Implementation of international trade agreements

Trade Bill – in a Public Bill Committee at 3:30 pm on 25 January 2018.

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Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade 3:30, 25 January 2018

I beg to move amendment 4, in clause 2, page 2, line 7, leave out “subsections (3) to (5)” and insert “subsections (2A) and (5).”

This is consequential upon Amendment 3.

With this, it will be convenient to discuss the following:

Amendment 3, in clause 2, page 2, line 12, at end insert—

“(2A) Regulations under subsection (1) to make provision for the purpose of implementing an international trade agreement may only be made if—

(a) the provisions of section [Parliamentary scrutiny of free trade agreements before signature] were complied with before the United Kingdom had ratified the agreement;

(b) the requirements under subsection (3) and under paragraph 2A of Schedule 2 have been met;

(c) the requirements under subsection (4) have been met; or

(d) the requirements under subparagraph 2(1A) of Schedule 2 have been met.”

This would expand Clause 2 to include international trade agreements that do not correspond to a prior or existing EU trade agreement. Sub-paragraph (d) would link to Amendment 20.

New clause 4—Parliamentary scrutiny of free trade agreements before signature—

“(1) The United Kingdom may not become a signatory to a free trade agreement which does not meet the criteria under section 2(3) unless—

(a) before entering negotiations on the proposed agreement, the Secretary of State has laid before Parliament a sustainability impact assessment carried out following consultation as prescribed by section [Sustainability impact assessments];

(b) both Houses of Parliament have passed a resolution authorising the Secretary of State to enter negotiations on the proposed agreement as prescribed by section [Parliamentary consent to launch of trade negotiations];

(c) during the course of negotiations, the text of the agreement as so far agreed or consolidated has been made available as prescribed by section [Availability of agreement texts];

(d) the Secretary of State has, within ten sitting days of the close of each round of negotiations on the proposed agreement, laid before Parliament a statement detailing the progress made in each area of the negotiations and the obstacles still remaining at the close of that round;

(e) the text of the agreement in the form to which it is proposed that the United Kingdom should become a signatory has been made available to Parliament for a period of 21 sitting days; and

(f) a resolution has been passed by the House of Commons approving the Secretary of State’s intention to sign the agreement.”

This would establish a procedure for parliamentary scrutiny before signature of free trade agreements that do not correspond to a prior or existing EU free trade agreement.

New clause 5—Sustainability impact assessments—

“(1) A sustainability impact assessment laid before Parliament under section [Parliamentary scrutiny of free trade agreements before signature](1)(a) shall be carried out following consultation.

(2) A consultation under subsection (1) shall—

(a) be carried out in line with any guidance or code of practice on consultations issued by Her Majesty’s Government, and

(b) actively seek the views of—

(i) Scottish Ministers,

(ii) Welsh Ministers,

(iii) a Northern Ireland devolved authority,

(iv) representatives of businesses and trade unions in sectors which, in the opinion of the Secretary of State, are likely to be affected by the proposed international trade agreement, and

(v) any other person or organisation which appears to the Secretary of State to be representative of interests affected by the proposed international trade agreement.

(3) The Secretary of State shall ensure that public bodies, non-governmental organisations and the public may be made aware of the consultation by circulating and publishing details of it prominently on relevant government websites.

(4) A sustainability impact assessment under subsection (1) shall be conducted by a credible body independent of government and shall include both qualitative and quantitative assessments of the potential impacts of the proposed trade agreement, including as a minimum—

(a) the economic impacts on individual sectors of the economy, including, but not restricted to—

(i) the impacts on the quantity and quality of employment,

(ii) the various regional impacts across the different parts of the UK,

(iii) the impacts on small and medium-sized enterprises, and

(iv) the impacts on vulnerable economic groups;

(b) the social impacts, including but not restricted to—

(i) the impacts on public services, wages, labour standards, social dialogue, health and safety at work, public health, food safety, social protection, consumer protection and information, and

(ii) the government’s duties under the Equality Act 2010;

(c) the impacts on human rights, including but not restricted to—

(i) workers’ rights,

(ii) women’s rights,

(iii) cultural rights and

(iv) all UK obligations under international human rights law;

(d) the impacts on the environment, including but not restricted to—

(i) the need to protect and preserve the oceans,

(ii) biodiversity,

(iii) the rural environment and air quality, and

(iv) the need to meet the UK’s international obligations to combat climate change;

(e) the impacts on animal welfare, including but not restricted to the impacts on animal welfare in food production, both as it relates to food produced in the UK and as it relates to food imported into the UK from other countries; and

(f) the economic, social, cultural, food security and environmental interests of those countries considered to be developing countries for the purposes of clause 10 of the Taxation (Cross-border Trade) Act 2018, as defined in Schedule 3 to that Act and as amended by regulations.

(5) The elements of the sustainability impact assessment to be undertaken under (4)(f) must be sufficiently disaggregated so as to capture the full range of impacts on different groups of developing countries, and must include both direct and indirect impacts, such as loss of market share through trade diversion or preference erosion.

(6) A sustainability impact assessment under subsection (1) shall include recommendations for possible action to maximise any positive impacts and to prevent or offset any negative impacts foreseen, including the possible limitation of the negotiating mandate so as to exclude those sectors most at risk from the proposed trade agreement.”

This would establish the process of consultation for, and the required content of, sustainability impact assessments for free trade agreements that do not correspond to a prior or existing EU free trade agreement.

New clause 6—Parliamentary consent to launch of trade negotiations—

“(1) The Secretary of State shall not commence negotiations relating to a free trade agreement which does not meet the criteria under section 2(3) unless all provisions of this section have been satisfied.

(2) A Minister of the Crown shall lay before Parliament a draft of a negotiating mandate relating to the proposed international trade agreement.

