Trade (Australia and New Zealand) Bill – in a Public Bill Committee at 3:21 pm on 12 October 2022.
We will now hear evidence from our next witness, Rosa Crawford, policy officer at the TUC, who is appearing via Zoom. Rosa, thank you for being available a little early. We have until five minutes past 4 for this session. May I ask you to introduce yourself, for the record?
Rosa Crawford:
I am Rosa Crawford, policy officer lead on trade and Brexit at the Trades Union Congress, the national union centre that represents 48 affiliated unions, and over 5.5 million workers.
Q Thank you, Ms Crawford, for being willing to give evidence to the Committee. We are focusing on the procurement chapters of the Bill. The Government have told us that they will offer businesses billions of pounds-worth of new opportunities, and that that is one of the many reasons why these are fantastic trade deals. Do you share that assessment, or could the deals have been improved in any way?
Rosa Crawford:
We as trade unions believe that public procurement has the potential to create tens of thousands of jobs and many apprenticeships, but they need to be on the right terms; we have to make sure that these are decently paid jobs, on good, secure terms and conditions, that support a just transition and promote equality. What causes us concern about the Trade (Australia and New Zealand) Bill is that it does not provide guarantees that those social objectives will be promoted through our public procurement procedures. In fact, there is potential to undermine them, particularly in the parts of the UK-Australia trade deal about public procurement, which this legislation would allow to be implemented.
Article 16.17 of the UK-Australia agreement says only that environmental, social and labour considerations “may” be taken into account by procuring entities, and only when those considerations are
“based on objectively verifiable criteria”.
That could open up scope for Australian companies, via their Government, to challenge social criteria in UK public procurement processes as being potentially unverifiable, because that is an undefined term. Multinational companies are eyeing up our procurement market—this is a big objective in trade deals—and will be looking for any means of challenging any social criteria that they regard as being a burden for business, such as a requirement to pay a living wage or to provide secure conditions. We are very worried about the language in the UK-Australia procurement provisions, which the Bill would allow to be implemented.
Let me connect that to the Procurement Bill going through Parliament. It does not give us the assurances that we need that social criteria will be promoted through its provisions, unlike the EU-derived procurement rules in the Public Contracts Regulations 2015, which allowed the Government to refuse a tender on the grounds of its non-compliance with International Labour Organisation conventions, and required social value criteria to be taken into account in the most advantageous tender criteria. There is no such requirement in the Procurement Bill. That means that now, in UK procurement rules, there are no provisions to prevent public money from being given to suppliers who abuse fundamental workers’ rights. For us, that is going in completely the wrong direction.
In the EU-UK trade and co-operation agreement, we made commitments to promote fundamental International Labour Organisation standards, yet in the Procurement Bill and the UK-Australia agreement, we do not see them promoted. I will highlight two more concerns about the Procurement Bill. There is no requirement for high labour standards—
Order. Forgive me, but we are not talking about the Procurement Bill. There is clearly some crossover, but if we can try to avoid the temptation to spend too much time on that crossover, I would be very grateful. Thank you.
Q Thank you very much, Ms Crawford. You mentioned that the Procurement Bill could supplant the Trade (New Zealand and Australia) Bill. Legislation to implement accession to the CPTPP could do the same, if the Government have their way. Will the problems to which you have alluded be resolved if we join the CPTPP, or will they remain and be similar to those that exist in relation to the two FTAs?
Rosa Crawford:
CPTPP could create an even more problematic situation for us. Members will know that the CPTPP contains the investor-state dispute settlement provisions, and unless the UK explicitly opts out of those provisions, we will be bound by them. That obviously means that foreign investors could sue the UK Government for any actions that are interpreted as being a burden on business. That could mean living wages and decent conditions. If we accede to the CPTPP, we could be allowing social criteria that we include in our public procurement provisions to be challenged by foreign investors from across the CPTPP countries, which obviously include some of the largest multinationals in the world.
It is extremely problematic to us that the UK is considering acceding to the CPTPP, and the TUC is opposed to that, as are the majority of trade unions in CPTPP countries. It should be said that the CPTPP takes a very broad, liberalising approach towards its service commitments, which means that a number of public services that are part-privatised could be locked into that privatisation through the CPTPP. The direction taken by the CPTPP, as well as by the UK-Australia trade agreement, which the Bill will implement, seems to us very problematic. It could undermine the expenditure of public money through public procurement—[Inaudible.]—and decent-quality public services.
