Amendment 27

Trade Bill - Report (3rd Day) – in the House of Lords at 6:30 pm on 6th January 2021.

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Baroness Kramer:

Moved by Baroness Kramer

27: Clause 6, page 4, line 16, at end insert—“( ) In order to provide the Secretary of State with the advice, support and assistance under subsection (1), the TRA must within six months of its establishment publish a strategy for its engagement with stakeholders, including, but not limited to—(a) representatives of climate change and environmental groups,(b) businesses,(c) small businesses,(d) trades unions,(e) consumers, and(f) each of the devolved administrations.”

Photo of Baroness Kramer Baroness Kramer Liberal Democrat Lords Spokesperson (Treasury and Economy)

There are many issues to cover this evening. I am moving Amendment 27, in my name and those of my noble friend Lord Purvis of Tweed and the noble Baroness, Lady Bennett of Manor Castle, which is designed to ensure that the TRA engages with and listens to a wide range of concerned stakeholders as it does its work and does not disappear into its own bubble. Appointing representatives of stakeholder groups to the TRA does not achieve the purpose of wide engagement—I wish it did—but the responsibilities of TRA members prevent them from advocating even in areas where they are specialists. The role of TRA members is to assess the procedures followed by the TRA against its rules and mandate. I have no objection to the appointment of the diverse and widely experienced range of members to the TRA as proposed in Amendments 47 and 48, but it will be an unsatisfactory body if it does not hear from a wide range of voices as it seeks to make its determinations.

Amendment 27 would require the TRA both to develop an engagement strategy and publish it. I drafted a suggested list of stakeholders with which the TRA must engage but the list is deliberately not limited. It would make sure, for example, that small businesses, unions and consumers were heard but also climate change and environmental groups, all of whom will contribute to the TRA’s understanding of the implications of its decisions, and those decisions will genuinely matter. I beg to move.

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade)

My Lords, I apologise to the House; clearly the message that I had scratched from this group has not got through. I reflected on the fact that three Liberal speakers on this group would spoil the House too much, so I have nothing to add after the very able way in which my noble friend moved this amendment.

Photo of Baroness Bennett of Manor Castle Baroness Bennett of Manor Castle Green

My Lords, it is a pleasure to follow the very humble noble Lord, Lord Purvis of Tweed, and the noble Baroness, Lady Kramer. I shall speak to Amendment 27, which stands in their names and to which I have added mine. I shall also speak to Amendment 47, in the name of the noble Lord, Lord Bassam of Brighton, to which I have attached my name, and to Amendment 48, which I think might best be described as a friendly amendment to Amendment 47, as it makes just a small addition to it.

As the noble Baroness, Lady Kramer, said in introducing this group, these amendments very much fit together. Amendment 27 refers to the fact that the TRA should listen to a wide range of representative groups. That very much relates to the debate on the preceding group, where the noble Baroness, Lady Boycott, and many others made a powerful case for the importance of food standards and labelling standards. If consumers were listened to by the TRA, it would certainly be very helpful. As we are in a climate emergency and a nature crisis, we need to make sure that expert voices from that area are listened to as well. It is something that perhaps we do not always see traditionally as part of trade, but it is becoming very obvious that it is a crucial part of the whole issue.

On Amendments 47 and 48 in particular, we know that we have a huge problem with the bodies or organisations that are appointed, particularly by Westminster, being representative of all parts of the country in terms of region, background, knowledge and skills. As has just been highlighted by the appointment of the new chair of the BBC, it would seem that, under this Government, there are very few positions in UK society that a long career in the financial sector does not qualify you for. Crucially, we need our government institutions and bodies to be far more representative of our society as a whole. That means including different voices, genders, backgrounds, regions, educational backgrounds, et cetera. These three amendments taken as a package are a modest but important attempt to ensure that, when we formulate and make decisions about trade policy, a range of voices is heard.

Photo of Baroness McIntosh of Pickering Baroness McIntosh of Pickering Conservative

I am delighted to follow the noble Baroness, Lady Bennett. I shall speak to Amendments 28, 29 and 30, which are intended as probing amendments. I refer in passing to the report on the Trade Bill from the Select Committee on the Constitution, published in September of last year. The committee says at paragraph 11:

“We remain of the view that the Bill’s skeletal approach to empowering the Trade Remedies Authority is inappropriate.”

It goes on to say at paragraph 12:

“We recognise that there continue to be significant uncertainties regarding the UK’s trading relationships at the end of the Brexit transition period”,

which of course has now passed, and it concludes:

“However, it is not clear why, more than two years after the previous version of the Bill was introduced, the functions and powers of the Trade Remedies Authority cannot be set out in more detail in this Bill.”