(3) The draft mandate under subsection (2) shall set out—

(a) all fields and sectors to be included in the proposed negotiations;

(b) the principles to underpin the proposed negotiations;

(c) any limits on the proposed negotiations, including sectors to be excluded from the proposed negotiations; and

(d) the desired outcomes from the proposed negotiations.

(4) No sooner than 21 sitting days after the draft of the negotiating mandate has been laid under subsection (2), the Secretary of State shall make a motion for a resolution in the House of Commons in respect of the draft, setting out the elements listed in subsection (3).

(5) A motion for a resolution under subsection (4) shall be made in such a way as to permit amendment of any of the elements prescribed under subsection (3).

(6) A motion to enable consideration of the negotiating mandate shall be laid before the House of Lords.

(7) The terms of any negotiating mandate authorised by a resolution under subsection (4) shall be binding upon the Secretary of State and anyone acting on his or her behalf in the course of negotiation.”

This would establish the procedure by which Parliament would agree a negotiating mandate for free trade agreements that do not correspond to a prior or existing EU free trade agreement.

New clause 7—Availability of agreement texts—

“(1) The text of any proposed international trade agreement which is being negotiated shall, so far as it is agreed or consolidated, be made publicly available within ten days of the close of each round of negotiations.

(2) Every—

(a) document submitted formally by the United Kingdom government to the negotiations, and

(b) agenda for each new round of negotiations

shall be made publicly available by the Secretary of State.

(3) All other documents relating to the negotiations and not falling within the descriptions provided in subsections (1) and (2) shall be made publicly available by the Secretary of State, subject to subsection (4).

(4) The Secretary of State may withhold from publication any document of a kind falling within the description in subsection (3) but must publish a statement of the reasons for doing so.

(5) In the case of any document withheld under subsection (4), the Secretary of State shall provide full and unfettered access to that document to—

(a) any select committee of either House of Parliament to which, in the opinion of the Secretary of State, the proposed agreement is relevant, and

(b) any other person or body which the Secretary of State may authorise.

(6) In the case of a document to which access is provided under subsection (5), the Secretary of State may specify conditions under which the text shall be made available.

(7) The Secretary of State shall maintain an online public register of all documents published under subsections (1), (2) and (3) or withheld under subsection (4).”

This would establish the procedure by which the agreed or consolidated texts of, and other documents relating to, international trade agreements would be made available during the process of negotiation.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

Earlier today, Members of the Committee may have tapped into their emails. If they are like me, they would have received 1,700 emails in less than 24 hours, because we are members of this Bill Committee.

The email was clearly a standard email. The subject heading was, “Amend the Trade Bill to protect democracy”, and it began, “Dear Trade Bill Committee Member…”, which is why I assume that most hon. Members in the Committee have received it. It has probably taken us all a great deal of time to sift through, perhaps from some of the child protection cases that have been brought before us and need urgent attention. That in itself is a concern. However, the fact that 1,700 people have emailed each one of us about this Bill shows the level of public concern that exists about its failings.

The Member’s explanatory statements make clear that these two amendments together have the effect of expanding the remit of clause 2, to include those international trade agreements that do not correspond to a prior or existing EU trade agreement. That means that they would have the effect of expanding the remit of the Bill itself, to include all the trade agreements that the UK will negotiate with its trading partners or, as we would see it, they would have the effect of restoring the Bill to its proper proportions.

On Second Reading, I mentioned that we believe the Bill to be highly negligent in restricting its focus only to those future UK international trade agreements where a corresponding EU trade agreement already exists. The Government repeatedly told us that the Bill would provide the basis for this country’s future trade policy once we had left the EU. The background notes to the Queen’s Speech of last June were unequivocal in stating:

“The Bill will put in place the essential and necessary legislative framework to allow the UK to operate its own independent trade policy upon exit from the European Union.”

Photo of Matt Western Matt Western Labour, Warwick and Leamington

Does my hon. Friend agree that this is a key piece of legislation? As he has been articulating, the amount of public interest in it—not just simply through the democratic process—shows that the public are seeking far greater scrutiny and visibility of the trading negotiations and legislation to be formulated and widened through the Bill. There is an expectation that it should be, and there is a void in the Bill. As was mentioned by the witness from the CBI, this is such an important opportunity and there is an expectation that scrutiny and consultation should be included.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

Yes, I absolutely concur with my hon. Friend. That is precisely what those of our constituents who wrote to us earlier today were getting at. The gentleman from the CBI who gave evidence only two days ago posed a very pertinent question to the Minister on two occasions—at the beginning and the very end of his remarks. He pointed out that the Minister and the Government have said repeatedly that they will bring forward legislation in the future to put in place what we now think should be here. They give no assurances of that though. What the CBI, supported by the International Chambers of Commerce, said was: if not now, then when?

The Minister is keen to suggest the importance of passing this Bill is that we are pressed for time, and we are. But if we are pressed for time on the need to have trade agreements that correspond to existing agreements in place by the time we leave the European Union, surely we are also pressed for time if we are to have, as the Government have suggested they could have on day one, new trade agreements in place ready to go. Where is the legislation to facilitate that? This should be that legislation and it is not.

By choosing to focus solely on providing continuity with pre-existing EU trade agreements, the Bill has gone back on the promise that the Government made in the Queen’s Speech, and in other places on other occasions. The opening words of the Bill identify its scope perfectly clearly:

“A Bill to make provision about the implementation of international trade agreements”.

My hon. Friend the Member for Sefton Central tried to elicit comment on that point from the witnesses this morning. The Bill bears no qualification to suggest that we should be focusing only on a subset of the broader whole. The issue before us is explicitly the implementation of the UK’s future international trade agreements, which is why we consider the two amendments to be essential to restoring the Bill to its correct proportions right from the outset.

