartial and objective. I listened carefully to the expert views of the noble Baroness, Lady Bowles of Berkhamsted, on this matter and her broad agreement with this approach. I also thank my noble friend Lady Noakes for her endorsement of this. If I may, I will write to the noble Baroness, Lady Bowles of Berkhamsted, to answer some of the other detailed points that she made on this topic.

Amendment 107 would require non-executive members of the board to be approved by the International Trade Committee of the other place and also require the Secretary of State to consult the TRA chair on their appointment. I point out that Schedule 4 already requires the Secretary of State to consult with the chair before appointing non-executive board members. Giving a parliamentary committee a veto over non-executive appointments would be unprecedented. Decisions on public appointments are made by Ministers, who are accountable to Parliament and the public for the appointments that they make.

Amendment 108, in the names of the noble Lord, Lord Bassam of Brighton, and my noble friend Lady McIntosh of Pickering, looks to fix in statute the tenure of non-executives appointed to the TRA board. The Governance Code on Public Appointments states that it is usual for Ministers to decide on length of tenure and that no individual should serve more than two terms, or more than 10 years in any post. For the TRA board to function effectively, the resilience and memories of the board will need to be protected, which may require a managed turnover of members both now and in the future. Speaking as someone who has chaired many boards, you certainly do not want all members to leave at the same time. Appointing some of the initial board members for less than five years and staggering the process is a sensible mechanism to ensure that not all tenures end together.

Amendment 109, from the noble Baroness, Lady Kramer, aims to allow the TRA to establish advisory committees comprising stakeholders that include representatives of the devolved nations, the Trades Union Congress, and businesses and consumers. The Government agree that the TRA should have this ability, and I am pleased to tell the noble Baroness that Schedule 4 already allows the TRA to establish a committee including persons who are not members or employees. I am sure that the TRA will want to take heed of the comments made by noble Lords today, including those made by the noble Baroness.

The noble Baroness also tabled Amendment 110 to ensure that the costs of transferring staff to the TRA are adequately provided for. I can give the noble Baroness, Lady Bowles of Berkhamsted, complete reassurance about this. Again, this is already covered by the Bill’s provisions.

Amendment 111, the next amendment in the name of the noble Baroness, Lady Kramer, specifies that performance of the TRA’s activities must be included in its annual report, alongside the performance of its functions. Again, we share the noble Baroness’s ambitions in this area, and Schedule 4 requires the TRA to produce an annual report to be laid in Parliament. This report will include detailed information about the TRA’s performance, governance and use of resources, as well as details of the work it undertakes each year. I can assure the noble Baroness, Lady Bowles, and other noble Lords that this report will find its way punctually to Parliament, even if that is via the Secretary of State. Any activities the TRA carries out will be in the course of performing its statutory functions, and they will therefore be included in the annual report. It will be a comprehensive document.

Amendment 112, also in the name of the noble Baroness, Lady Kramer, would require the TRA to publish in its annual report details of how the economic interest test has been applied, focusing specifically on the impacts on affected industries and how such impacts affect jobs. I can reassure the noble Baroness that details of the economic interest test will be published in the statement of essential facts for each recommendation made by the TRA when a case is concluded, so there is no need to publish this information and duplicate it in the annual report.

I turn finally to Amendment 113, in the name of my noble friend Lord Lansley, which would require the TRA and the Secretary of State to publicly share the fact that the Secretary of State has made a request for information in connection with a matter listed in Clause 6(1), together with the date and purpose. Of course, while I recognise this was not my noble friend’s intent, requiring the TRA to disclose the fact and the timing of assistance it provides to the Secretary of State could have unhelpful consequences. For example, it may well highlight preparations for a dispute against another country, which may be politically sensitive information.

I hope I have reassured noble Lords about the TRA and the trade remedies system, which are designed to have transparency at their core and to provide independent, expert advice to the Secretary of State, and that on that basis they will therefore agree not to press their amendments.