Trade Bill — House of Commons, 2018-07-17
Topic: Foreign Trade
Jonathan Simon Djanogly (Conservative, Centre-right): We are clearly in a very much better situation now with this Bill’s regulation scrutiny provisions than after the Second Reading in this House, and on that basis my recommendation will be that hon. Members do not vote for my new clause 6 or my amendments 6, 7, 8, 9 and 10, but that they vote for the alternative Government amendments, new clauses 12, 13 and 14 and all their tabled amendments to clause 2. If the Government amendments pass, Henry VIII will have been banished from this Bill and a sensible compromise scrutiny system will have been inserted. The Government have listened and done the right thing and we should support them for that, but there are still issues, so let me explain my thinking This Bill applies to around 40 existing EU trade-related agreements involving some 70-plus third countries. This actually also includes some agreements that are concluded but are still due to be implemented, which I shall call collectively FTAs. It is estimated that 10 of the UK’s top 50 export markets are served by these EU FTAs, accounting for 35% of UK trade. I can therefore understand why the Government are keen for the UK to adopt these FTAs post Brexit, or "roll them over" in the terminology used by Ministers. In addition, I understand the practicalities of the situation: the Government have limited negotiating capacity and the idea of dealing with all of these 70 third countries and starting deals from scratch is undoubtedly unrealistic in the immediate term. Indeed, the average time for negotiating an FTA is seven years and the recent Canada deal took more like 15 years. So I understand that there is a lot at stake here for the UK, and I appreciate that the International Trade Department is under a lot of pressure to deliver Having said that, I do not think that the Department has covered itself in glory in its handling of these roll-overs. To start, I would make the point that we have been given a wall of silence. The International Trade Committee back in March asked the then Minister to prioritise these negotiations more, to publish a detailed timetable of the work-streams involved, to produce a risk register identifying clearly the agreements concerned and to have contingency plans even for where third countries have only given an assent in principle. It took the Government until 15 May to respond to the Committee report, and to call their response bland and non-committal would be an understatement. In the meantime, various leaks and rumours have been appearing, maintaining that some of the negotiations with third countries have not been going quite according to plan and that the EU has not been as helpful as the Ministers had originally thought it might be. This would include the EU telling us that it will not ask its FTA trade partners to allow the UK to benefit from their existing deals until the UK signs the final legal text of the Brexit deal. That could leave us with only a few months up to next March in which to negotiate the roll-overs Given all this, I have some sympathy with new clause 16, tabled by the hon. Member for Swansea West (Geraint Davies), which demands further details of the status of these proposed roll-over deals, and the Minister should acknowledge the frustration on this that is shared by everyone outside his own Department. We have received vague assurances from the Department that the roll-over discussions are going according to plan and that everything will be all right on the night. We are also being told that the Government need to have this legislation in place so that they can action the roll-overs, and that they need the regulatory powers to make this happen quickly if need be, including in the situation of our Brexiting with a no-deal scenario I am trying to show that the Government have asked for sweeping Henry VIII powers while keeping people pretty much in the dark as to what they might be needed for, and while providing little hard evidence of what has been achieved to date. Of course, UK business has also been crying out to know where we stand as regards these important overseas markets. I hope that the Government are right and that the roll-overs will take place as planned with no or few changes, but that does not mean that it would be acceptable that any material changes to the deals should just be waved through by Ministers without any parliamentary scrutiny. For instance, let us say that one of the EU third countries with which we wish to roll over a deal says, "Yes, we agree that you can roll over, but let’s face it, you are a market of only 50 million people rather than 500 million, so we’ll agree to roll over, but only on condition that we also get 50,000 visas a year." Under the Bill, that could be pushed through by Ministers on a negative order with no scrutiny at all. By the way, I do not see this as a remain argument or a leave argument; I see that as simply wrong. If Brexit is about returning power to Parliament, it is surely not about then just giving Ministers sweeping new powers, not least in a scenario where so little information has been given to hon. Members The Government have been maintaining that they wish to use these powers to roll over existing EU deals before possibly coming back to renegotiate substantive deals with the same countries, which would be subject to a scrutiny process yet to be proposed. However, I do not see why these same powers should not be capable of being used again after roll-over to make further changes to the same FTA during the five-year period—a sunset period which, with a possible further five-year extension, is in my opinion much too long All those reasons led me to think that we have a real problem with these provisions and I therefore tabled my amendments, looking for a triage and scrutiny system. However, since tabling the amendments, I have had an ongoing dialogue with Ministers, including my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) and more recently the Minister for Trade Policy, my hon. Friend the Member for Meon Valley (George Hollingbery). Discussions have been courteous and positive, and I am pleased to say that the Government have listened and tabled their own amendments—I think more than 40 of them—to clause 2 This will mean that the first proposed statutory instruments related to an FTA will need to be laid not less than 10 sitting days after the issuing by a Minister of an explanatory report. The changes proposed in the report will then be cross-referred to in the related SI’s explanatory memorandum. Further, it is now proposed that all related SIs will be subject to the affirmative procedure, however material or immaterial they may be. This effectively takes away any need for sifting provisions. Finally, the sunset period is proposed to be cut from five to three years, plus up to a possible further three years following an affirmative resolution.