It was highly revealing that several witnesses from the business community voiced their concern at the failure of the Bill to address so many essential aspects of our future trade policy, which are precisely the aspects on which their members desperately want clarity, so that they can start making the necessary investments and operational decisions on how to take on board the new realities. Was it not depressing to hear business leader after business leader in our witness sessions saying that, because there is not that clarity, businesses are now having to execute their plan B? They are being precipitated into taking decisions to make investments abroad in order to safeguard their trading future. That is not good for this country, yet in this Bill we could set out clearly how we will achieve that.

I was concerned and taken aback to hear how angry some businesses are about the Government’s mishandling of the whole process of informing them what the Bill is about and the Government’s abject failure to take on board any of the business community’s input into the official consultation. It came up time and again. It is hardly surprising when we consider that the Bill was already printed before the consultation on the White Paper informing it had run its course. The consultation closed on 6 November, and when we went into the Table Office on the morning of 7 November, copies of the Bill were available.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Spokesperson (Trade and Investment)

I absolutely agree with what the hon. Gentleman is saying. Does he share my concern that when it comes to involving businesses, trade bodies and organisations in trade agreements, the Government have huge lessons to learn from the mishandling of the process and the anger? The British Retail Consortium was absolutely infuriated by how the process had been done. Businesses, individuals and trade bodies had been asked to spend staff time, effort and money feeding into a consultation, but there was no space. As he said, the Bill was printed before the consultation had even finished. That is an appalling way to treat businesses and trade bodies, and an appalling way to govern.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

I absolutely agree. It was shameful. The Cabinet Office circulates principles of Government consultation that make it clear that, when they consult, they should take notice of the responses. Nobody can persuade me that between 12 midnight on 6 November last year and 8 o’clock the following morning, all the consultation responses had been sifted, considered, documented and incorporated into the ministerial view that emerged in the Bill as printed. That is not consultation.

In that regard, we should all commend the representative of the CBI who spoke to us and gave the understatement of the year in his answer to my question during the second witness session on the Government’s mishandling of the consultation process. When he ventured his verdict, he said after much thought and deliberation that

“the optics were not ideal.”––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 34, Q79.]

They really were not.

I confess that I was not prepared for the level of anger from business in our oral evidence sessions, as industry representatives lined up alongside trade unions, civil society, legislators and academics to announce—to denounce, actually—the Government’s failure on every aspect of this Bill.

Photo of Matt Western Matt Western Labour, Warwick and Leamington

Does my hon. Friend agree that it is not simply the failure to consult that has frustrated and angered so many in the business community? As we heard earlier, many businesses are so worried and uncertain about the future that they are having to take out extensive warehousing facilities. We have seen that across the southern part of the UK, where warehousing is now at a super-premium because they do not know what is happening, what is going on or what is around the corner. That is coming at a great cost to UK businesses.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade 3:45, 25 January 2018

Of course, my hon. Friend is absolutely right. As was stressed this morning in our latest evidence session, in what I think were the witness’s words, businesses say, “We want clarity.” At every turn, that is what the Government have denied them. We see the reports that businesses, industry and sectoral organisations are producing. We have read of the disconnect between the Administration and the business community. Many individuals have made the same point to me in private meetings, but it was quite remarkable to hear in this public forum just how deeply business feels betrayed as a result of the Government’s determination to do it their way and go it alone.

Government Ministers have promised, in the least convincing way, that the UK’s future trade agreements will remain to be talked about at some unspecified point in the future. I think the Scotch Whisky Association said that the “missing piece of the puzzle” was when that would happen. It was instructive to hear the evidence from the representative of the International Chamber of Commerce UK, who pointed out just how inadequate the Government’s commitments in that regard have been. He noted that the Government have given no indication of whether this mythical debate over our future trade policy will be a random chat, a formal consultation or a second piece of legislation. We do not know what it will be, and we do not know when—or if—it will be.

Given the Government’s record leading up to the publication of this Bill, it is small wonder that no one is prepared to give Ministers the benefit of the doubt. Since the consultation here was so bad, why should people trust that the Minister will do what he has suggested—I would not say promised—he will do? That is why we need to talk about the implementation of all the UK’s international trade agreements now, when we have the Trade Bill in front of us, not in some future world that the Secretary of State might imagine—

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

I will give way to the Minister if he can give a promise or commitment from the Government to this Committee, and a date by which such legislation will be introduced.

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade

I understand the thrust of the hon. Gentleman’s argument, but does he not agree that if we were to agree to these amendments and new clauses today, we would be effectively pre-empting the ongoing consultation on what Britain will do on future trade agreements? That is the key thing to understand. On future trade agreements, we would wish to consult further; passing these new clauses and amendments today would be cutting that process short.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

Mr Davies, I have long admired this Minister’s chutzpah. The chutzpah of somebody to say, “Although I, as the Government, have completely abrogated my responsibility to get this Bill right, and you the Opposition have decided to fulfil my role for me, to try to put it right and get the stuff in place, if we passed your amendments we would not have consulted on them”! What complete, spurious nonsense. Let us have a grown-up debate, because that is not one; it really is not. It trivialises the work of this Committee and the important work that Government must do in scrutinising our future framework for trade negotiations. Mr Davies, I will calm down and try to get back to the essence of what we are doing here.

Photo of Mark Prisk Mark Prisk Conservative, Hertford and Stortford

I will do my best, but he may not take that view when he calms down and the blood pressure starts to ebb. My understanding on Second Reading and in earlier debates was that the crux of Labour Members’ worries—on this Committee and in the House generally—was that the Bill’s problem is that it reaches far too wide. Why, then, propose amendments that extend its remit even further? Do the Opposition want a narrow or a wide Bill, and if it is too wide, why extend it?