Therefore, I gently nudge my noble friend the Minister to say, when he responds to Amendments 28, 29 and 30, what the intention behind the original Clause 6 was.

With Amendments 28 and 29, I seek in particular to focus on understanding better what limits might be appropriate to a request to the Trade Remedies Authority to provide advice on matters of international trade, and, with Amendment 30, to clarify the purpose of the initial consultation before proceeding to a request. At this stage, I should say that I am most grateful to the Law Society of Scotland for its assistance in briefing me and preparing these amendments.

With regard to Amendment 30, it is not immediately clear from the legislation why the Secretary of State would consult the Trade Remedies Authority under Clause 6(3) and how this is different from issuing the original request under subsection (1). I might be missing something but, if you are issuing a request, that seems a little odd. I am grateful to the Law Society of Scotland for raising this with me and, in turn, for the House this afternoon. Surely, if you make a request to the Trade Remedies Authority, you do not need to consult the authority beforehand on the nature of that request.

Can my noble friend clarify whether there is any distinction between the two actions, making it clear that the duty to consult in Clause 6(3) relates to framing or scoping a request to the Trade Remedies Authority, just so we can understand why it is appropriate to shape that request when, in fact, the Trade Remedies Authority is meant to be independent and impartial? By going through this process of consultation, I am slightly concerned that that impartiality and independence may be impugned or compromised.

Amendments 28 and 29 point to the fact that the Trade Remedies Authority has already existed, and exists in abstract, having been incorporated by reference in the Taxation (Cross-border Trade) Act 2018, although we are formally constituting it in the Trade Bill before us today. If it is the case that the Trade Remedies Authority is responsible for carrying out investigations and advising on remedies as set up under the cross-border trade Act, while it is an essential aspect of international trade, it is only one part of that. The proposed amendment therefore would ensure that requests for advice are limited to matters on which the Trade Remedies Authority is competent to advise, having regard to its remit and functions.

The purpose of this group of three amendments is simply to explore a better understanding from my noble friend and the Government through the department as to what the remit of the TRA should be and to ensure that the independence and impartiality of that body will not be infringed through the present drafting of Clause 6(3).

Photo of Lord Lansley Lord Lansley Conservative

My Lords, I am grateful for the opportunity to contribute to this debate. The amendments in this group all relate to the composition, functions and approach taken by the Trade Remedies Authority. I am very glad to follow my noble friend Lady McIntosh of Pickering. She rightly referred to the powers and approach set out in the Taxation (Cross-border Trade) Act 2018. I have to say equally gently that that is the answer to the points made by the Constitution Committee of this House—that they do not need to be set out in this legislation, because, way back when we first started considering the previous Trade Bill, as the noble Lord, Lord Purvis of Tweed, and I fondly remember, it was introduced at almost exactly the same time as the Taxation (Cross-border Trade) Bill. They were intended to proceed in parallel and are now entirely separate.

To some extent, that also gives a further reason why we should briefly consider at this stage the Trade Remedies Authority’s understanding that it has, in the form of the trade remedies investigation directorate of the Department for International Trade, been up and running, working on the transition review from the European Union and making recommendations relating to the imposition of countervailing, anti-dumping or safeguarding duties inherited from the European Commission. To that extent, we seek to influence not something new but something that has an ongoing role.

In this debate, I want to raise several issues. I hope that my noble friend on the Front Bench will not regard it as necessary to elaborate on all these issues now. If he wishes to write later, that is absolutely fine, but I do want to make one or two points.

First, there has been some concern that the delays to this legislation and its predecessor have disrupted the processes of establishing the Trade Remedies Authority and staffing it as we would have wished, leading to staff turnover. I hope that my noble friend will be able to say that we are now getting much greater stability in staffing. The leadership for the authority is now established. I have the utmost respect for the chair designate and chief executive designate, both of whom will be known to Members of this House—Simon Walker, the former head of the Institute of Directors, and Oliver Griffiths, who was trade negotiator on the UK-US negotiations in recent months. I express particular thanks to Satjit Singh, whom I remember from his health responsibilities, who has stood in as interim chief executive of the Trade Remedies Investigation Directorate in recent months. That has helped us to get to a good place. I hope that the fact that the chair designate was formerly the lead non-executive director of the Department for International Trade, and that the chief executive designate was formerly a very senior official in the department, does not undermine the independence of the Trade Remedies Authority. If we set out for it to be independent, it should be so and I hope that that will be demonstrated by the manner in which it goes about its task.