Q Some of our other witnesses, particularly those representing farming organisations, raised concerns about the scrutiny of trade deals. When we start line-by-line scrutiny next week, we certainly hope to explore the potential for greater scrutiny of the regulations that will flow from the Bill. What is the TUC’s position on scrutiny of the FTAs, and more generally?
Rosa Crawford:
We have specific concerns about the lack of scrutiny provided for through the Bill, because paragraph 2 of schedule 2 states that any regulations made under clause 1 will be subject only to the negative procedure. Obviously, that will deny MPs the opportunity to scrutinise the procurement legislation introduced via the Bill, so it will not be possible for Members to challenge legislation that undermines social standards in procurement. We believe that clauses 1 and 2 should be subject to the affirmative procedure.
We also have more broad concerns about the lack of scrutiny of the UK-Australia trade deal specifically, as well as of all the trade deals that the Government have negotiated to date. For us, it is really important—[Inaudible.]—scrutiny, and scrutiny by trade unions. Otherwise, those deals will not deliver the best outcomes for workers, public services and all sectors of the economy. We really regret the process that was followed for the UK-Australia deal; Members were not provided with the opportunity to debate and vote on the agreement when it was brought before Parliament in June. The Bill is the only opportunity we have to debate the provisions of that deal, but the legislation is extremely narrowly drawn, and that is completely inadequate, in terms of the democratic process.
Trades unions have also been completely shut out of negotiations. We released a joint statement with our counterpart in Australia, the Australian Council of Trade Unions, at the start of the negotiations, setting out our positive agenda for what we thought a UK-Australia trade deal should look like. We said that trade unions should be in the room to provide expertise from across different sectors about the kind of protections that workers need, as well as the agricultural safety standards required. That impacts on workers’ conditions, and has to do with workers not being exposed to unsafe chemicals and unsafe procedures. We said that unless trade unions were in the room, we would not get the outcomes that workers needed.
The Government made a lot of positive noises about trade unions being included in the negotiations, and last September, the then International Trade Secretary, Liz Truss, said that the trade unions would be included in their trade advisory groups, which are consulted on the text of trade negotiations. We were not given those seats, and we were not consulted on the text of any of the UK-Australia trade deal as it was being negotiated. As a result, we have a trade deal that does not have adequate enforcement mechanisms and has very weak commitments on workers’ rights; there is only a reference to the International Labour Organisation declaration, not to the fundamental conventions. The terms of the deal refer to listing for services, which, in common with the CPTPP, will expose part-privatised services to being locked into that privatisation. The deal also has very problematic provisions on data liberalisation, which could mean that workers’ data is not properly protected. It could allow for that data protection to be challenged as a barrier to cross-border flows of data.
We have ended up with a deal that is completely inadequate and threatening, from a workers’ rights point of view, and from the public point of view, because we did not have engagement with that deal. As I said, that is also the case with the UK-New Zealand deal. In fact, we have not had input to any of the trade deals that the Government have negotiated to date. We really want a change of direction; we want trade unions consulted, as they are in other countries, such as the US; there, they are routinely consulted during trade negotiations. We want Parliament to be given a full say, and to have the ability to debate and vote on any trade deal brought before the House.
Thank you. We have a little bit more time than we expected, but we also have quite a few questions to get through, as I am sure colleagues will be pleased to hear.
Q Will the person giving evidence reflect on her comments encouraging more statutory instruments to be brought forward under the affirmative procedure? I feel that she may have inadvertently misled the Committee. Obviously, it would be legitimate bring forward SIs in that way, but there was an assertion that the negative procedure means no debate. My understanding is that any Member of Parliament can pray against regulations introduced through the negative procedure; that would guarantee debate in a Committee like this. I think I am correct; perhaps she could review her comments and clarify whether she has mis-spoken.