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

A plausible case. Elements of the Bill go far too wide, including the Henry VIII powers, which we will come on to later. We believe that the way in which the Government have sought to use Henry VIII powers in this legislation is too wide and unacceptable. The hon. Gentleman is right: that was one of the subjects of debate in our Second Reading deliberations. One other key criticism made by many Labour Members in that debate was that the Bill not only did the few things that it did badly, but failed entirely to do the one thing that it should have done properly. That is, to quote the Queen’s Speech policy paper, to

“put in place the essential and necessary legislative framework to allow the UK to operate its own independent trade policy upon exit from the European Union.”

There are many deficiencies in the Bill. Some relate to the widening of powers that it gives to Government, whereas others relate to the narrowness of the Bill.

Photo of Matt Western Matt Western Labour, Warwick and Leamington

Are we not simply taking the opportunity to ensure that this important legislation is comprehensive? It is about widening the remit of the Bill as regards the coverage of trade agreements without widening the powers of a select few.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

I am very grateful to my hon. Friend for saying incisively what I was trying to convey to the hon. Member for Hertford and Stortford. My hon. Friend is entirely right. We want a comprehensive Bill that is fit for purpose and does the job that business expects it to do. This Bill does not do that. We want it to do what the Queen’s Speech promised it would, but we do not want the Government to use the Bill to abuse their powers and widen the powers available to them.

Let me speak first to amendment 3, so that what we seek to achieve through it is clear. The amendment expands the Bill through paragraphs (a) to (d) to include new trade agreements that do not correspond to any prior or existing EU agreement. Paragraph (a) relates to free trade agreements as defined in the Bill under clause 2(7): namely, agreements that are notifiable under the relevant articles of the principal WTO goods and services agreements—that is, article XXIV of the general agreement on tariffs and trade and article V of the general agreement on trade in services. Paragraph (d) relates to international trade agreements that the Bill leaves undefined as being

“other than a free trade agreement.”

Dr Lorand Bartels, a witness on the first day of the Committee, noted in his oral evidence the Bill’s failure to define that second category. We will certainly endeavour to address that failure through a subsequent amendment to the Bill. For both categories of trade agreement, our amendments point ahead to the requirements of parliamentary scrutiny that will pertain to them. Let me say at this juncture that we consider the two types of trade agreement to be materially different in that regard.

As we heard from numerous witnesses, the modern generation of free trade agreements are comprehensive in scope. They range far beyond the narrow focus on mutual tariff reduction that characterised the multilateral trade agreements negotiated under the auspices of GATT in the 40 years after the second world war. They reach behind the border to address regulatory issues at the heart of our society, including issues of public health, social standards, labour rights and environmental standards, among many others. Those were precisely the reasons why we had such a comprehensive debate on the amendments proposed by the hon. Member for Livingston.

These are international treaties that introduce binding obligations on future generations and thus cannot be repealed as domestic legislation can be repealed. That is why in all our interventions we have proceeded according to the principle that there must be maximum parliamentary scrutiny and democratic oversight of free trade agreements to ensure that we get them right, rather than storing up the prospect of irreparable harm at a later date.

The other international trade agreements covered by the Bill, to use its phrase—that is, the ones that are not free trade agreements—include such ancillary agreements as mutual recognition agreements, according to the explanatory notes. There are many more such agreements, and they tend to be far more narrowly focused than free trade agreements, so we have proceeded on the assumption that they will not require the same level of parliamentary scrutiny. That is a deliberately pragmatic approach I have adopted to ensure that future Administrations can make progress in agreeing such deals where necessary, but we will ensure that there is sufficient potential for scrutiny in all cases to guard against any potential harm from those other agreements.

As well as drawing in the new UK trade agreements that do not correspond to a prior or existing EU trade agreement, amendment 3 speaks to the new UK trade agreements that correspond to a prior or existing EU trade agreement—that is, the ones that the Government would like to restrict us to in this Bill. Again, let us agree from the outset that they will be new trade agreements, even if they correspond to agreements that the EU had previously negotiated with the third country in question. Ministers have done their level best to suggest that the new UK agreements will just be rolled over or grandfathered from the pre-existing EU deals. The delegated powers memorandum issued alongside the Bill by the Department for International Trade is unequivocal: these will be new agreements, on two counts. First, the agreements will be legally distinct from any pre-existing trade deals the EU may have negotiated—that was underlined by witnesses to the Committee, such as Dr Holger Hestermeyer—and secondly, and even more important, these new trade agreements may include

“substantial amendments, including new obligations.”

It is vital to read the Bill on this point. To qualify for the waiving of scrutiny foreseen in the Bill, a UK trade agreement need bear no resemblance whatever to the EU agreement it seeks to replace. Do I think the Government are likely to waive that scrutiny? No. Is the legislation effective in allowing the Government to do that? Yes. Under clause 2(3) and (4), there is no requirement for the UK agreement to match or mirror the EU’s existing agreement in any way, shape or form. It can be a wholly new departure with wholly new obligations, since all the Bill requires is that the other signatory and the European Union were signatories to a free trade agreement—not a corresponding one or a similar one, but “a free trade agreement”—before Brexit takes effect.

As the Bill stands, it is open season for the Government to negotiate what it likes behind closed doors, and then smuggle the implementing regulations through Parliament without the need for a debate or vote of any sort. I hope that hon. Members on the Committee will find that incredible, and democratically unacceptable.

Photo of Matt Western Matt Western Labour, Warwick and Leamington 4:00, 25 January 2018

If I recall correctly, Dr Holger Hestermeyer talked about not only scrutiny, but the importance of having impact assessments alongside the consultation, as these are, as my hon. Friend was explaining, essentially new agreements being put in place.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

Again, my hon. Friend makes a very important point. We heard from our witnesses about the importance of understanding what we are doing before we rush out and do it. My remarks on this afternoon’s legislation have been extremely cautious in many respects, because I think that legislation is important. It is particularly important in this area, because we are talking about internationally binding obligations that are extremely difficult for us, as a country, to reverse. That is precisely why my hon. Friend’s point is so essential. We need proper impact assessments before we have our mandates established and before negotiations are concluded.