I want to make one point about engagement. It is important to understand the nature of the functions that the TRA is pursuing. With reference to the list of the TRA’s stakeholders in the amendment, the importance of industry bodies, trade associations and trade unions in identifying the interests of UK producers in a particular sector is central and cannot be overestimated. For example, there is a requirement that a complaint needs to be brought by 25% of UK producers and not be opposed by others. The fact that a trade association is bringing such a complaint must often be of the essence. A central aspect of the Trade Remedies Authority’s engagement must be with trade associations and trade unions—in relation to the workforces of those sectors—and that is not reflected in the purpose of these amendments.

That said, these amendments have helped identify some important issues. I hope that the Minister will not mind that I raised slightly wider issues, but these amendments are not necessary in order to give effect to a well-functioning TRA.

Photo of Baroness Bowles of Berkhamsted Baroness Bowles of Berkhamsted Liberal Democrat 6:45 pm, 6th January 2021

My Lords, there was some good debate on the TRA in Committee, and the amendments in this group largely follow up on those themes, about which there was quite a lot of agreement. The disagreement was about whether or not they should be included in the Bill. I will speak mainly in support of Amendment 27, which my noble friend Lady Kramer has already explained. I want to add more background to why it is proper to put a little more on the face of the Bill when a regulator is created.

We have a lot of independent regulatory bodies in the UK. We will have even more, such as the TRA, following Brexit. They become part of the system of unelected power. That system has its strengths and weaknesses. We seem to have been broadly free of corruption, but maybe we have had our fair share of ineptitude. Whatever the rights and wrongs of the system, there is really only one opportunity for Parliament to intervene in the objectives and formulation of the regulator in a way that is seen as benign and away from incidents, rather than threatening it or treading on its powers, as it may see it. That time is when it is being set up, as the TRA is now. If I recall correctly, the Minister, the noble Lord, Lord Grimstone, said that the TRA will have heard Parliament’s views and could take account of them. It is true that the TRA, once formed, may take note, especially if the Minister is supportive, despite wanting to keep amendments down.

However, in reality, reliance on kind words in debate is not enough, especially ones lost in the mists of time. The Government may get another go, whether through policy messages of a formal nature or otherwise, or through statutory instruments, which we all know that Parliament has no power to change. For Parliament, once the Bill is passed, it is down to how far Select Committees will manage to harangue a regulator when it goes wrong or to how many Members pose Parliamentary Questions and cause enough publicity and aggravation to force a review, usually after a dramatic failure. I have trodden that path, but how much better it would be to accept the benign influence of a few more words in legislation at the outset, so that slippages are prevented or can be reminded about and caught sooner. Maybe there will be some constructive sessions with Select Committees and regulators will say “I will take that idea back” but, in my experience with financial services regulators and the FRC, that rarely leads anywhere.

As has been pointed out, the TRA has some well-defined functions stemming from WTO rules already in legislation, but there is wriggle room left around the economic impact assessment and it is all happening at a time of great sensitivity. Although I acknowledge that the department is doing a good job in its current work and preparation for the TRA, there would be comfort for the future in having something in the Bill to remind it about engagement with stakeholders.

The other amendments in this group also have merit. Amendments from the noble Baroness, Lady McIntosh of Pickering, concerning the scope of advice, raise in my mind the question of whether the Government might at any stage wish to consult the TRA about state aid subsidies. What co-operation might there be between the CMA or other state aid control bodies given that the TRA has the other side of it? In a similar vein, I wonder whether the TRA will have the role of investigating infringement of state aid by the EU under the trade and co-operation agreement, as well as under WTO rules.

My plea to the Minister is that he put something on the face of the Bill so that there is at least something to point to concerning stakeholders.

Photo of Baroness Noakes Baroness Noakes Conservative

My Lords, I shall speak only to Amendment 27 in this group. I do not support it, mainly because I believe it is not necessary to tell a public body how to do its job. The TRA will be set up with a chief executive, staff and a board which will have a majority of non-executive directors and a chairman. It is being set up in a perfectly conventional way, which should allow it to ensure that it operates effectively.

A public body—or indeed any kind of body—does not need to be told to draw up a stakeholder engagement strategy. I also find it slightly bizarre that the amendment focuses on an engagement strategy. There will be far more important aspects of the TRA’s work—for example, on the kinds of information it seeks and the kind of analysis it carries out—but no strategy seems to be required for those. I also find no merit in the requirement to publish a strategy; I fail to see how that would add to the effectiveness of the TRA in providing advice.