Rosa Crawford:
I understand that there can be a debate, but that it is much more difficult for the regulations to be voted down, and that a debate is not guaranteed. There must be an active initiative to pray against the regulations to create that debate. That is much less likely to happen. Such a number of SIs come through that it is quite difficult to trigger a debate on each one and vote against them. Full democratic scrutiny is much harder to achieve under that process than through primary legislation.
The supplementary point was made, and a supplementary supplementary point is now on the record as well, so I think we will move on.
Q It was helpful to clarify that there is no guaranteed debate.
I would like to ask Ms Crawford a question that I have asked others, and it is very much on the theme of what you have been talking about. You have said that questions have not been answered on jobs, climate change, workers’ rights, environmental considerations, and indeed the correct way to spend public money. What is your view of the fact that implementing legislation is being introduced on the New Zealand FTA before Parliament has had the opportunity to debate it under the CRaG provisions?
Rosa Crawford:
We believe, again, that there is a deficit of democratic scrutiny. Much more parliamentary scrutiny should have been possible throughout those negotiations, as well as the negotiations on the UK-Australia FTA. The International Trade Committee has not been consulted on the text of that agreement as with UK-Australia, and there has not been the possibility to have a proper debate about the agreement before it is implemented, as you say. We are extremely concerned about that process and very worried that the Government will again try to push this through Parliament without having the proper debate required. Obviously, the negative resolution procedure will apply there, and it means that unless there is a resolution against, which can only delay the agreement for 21 days, it will become law. It is going to be very difficult for that process to be triggered by parliamentarians, so we are very concerned about the approach taken with UK-New Zealand as well
Thank you.
Q Thank you for clarifying the negative and positive procedure. You are right that the use of the negative procedure means it will be very unlikely that, even if one Member prayed against it, it would get a full debate, and almost certainly not a vote. It would have to get the Front Bench and a large number of MPs to secure a debate. We know that on a number of occasions, even when things have been prayed against because of recess and scheduling times, they have still slipped through, so it is no guarantee, whereas a positive procedure is a guarantee.
I have asked people about the scope of the secondary legislation that the Secretary of State can lay down. In regard to the trade deal, the scope is slightly wider than “must”; it is currently phrased as “may”. Do you think that the scope is correct at the moment, or should it apply only to things that the Government are legally required to bring forward under the trade deal?
Rosa Crawford:
Yes, we are concerned that the scope is very broad. As has been said by you and a number of members of the Committee, the negative resolution procedure makes the process for scrutiny and debate, and for full democratic—[Inaudible.] Using “may” terminology, rather than what the Government are legally bound to implement, introduces an element of concern that there might be a whole range of things brought in through this legislation that are not strictly required to be brought in, and that could be problematic because this Government have not suggested they are going to take an approach that is about protecting social standards and ensuring that social criteria are indicated in public procurement. We are therefore worried that there might be additional measures that would allow for further liberalisation of the public procurement processes, and for businesses that do not respect workers’ rights to be awarded public money. That would completely undermine the standards, so we are very concerned about the broad drafting of the Bill.
Q Thank you for that, Rosa—much appreciated. I want to bring you on to the way that the Secretary of State gets to introduce these secondary pieces of legislation, because that is how much of the Bill will be enacted in reality, not through on what is on the face of the Bill. There is no requirement for them to consult with businesses, trade unions or other stakeholders. I am not suggesting that we create a complex mechanism, but what is your view on a line requiring the Secretary of State at least to demonstrate that they have consulted stakeholders and potentially the International Trade Committee, and sought their views before the laying of a negative or positive procedure? What is your view on requiring consultation with the International Trade Committee and stakeholders such as trade unions?
Rosa Crawford:
We would strongly support the inclusion of such a provision because, as I say, it is essential to consult trade unions on the provisions in all parts of the trade agreement. On public procurement specifically, we need consultation with the unions to ensure we have the requirements there so that international labour standards and environmental standards are upheld, and that we pursue public objectives such as reducing inequalities through public procurement. That consultation with trade unions and parliamentarians is really important. The International Trade Committee is an important Committee that should be consulted, because there is expertise there on the public procurement provisions; then maybe other Committees that are relevant and have an interest should be consulted. Having that requirement for consultation with MPs would be a welcome addition to the Bill.