We heard in the first evidence session that there is every likelihood that the UK’s trading partners will regard the negotiation of new trade agreements as an opportunity to re-open the provisions that they had previously negotiated with the EU. Those agreements were designed to meet the interests of all 28 member states of the European Union, and the relative weight of the EU in the negotiations that informed them means that the third country in question would have been pressed into making sacrifices that it might not choose to make when acting alone in forming a bilateral relationship with the UK.

Discussions on those countries’ new agreements with the UK are taking place now. I know that the Government are respectful of the EU treaties and are not trying to negotiate at the moment, but they are having fairly detailed discussions. The Minister, in his sedentary position, remains immobile but a smirk is creeping across his face. Those discussions are taking place behind closed doors, so we do not know what the Government have already said, and what they have said they would be prepared to trade away. Make no mistake: the Government are keen to ensure that they get deals done. This whole endeavour is a different way of approaching our trading future, and the credibility of the Government’s position politically relies on being able to conclude deals swiftly. We must be very wary of negotiations done in secret in order to achieve quick results for political convenience to save the Government’s blushes.

We know that we are talking about new agreements, which could well include substantial new obligations on the part of the UK. That is why the Government’s suggestion that they should be granted the powers to smuggle the implementing regulations past Parliament with no provision for scrutiny is so outrageous. The need for a proper parliamentary oversight process for such agreements was alluded to by our witnesses, Jude Kirton-Darling, the rapporteur on the EU Trade Committee, and Dr Brigid Fowler from the Hansard Society. They stressed that point repeatedly in their oral evidence to the Committee, as did so many other witnesses. To that end, paragraph (b) in amendment 3 looks ahead to the enhanced scrutiny procedures that we will propose under schedule 2 to replace the negative resolution procedure envisaged by the Bill as it currently stands.

Amendment 4 is consequential on amendment 3 and would require any regulations made under clause 2(1) of the Bill to be subject to the provisions not of subsections (3) to (5), as at present, but of subsection (2A), which would be introduced via amendment 3, and subsection (5), which speaks across to the Treasury’s powers to set tariffs under the Taxation (Cross-border Trade) Bill currently going through Committee in parallel with this Bill.

Together with amendments 3 and 4, I would like to speak to the four new clauses that they bring into play, namely new clauses 4 to 7. New clause 4 is the top-line clause, because it outlines the stages of what we consider to be a proper parliamentary procedure for scrutiny and oversight of free trade agreements before signature. Once again, let me underline that the procedure is designed to apply to free trade agreements, not to other international trade agreements referred to in the Bill under clause 2(2)(b).

Equally, let me emphasise the importance of the words “before signature” in the title of the new clause. We have deliberately designed a procedure so that Parliament has the opportunity to debate and direct trade negotiations in the early stages, rather than protesting once it is too late. We will surely be supported by the Government in that, given how publicly the Secretary of State has rued the loss of legitimacy that led to the failure of the TTIP negotiations between the EU and the USA. Nick Dearden from Global Justice Now touched on exactly that point in our first evidence session.

Our aim in bringing forward the maximum possible scrutiny and oversight before signing is to ensure that Parliament can amend and improve free trade agreements where they are found to be wanting. That is infinitely preferable to a system whereby Members are presented with negotiated agreements on a “take it or leave it” basis, thus risking the loss of an entire agreement and all the vital export opportunities that go with it simply because there was no possibility of excising or amending one or two of the offending provisions.

In oral evidence, Dr Hestermeyer referred to the system in Germany, where Parliament is involved early on in the proceedings precisely so that it can direct the federal Government in respect of trade negotiations, even though their negotiations are carried out by the European Commission. We want a constructive procedure that focuses on the best possible outcomes for our future trade agreements, not one where the whole ship is spoiled for a ha’p’orth of tar.

I will run through, in plain English, the six stages we have set out and then expand on them as necessary as they have been placed in the amendments, as subsequent new clauses hang off the overview clause. The first is the need for a sustainability impact assessment before the launch of negotiations towards a free trade agreement. The second is the need for Parliament to be involved in setting the mandate for the objectives of the negotiations. The third is the need for transparency—and, in particular, access to negotiating texts—while the negotiations are being conducted. The fourth is the need for regular progress reports to Parliament after each round of negotiations. The fifth is the submission to Parliament of the full text of the agreement as negotiated before its signing. The sixth is a resolution from the House of Commons to give the Secretary of State the green light to sign the agreement.

The first step in any proper procedure towards negotiating a free trade agreement is to undertake a sustainability impact assessment to identify the opportunities and risks that the agreement might present. Nick Ashton-Hart spoke of the importance of that in his oral evidence to the Committee. Carrying out a sustainability impact assessment is already a standard requirement for every new set of EU trade negotiations, and the methodology for conducting such assessments has been developed considerably over the years. Our new clause 5 provides basic instructions as to what a sustainability impact assessment should include at a minimum. For those who want to take the methodological issue further, the European Commission published in 2016 the second edition of its “Handbook for trade sustainability impact assessment”, which I refer the Minister to and is freely available online.

Crucially, our blueprint for what a sustainability impact assessment should include relates not only to the content of the assessment, but to the process that lies behind it. Any impact assessment must incorporate consultation with the devolved Administrations and with representatives of all those businesses and trade unions that are likely to be affected, as well as offering the opportunity for all other bodies to contribute to it.

We have also written into the new clause that the consultation must be in line with the existing code of practice for Whitehall consultations—something that we might usually consider unnecessary to include in legislation. Given the extraordinary mishandling of the consultation prior to this Bill, there obviously needs to be a reminder that every consultation should follow the rules.