Even if we need to specify that there must be an engagement strategy, it is quite unnecessary to specify a list of stakeholders with whom engagement must take place. I must say that the relevance of some in the list in this amendment is not entirely obvious. It seems to me that those proposing this amendment have forgotten that the TRA will focus on the kinds of things set out in Clause 6(3). It is a body focused on trade and traders, not on solving the problems of the world which are of interest to lobby groups.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Shadow Spokesperson (Further & Higher Education), Shadow Spokesperson (Digital, Culture, Media and Sport) (Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy and International Trade)

My Lords, now that the Brexit transition period has ended, the creation of the Trade Remedies Authority is obviously both necessary and very welcome. It should allow the UK to protect domestic industries, investigate allegations of unfair practices by overseas competitors and seek their resolution via the WTO’s dispute settlement mechanism. We must have a Trade Remedies Authority that has a broad membership from sectors and regions across the UK, conducts meaningful stakeholder engagement and, of course, is independent from the Government.

I do not buy the argument from the noble Baroness, Lady Noakes, that it is not the business of Parliament to give some guidance or ideas as to who those meaningful stakeholders might be in ensuring that we get this right. Only then, I argue, will it be transparent and fair when investigating and challenging practices that distort competition against UK producers. But the Bill appears not to secure this, as reflected by my Amendment 47 and the other amendments in this group, which are in their own way entirely benign. It is worth reminding ourselves that the Lords Constitution Committee said that it was not clear why the functions and powers of the Trade Remedies Authority could not be set out in more detail in this Bill. We cannot have an unbalanced TRA that simply supports the priorities and approach of this Government, or indeed any Government. We need a functioning TRA and a functioning trade remedies system, but its functioning will be undermined if there is no independence.

Amendment 47 is simple. It allows the Secretary of State to ensure that members of the TRA should have the

“skills, knowledge or experience relating to producers, trade unions, consumers and devolved administrations in different parts of the United Kingdom.”

The amendment clearly seeks to guarantee an appropriate balance of views at the TRA, not in favour of any party or sector but for the benefit of all regions, nations and businesses. In particular, I argue that we need trade union representation in the TRA. The TUC has said that, without it, there will be

“no guarantee provided that the non-executive members will represent the interests of workers in manufacturing sectors who will be severely affected by the dumping of cheap goods such as steel, tyres and ceramics.”

I hope that the Minister can explain in some detail how this balance can be achieved without the necessity of this and other amendments being in the Bill.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)

My Lords, there have been some succinct speeches in this debate and I shall keep my remarks relatively brief, but bearing in mind that there are six amendments to address.

Amendment 27 in the name of the noble Baroness, Lady Kramer, and the noble Lord, Lord Purvis, seeks to require the TRA to publish a strategy of its engagement with certain stakeholders within six months of its establishment. I am afraid that I agree with my noble friend Lady Noakes that we do not see merit in this, and I shall briefly explain why. The TRA’s processes are set out in legislation and limited by the scope of WTO agreements, including much of the basis of how it will engage with stakeholders in its investigations. UK producers will be able to bring complaints directly to the TRA through an innovative digital service which will underpin the process and make it easier for businesses to engage. I hope that I can provide further reassurance to the noble Baroness by outlining that we have engaged extensively with various stakeholders on establishing the TRA and encouraged them to build constructive relationships with the TRA itself, once established. I shall say more, particularly in relation to questions raised by my noble friend Lord Lansley, about progress on setting up the TRA in a moment.

I will move swiftly on to Amendments 28 and 29, in the name of my noble friend Lady McIntosh of Pickering, in relation to the TRA. These amendments would seek to narrow the limits of a request that the Secretary of State may make to the TRA for advice, support or assistance. We are committed to creating a world-class organisation staffed by a team of highly skilled international trade experts. The Secretary of State may require assistance from the TRA’s knowledgeable experts in certain circumstances to assist work carried out by government departments. There are some situations where the Secretary of State may need to request assistance from the TRA outside of trade remedy disputes arising under the WTO dispute settlement mechanism, including assistance in respect of provisions relating to trade remedies in regional trade agreements. In seeking assistance, however, the Secretary of State must have regard to the TRA’s independence, impartiality and expertise.

The provisions of Clause 6(1) specify the matters on which the TRA can provide advice, support or assistance when requested by the Secretary of State. They are limited to areas of international trade and relate to the TRA’s area of expertise. The provisions of Clause 6(2) set out the types of advice or assistance that the Secretary of State may request. While the list is not exhaustive, it is limited by subsection (1) to particular matters. If the TRA received a request that went beyond the matters set out in Clause 6(1), it would provide what assistance it could—but within the scope of this provision. The TRA will be a specialised body with expert understanding of trade remedies and international trade. It is unlikely that narrowing the limits of requests that the Secretary of State can make will do anything other than hinder the TRA’s ability to assist on these matters.