Q Can we go back, Rosa, to what you were saying about the impact on workers’ rights, and indeed environmental considerations? Can I confirm that your concern—or one of your concerns—about the Bill and the trade agreement behind it is that organisations have the ability to undercut rights and standards, in spite of what is elsewhere in domestic legislation?
Rosa Crawford:
Yes, that is correct. With both the UK-Australia and the UK-New Zealand trade agreements, you have a weak labour chapter that makes reference only to the ILO declaration, rather than a requirement of fundamental international labour organisation standards respected by both parties. That is an issue in Australia and New Zealand because, despite the fact they both have progressive Governments, neither has ratified all the fundamental ILO conventions. New Zealand has not ratified the fundamental conventions on minimum age, health and safety, or freedom of association, and Australia has not ratified the fundamental conventions on minimum age, and health and safety.
Without that base of fundamental rights, there can be potential for a pressure on rights to lower here, as businesses take advantage of the market access they can get through the UK-Australia and UK-New Zealand trade agreements to places where they can potentially respect rights less. That could pressure rights to be lowered here. You do not have a labour chapter that has high standards, requirements and rights, and it has an ineffective enforcement mechanism that requires a proven effect on investment and trade, which we think will be difficult to meet.
There are similar provisions in the CPTPP labour chapter, despite the fact that CPTPP contains countries that are egregiously breaching labour rights—such as Vietnam, where trade unions are banned, as well as Brunei. We have not seen the CPTPP labour chapter being used at all. To us, those kinds of provisions are ineffective when they are included in a trade agreement, so it is concerning that the trade agreements we have with Australia and New Zealand do not have those effective provisions in place for labour standards. It sets a concerning standard for trade agreements we might sign with future partners, particularly as the Government are considering signing trade deals with places where labour rights are much worse, such as Gulf states, India and Israel.
The direction of travel is concerning in Australia and New Zealand. The inadequate protections around environmental standards also have an impact on workers’ rights; allowing produce with lower environmental safety standards to be imported into the UK potentially exposes workers here to more dangerous chemicals and other production methods that impact on workers’ safety and protection. We are concerned about the approach taken in both agreements.
Q You said in your earlier evidence that the previous Secretary of State had promised to include the TUC in private discussions about free trade agreements, presumably including the Australia and New Zealand deals, but that that had not happened. Has the general secretary of the Trades Union Congress ever had an apology from the Department for International Trade for not including you and adhering to that promise?
Rosa Crawford:
No. We have just had several pledges from successive Secretaries of State for International Trade. Liz Truss, when she was Secretary of State, had a meeting with our general secretary, Frances O’Grady, in which she assured her that unions would be included on these trade advisory groups. As I say, that was in September 2021.
Then our general secretary had a series of meetings with Liz Truss’s successor, Anne-Marie Trevelyan, including a meeting that also included the US trade ambassador Katherine Tai. She also made the pledge that trade unions would be included on these trade advisory groups. After that meeting, she appeared before the International Trade Committee in April this year, where she said that she hoped that trade unions would be included on the trade advisory groups as soon as possible, but we still have not seen any sign of that.
We hope that the new Secretary of State for International Trade will make good on that promise. We have written to Secretary Badenoch to request that the Government fulfil their pledge to include trade unions on the trade advisory groups, but we still have not seen anything. We are surprised and concerned that we have not seen progress in over a year since the Government pledged to include unions in the group. As I say, the outcomes are that we are getting trade agreements that are undermining workers’ rights, and new trade talks are being launched with really serious implications for workers’ rights with countries such as Israel, India and the Gulf states.
I do not know whether it is in order, Chair, but to save time for the Committee next week, I wonder whether the Minister might want to reassure the TUC representative that the Secretary of State will grant access to the TUC in the future. It would save a bit of time next week if he were willing to give that pledge.
I am very grateful for that very kind offer from the shadow Minister, but it is not for the Chair to adjudicate on what the Minister may or may not say in the future. I am sure that if the shadow Minister raises it next week, he can hear it directly from the Minister.
If there are no further questions, I thank Rosa Crawford for her time, and for spending a little more time with us than advertised. We very much appreciate it. Thank you very much indeed.
We will now suspend the sitting until the next witness is ready.