The assessment needs to cover the economic impacts of any trade agreement, and importantly those impacts need to be disaggregated both geographically and by sector. The consequences for jobs, small and medium-sized enterprises and vulnerable economic groups are particularly significant, as free trade agreements have sometimes been to the disadvantage of all but the most powerful economic actors.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Infrastructure and Energy)

Apologies, but I just want to take the hon. Gentleman back slightly. I agree with his suggestion that sustainability impact assessments should be carried out and should seek the views of the devolved Governments. What does he suggest happens if a sustainability impact assessment shows a negative impact on one of the devolved Administrations? Given that there is no requirement for consent, how would that be resolved?

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

I am very happy to take that comment on board, but I do not want to get sucked back into our previous debate—I know that you would not let me anyway, Mr Davies.

That is precisely what an economic impact assessment is there to do: to show up those areas of the economy that might benefit and those that might be losers from an international trade agreement. It is then a matter for the Government, and a responsible Government should be trying to balance the interests around all of the United Kingdom to spread wealth and prosperity throughout all of the parts of these islands.

The other day, I was deeply affected to see a graph that I had not seen before and is specifically relevant to the hon. Gentleman’s point. In the top right-hand quadrant were those countries where both GDP and average income are growing. In the bottom left-hand quadrant were those countries where both GDP and average income are declining. In the top left-hand quadrant were those countries where GDP is declining but average income is growing. In the bottom right-hand quadrant were those countries where GDP is increasing but average income is declining. There was only one country in that bottom right-hand quadrant: the United Kingdom. That is a disgrace. That is a shame. It shows precisely why we need economic impact assessments. As many trade agreements have shown over the years, it is possible to increase the GDP of a country through a trade agreement while the people of the country become poorer. That is why we must take these deliberations so seriously. That is why putting these strictures in place is a vital part of what a responsible Government must do in relation to our future trade policy.

The social, human rights and environmental impacts must be included, as must the impacts on animal welfare—an area in which I hope we are able to develop higher standards than have pertained until now. There is also a special requirement to report on the potential impacts of any new trade agreement on the countries of the global south. That must include both direct and indirect impacts, so as to incorporate those countries’ potential loss of market share as a result of trade diversion or preference erosion. To take an easy example, that would be key in the event that the UK sought to grant preferential access to Brazilian sugar exports without proper consideration of what that meant for small-scale sugar cane farmers in Caribbean countries that rely on their existing preferential access to the UK market. The better the terms we offered Brazil, the greater the challenge would be for exporters in the Caribbean.

In that example, we might still choose to offer Brazil preferential access, but a sustainability impact assessment would outline in advance the full consequences of our choice. Crucially, under our proposals, it would also offer advice on flanking measures that we might adopt to mitigate negative impacts on the Caribbean cane farmers. If we are to have a trade policy that is integrated with our international development policy and our industrial strategy, we need to ensure that impact assessments are properly carried out and comprehensive.

The second stage in our procedure for negotiating a wholly new free trade agreement is for Parliament to authorise the commencement of trade negotiations by means of a mandate to the Government outlining the goals and objectives of those negotiations. A requirement for such a mandate is set out in broad terms in our new clause 6, “Parliamentary consent to launch of trade negotiations”. That is standard procedure for all trade agreements negotiated at European level, so we would simply transpose the process from Brussels to Westminster in the light of our taking back responsibility for our trade policy post-Brexit.

At European level, the Commission submits a draft mandate to the Council of Ministers for its consideration, amendment and approval. We propose that the same process should be adopted in the UK, with Parliament as the sovereign governance body in place of the Council of Ministers. Once that mandate was established, it would be binding on our national trade negotiators and would represent a yardstick against which to measure progress and, ultimately, the success or otherwise of the negotiations.

The third stage of our proposed procedure relates to transparency of negotiations and is developed in new clause 7, “Availability of agreement texts”. Let me make it clear that we do not believe that transparency should be restricted solely to those trade agreements for which there is no corresponding EU agreement already in place. This is such a fundamental requirement for basic democratic oversight that it should apply to all international trade agreements as a matter of course, and the new clause is written so that it applies to all categories of trade agreement, without exception.

The Government’s record in this regard leaves much to be desired. It took almost a year of pressing the Secretary of State before we were granted minimal access to the text of the TTIP between the EU and the USA. By the time we—Members of Parliament—were granted access, the TTIP negotiations had already been suspended and the whole exercise was redundant. As if that indignity were not enough, the exchange of letters between the Government and the US Trade Representative’s office before Christmas revealed that the Government have already given assurances to President Trump’s Administration that Members of this House will be denied access to all information on the substance of trade talks shared within the UK-US working group.

The Second Reading debate was instructive: when summing up, the Minister said that that applied only to confidential information. No. It was all information, and they then deemed that all information would be confidential—a three-card trick. May I say how extraordinary it was to hear the Minister for Trade Policy speak to the situation? The information will be held in confidence for four years after the conclusion of the working group—that is the commitment that the Secretary of State has given to the United States—but, without the slightest hint of irony, the Minister for Trade Policy somehow managed to make the following words come out of his mouth:

“In fact, the letters reaffirm our commitment to a transparent and inclusive process with specific reference to Parliament.”—[Official Report, 9 January 2018; Vol. 634, c. 281.]

They do not, they did not and they cannot. I have heard of Orwellian newspeak, but it takes a particularly brazen disregard for the customary meaning of the English language to claim that keeping information confidential represents a commitment to transparency.

The Government’s obsession with secrecy should not be confused with a desire to conceal our negotiating hand from the Americans. The provisions agreed by the Secretary of State are expressly designed to deny British MPs and the wider public any knowledge of what has already been discussed with the United States representatives. In other words, the Secretary of State will not tell us what he has already told them.