Amendment 30, also in the name of my noble friend Lady McIntosh, seeks to change the purpose of the initial consultation between the Secretary of State and the TRA before making a request. It is important that the initial consultation allows the TRA to provide the Secretary of State with a range of relevant information so that she can determine whether her request is appropriate.

I recognise that my noble friend is trying to ensure that the consultation process is clarified. However, restricting the consultation to a discussion of the scope of the request would limit the amount of information that could be requested about the impact of the request on the TRA. The Secretary of State must be able to make informed decisions based on the information that she receives from the TRA. This amendment would prevent the Secretary of State being obliged to seek during the consultation process information that pertained to the TRA’s expertise and independence, although she would still be required to have regard to these issues when making decisions based on the TRA’s assistance, under Clause 6(3)(b).

I will say a bit more about the questions asked by my noble friend Lady McIntosh, focussing mainly on why the department would need to request assistance from the TRA. My noble friend linked her questions to issues of independence and impartiality, which I quite understand. As she will know, the TRA will be an independent body staffed by trade remedies experts. There are a number of situations where the Secretary of State may need to request assistance. In relation to trade remedy disputes arising under the WTO dispute settlement mechanism, which I mentioned earlier, these may include, assistance in respect of bilateral or regional trade agreements, or assistance in relation to technical issues arising in appeals against decisions made by the Secretary of State following recommendations made by the TRA. For example, the UK may be involved in a dispute relating to an investigation carried out by the TRA. The Secretary of State would be responsible for defending the decision in this dispute but would understandably need to work closely with the TRA to do so effectively. I hope that that gives some assurance and answers to my noble friend.

Amendment 47, in the name of the noble Lord, Lord Bassam of Brighton, seeks to ensure that members of the TRA have a balance of skills, knowledge or experience relating to producers, trade unions, consumers and devolved Administrations. Amendment 48, in the name of the noble Baroness, Lady Bennett of Manor Castle, adds civil society to that list. Although the full process behind these amendments may appear laudable at first sight, the skills that board members can provide to address the issues facing the TRA must be the focus of any recruitment process, and limiting that process to reflect the interests of particular parties—a good few parties—would be counter- productive.

Furthermore, this amendment does not give a description of what an “appropriate balance” may mean for the membership of the TRA board. This would create considerable vagueness in terms of prescription and uncertainty for the Secretary of State when selecting members of the board. For example, would a gap in experience relating to producers mean that the board is unbalanced? What if there was only one member with experience of the production sector, but two with experience relating to consumers? I could go on. Does there need to be an equal number of members experienced in each area?

We believe that the addition of “civil society” to the list would create even more uncertainty. The term can have a broad range of meanings and it would be difficult to discern candidates with skills in such a loosely defined area. Identifying appointments who fall into this category, rather than that of consumers or trade unions, would be challenging, further complicating the process of striking balance across the board.

As I mentioned earlier, my noble friend Lord Lansley made a number of points. I may need to consult Hansard later and write to him, but I will have a stab at replying on the progress of the TRA. Good progress is being made. There are currently 100 staff in post and plans to increase this to 130 as the workload increases in parallel. I welcome the support of my noble friend Lord Lansley for the leadership of the TRA, particularly for the experience of the current chair and CEO-designate. I thank him for his comments.

We have had applicants from a wide range of backrounds and all areas of the UK, and I assure noble Lords that appointments are being made on merit. As I said earlier, being beholden to a narrow and ambiguous set of criteria to appease certain interest groups would be unhelpful and open to interpretation and misinterpretation. I hope that these explanations have reassured noble Lords and that the amendments can be withdrawn.

Photo of Baroness Kramer Baroness Kramer Liberal Democrat Lords Spokesperson (Treasury and Economy) 7:00 pm, 6th January 2021

I will be brief. I was disappointed by the speeches of the noble Viscount, Lord Younger, the noble Baroness, Lady Noakes, and the noble Lord, Lord Lansley. I heard that the TRA should engage with one stakeholder group only: producers. It was an outdated and out-of-touch view of the role of trade within the UK economy. If the Government pursue this path, it will be one to rue. I hope that the Government go away and think again, but I will not press Amendment 27. I thank all noble Lords who spoke in support of the very constructive amendments in this group.

Amendment 27 withdrawn.

Photo of Lord Lexden Lord Lexden Deputy Chairman of Committees, Deputy Speaker (Lords)

I apologise to the noble Baroness, Lady McIntosh. I did not receive note of her wish to intervene.

Amendments 28 to 30 not moved.