I am not dwelling on this as an academic point for some future occasion. The UK-US working group is real and is already meeting to scope out the future parameters of a trade deal, yet there is absolutely no information forthcoming whatever as to what it is discussing; nor is there any information on any other working groups that the Government have set up. We do not believe that it is acceptable to keep MPs in the dark in that way. The Labour party made a manifesto commitment to transparency in future trade negotiations, and we believe the Government should also honour that principle in their relationship not just with Parliament but with the people of this country.

The fourth stage is the right for Parliament to be kept informed during the course of ongoing trade negotiations by means of regular progress reports after each round of talks. The importance of parliamentarians being kept up to date in this way was stressed by Jude Kirton-Darling in her oral evidence to the Committee. She spoke of the benefit to MEPs of having regular engagement with the EU Trade Commissioner after each round of talks across the various agreements being negotiated by the EU at any one time. There is no new clause accompanying that provision, as the requirement is clear and simple.

We have suggested a written report laid before Parliament within 10 days of the end of each round of talks detailing both progress made in each area of the negotiations and the obstacles still remaining at the end of the round. Indeed, we would consider that to be good practice for the Secretary of State to adopt on a unilateral basis in relation to the existing trade talks that his Department has initiated in the various working groups already in existence.

The fifth and sixth stages of our proposed procedure deal with the final stages leading to the signing of a trade agreement. Again, let me reiterate how important it is for Parliament to be fully involved at that early stage so as to be able to influence the final text of any agreement for the better. To that end, our procedure stipulates that the final text be laid before Parliament for 21 sitting days and that a resolution must be passed by the House of Commons before the Secretary of State may proceed with signing.

Taken together, the six stages of that procedure mean that we have front-loaded parliamentary scrutiny to the earliest possible stage of negotiations. That in turn means that the ratification process after signature can go ahead under the Constitutional Reform and Governance Act 2010, and that the incorporation of the new trade agreement into UK law can follow as it has always done, bearing in mind that the UK is a dualist state.

Relying on CRAGA without that prior oversight is entirely unacceptable, as we have stressed on numerous occasions already, and we entirely reject the Government’s spurious contention that CRAGA provides Parliament with an opportunity to subject international trade agreements to sufficient scrutiny. It does not. The Government know it does not. The House of Commons Library has affirmed it does not. That is why it is so vital to the future of our democracy that we introduce our new provisions for parliamentary scrutiny now.

In response to the Minister’s remarks about CRAGA being passed through this House under a Labour Government: I voted for it, but that was in the days when the scrutiny levels in the EU already existed. Scrutiny was then passed down to this Parliament, where the European Scrutiny Committee, under the powerful microscope of Sir William Cash, would examine forensically the contents passed from Europe. All that scrutiny and accountability are being dispensed with—they are being washed away. That is why CRAGA, which was important then, is not now available. CRAGA has been denuded of all that.

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade 4:15, 25 January 2018

I think that the hon. Gentleman is saying that he is very satisfied with the current system of EU scrutiny in relation to EU trade agreements.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

I am pointing out to the Minister, in response to his earlier remarks, the reason I voted for CRAGA then. I think I am right in saying that while his party voted against CRAGA, which it is now relying upon so heavily—there is an irony there—he did not turn up for the vote. I turned up for the vote and I voted for it, but because it was subject to all the scrutiny procedures that were already in place from the EU. The situation has changed.

Photo of Mark Prisk Mark Prisk Conservative, Hertford and Stortford

I have listened very carefully to the six stages of assessment. I do not have a problem with the principle that there should be a thorough process, but the amendments and new clauses ignore one tiny detail: next March, we leave the European Union. All business representatives, particularly of businesses in my constituency, have said that they need to know what happens on 1 April. How will it be possible for any of these existing trade agreements, which is what the Bill is about, to be transferred across under his proposal? How many years will businesses have to wait?

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

In fact, they would not have to wait. I have great respect for the hon. Gentleman and I know he speaks with real experience in these matters, having been a trade Minister. I ask him to look at what we have proposed: we have tried to introduce the bifurcation at a high level in the legislation. We have put the proposals in at that point. Of course, they would have an impact on all the new free trade agreements. We are trying to ensure that for new free trade agreements, this is the proper process of scrutiny that will come into place. On the corresponding agreements—where the EU already has an agreement—there will be a streamlined procedure, but one that is still subject to appropriate parliamentary scrutiny, particularly where those agreements have been substantially amended.

Let me conclude this section of my remarks by repeating that we have tabled the amendments and new clauses to establish a procedure for new free trade agreements that do not correspond to any prior EU agreement—that is the point I just made to the hon. Member for Hertford and Stortford. I was struck by how forcefully the representatives of business made the case to the Committee in our final oral evidence session on 23 January that there needs to be substantially greater consultation on the new trade agreements that the Government are negotiating, which correspond to prior EU agreements. Wherever those EU agreements are modified to incorporate new obligations, those obligations must be highlighted and presented to Parliament, to business and to the country as a whole, for proper debate, proper scrutiny and proper accountability. We will precisely return to the issue of scrutiny for these new replacement UK agreements as we go through the rest of the Bill.

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade 4:30, 25 January 2018

The Government have been clear that we do not seek to renegotiate existing trade agreements. In leaving the EU, we seek to maintain continuity in our existing trade and investment relationships. As such, we seek no change in the effects of our existing agreements as we leave the European Union. Therefore, special review procedures, as proposed in new clause 8, for example, are unnecessary.

The powers in the Bill will be used only to transition the existing trade agreements that the EU has signed up to prior to exit day. The Bill does not relate to the negotiation, signature or implementation of future free trade agreements. We have taken that approach for a specific reason: we want Parliament to play a vital role in the scrutiny of future trade agreements, as it always has done. In the trade White Paper, we made it clear that our future trade policy must be transparent and inclusive, and that Parliament will be engaged throughout the process. We will continue to respect the role of Parliament when agreeing the terms of future trade agreements.

Photo of Bill Esterson Bill Esterson Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (International Trade)

Is the Minister giving us an undertaking that there will be an affirmative or super-affirmative scrutiny process in Parliament on the new trade agreements?

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade

All that will be considered in due course. We will bring forward proposals in the coming months on how Parliament will interact with future trade agreements.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Spokesperson (Trade and Investment)

Will the Minister give a definition of “due course” and say what his vision is? Many external organisations and hon. Members have expressed about the structures in this place and Delegated Legislation Committees. I have sat on those Committees and I know they are not sufficient to allow proper scrutiny of the thousands of statutory instruments and regulations that will have to be dealt with, or to allow Parliament and its Members to have a say on them and be confident that they will be able to scrutinise what has been decided.

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade

We want a clear and significant role for Parliament in the scrutiny of future trade agreements. Returning to my intervention on the hon. Member for Brent North, the amendments and new clauses would pre-empt those arrangements before we have been able to consider properly what we are doing and to consult on that.

On 5 January, the Government published a response to the trade White Paper, which covered a number of things—of course, not everything that was in the White Paper is in the Bill. We will consider the views expressed in that consultation as we develop proposals regarding the role of Parliament in respect of future trade negotiations.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Spokesperson (Trade and Investment)

A number of deficiencies have been highlighted. Does the Minister think that some of the deficiencies in the Bill, and the fact that he is having to tell us that some things will come later—I appreciate that he has great integrity and the best intentions—relate to the fact that the Bill was published before the consultation period ended? Is that the reason why some aspects of the Bill are so deficient?

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade

As I have stressed, consultation on future trade policy is ongoing. It is not dependent solely on the trade White Paper. We are consulting by speaking with partners, businesses, the devolved Administrations and other stakeholders constantly as we seek to bring forward proposals on our future trade policy. However, as I have explained, we consciously decided to make this Bill about our current trading arrangements and ensuring that they can be transitioned properly into UK law.

Therefore, these amendments pre-empt the full consideration of the 7,429 responses received during that consultation and of the views expressed inside and outside the House. It is right that we take the appropriate amount of time to develop a range of proposals that ensures that Parliament, the devolved Administrations, devolved legislatures and a wide range of stakeholders, including business and civil society, are engaged throughout the negotiating process.

The hon. Member for Brent North made a fascinating speech on what the UK’s future trade policy might look like, but that is not what we are deciding today. He said that Government can smuggle new trade agreements through Parliament without a vote. No. The implementation powers in clause 2 are exercisable by negative procedure statutory instruments. These are subject to a vote in either House of Parliament, if the regulations are objected to by parliamentarians. Parliament has the right to vote on the implementation of transitionally adopted trade agreements, if it so desires.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

The Minister must be more straight- forward with the Committee. We have already been over this ground. He knows that the negative procedure does not make provision for anything but the grace and favour of the Government in giving Her Majesty’s Opposition an opportunity to object. There is no necessity at all for a debate or vote on the Floor of the House. He must be straightforward about that.

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade

Again, I stress that Parliament has the right to vote on the implementation, but we also must remember that these will be agreements that are substantively the same as the current agreements. The reason I intervened on the hon. Gentleman—when I think he confirmed he was quite content with the existing EU scrutiny procedures—is that of course all of those agreements have been through the existing EU scrutiny procedures. I was not necessarily with him in the Chamber or upstairs each time one of those EU trade agreements went through, I think he was satisfied with those procedures at the time.

Photo of Bill Esterson Bill Esterson Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (International Trade)

Is the Minister categorically saying that there will be no changes to the agreements that we are describing as corresponding agreements before they come through?

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade

I refer the hon. Gentleman to the evidence of the International Trade Committee, if that is in order. We had a good round about this at the Select Committee yesterday—some of the members of the Select Committee are here or are at least members of the Bill Committee—and we are quite clear that 70-plus partners have been engaged in this process. All 70-plus have agreed in principle; none has raised objections in principle to doing this. There is no reason that they necessarily would want to change the substance. They need continuity in their trading arrangements in the same way that we do.

The hon. Member for Brent North claimed that a wide range of stakeholders provided oral evidence calling for greater scrutiny mechanisms for future approved trade agreements. I think that was a fair comment. There were a number of views on how our future scrutiny arrangements might be, but I think the evidence session showed just how varied and complex the views on this matter are. It is right that we take the time to think through our options carefully. Let us not rush ahead and put in place arrangements that may not be fit for purpose. That is why we will be returning to future trade agreements in the future.

We will return to Parliament with proposals on future free trade agreements, on which we will seek views in due course. Accepting these amendments and new clauses would frustrate our ability to fully consider all of the issues and options in the round. I therefore ask the hon. Member for Brent North to withdraw the amendment.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

I will try to extract the crumbs of comfort from the Minister’s remarks. He has said that he recognises that there is a role for greater parliamentary scrutiny of our trade arrangements and that these are matters to which we should return in due course. He has also suggested that we should be able to have a proper consultation on the future trading arrangements. Those are things that I take as good will on the part of the Minister.

I propose not to press these amendments, but I make it clear to the Minister that, at a later stage in the passage of this legislation, he should table his own amendments to do what the Bill says it is about and what Her Majesty in the Gracious Speech to Parliament said it was going to be about. If he does that, I will be very happy. I will see him as a man of his word, and will be looking forward to going through what I assume will be a very similar text to the one I have tried to present to the Committee today.

I will not press these amendments today, but I put the Government on notice that it is time for them to act and to come forward with their own proposals. If they do not, these Opposition measures will return at a later stage. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(Craig Whittaker.)

Adjourned till Tuesday 30 January at twenty-five minutes past Nine o’clock.