International Trade Committee statement on Free Trade Agreements: Parliamentary Scrutiny - Nov 3

Free Trade Agreements: Parliamentary Scrutiny

International Trade Committee

Select Committee statement

[Relevant documents: First Report of the International Trade Committee, UK trade negotiations: Scrutiny of Agreement with Australia, HC 444; Second Report of the International Trade Committee, UK trade negotiations: Agreement with Australia, HC 117; Third Report of the International Trade Committee, UK trade negotiations: Agreement with New Zealand, HC 78; Fourth Report of the International Trade Committee, UK trade negotiations: Parliamentary scrutiny of free trade agreements, HC 815; First Special Report of the International Trade Committee, UK trade negotiations: Scrutiny of Agreement with Australia and Agreement with Australia: Government Response to the Committee’s First and Second Reports, HC 704.]

Mr Deputy Speaker (Mr Nigel Evans)

We now come to the Select Committee statement. Angus Brendan MacNeil, representing the International Trade Committee, will speak for up to 10 minutes, during which no interventions can be taken. At the conclusion of his statement, I will call Members to put questions on the subject of the statement, and call him to respond to these in turn. Can I emphasise that questions should be directed to Mr MacNeil, not the relevant Government Minister? Contributions should be questions and should be brief, and those on the Front Benches may take part in the questioning. I call Angus Brendan MacNeil.

12:40:00

Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)

Tapadh leibh, Mr Deputy Speaker, and it is a great privilege to be called. Before I get going, I want to flag up a letter that has been written to party Whips from influential women in the trade space calling for more women to be on the International Trade Committee. While this is not a matter for me as Chair or for the staff of the Committee, we do think it is worth flagging up that this call has been made. This letter has been written to party Whips by Sally Jones, Catherine McGuinness, Nicola Watkinson, Sabina Ciofu and Noreen Burroughes Cesareo. I think it is worth putting on the record that that has happened.

I am grateful to the Backbench Business Committee for the opportunity to make a statement to the House on the 4th report of the International Trade Committee on parliamentary scrutiny of free trade agreements. I would also like to take the opportunity to acknowledge the hard work of hon. Members on the Committee from all parts of the political spectrum, the Committee staff, who work tirelessly, and those who have provided written and oral evidence to us in our FTA inquiries.

This year, we have completed scrutiny on new FTAs with Australia and New Zealand, and we have commented on the specific content in a report on them. However, as we went through those FTAs, there were themes that kept emerging, as they did from other inquiries. In our role as a critical friend of the Secretary of State for International Trade and the Department for International Trade, we have included these in the report to start a constructive conversation about future parliamentary scrutiny. At this stage, I would put in a disquieting or discordant note by saying that a general debate a week on Monday lumping both together does not really cut it at all.

From the evidence we have received and seen ourselves, as well as the international comparisons we have undertaken, it is clear that the way in which the Government engage with others, including Parliament, through planning, negotiating and delivering FTAs is not all it could or should be. It was particularly galling this morning to see the Secretary of State actually blame Parliament for the now Prime Minister calling the Australia deal “one-sided” at one stage during the Conservative leadership hustings.

We are calling on the Government to undertake longer-term consultative reviews on how they approach this and to report back within this Session of Parliament. Our experience of scrutinising the FTAs, and the Australia deal in particular, was far from what we had expected, so we specifically ask the Government to look at how they work with Parliament and its Committees, and to consider how they can bring us in more closely throughout the process. However, we know that doing this well will not be a quick process, so we call on the Government to make changes in the interim to ensure that the scrutiny arrangements are stronger for all future FTAs, not just those following the review.

The Secretary of State has said she will provide indicative timelines for the new FTAs. She has co-ordinated the formal scrutiny period for the New Zealand FTA with the publication of our report, and we are grateful for that. Our report asks for specific further commitments on the time between key stages in that timeline to ensure that we are able to undertake robust scrutiny in the necessary time, and with increased certainty, in advance of the FTAs being signed.

We are also consider that the provisions for parliamentary scrutiny under the Constitutional Reform and Governance Act 2010—CRaG, as it is known—are out of date and should be included in the Government’s review of scrutiny arrangements. As our report notes, when CRaG was being taken through Parliament it was

“in a significantly different context to that of today.”

The fact that it was considered before the vote to leave the EU means that Parliament did not consider CRaG’s suitability for scrutinising a raft of new free trade agreements negotiated solely by the United Kingdom.

The fact that the Government have made additional commitments—they are welcome, although they have not always been met in the spirit, only in the letter—underlines how the CRaG provisions do not go far enough to meet the needs of the new context and to allow strong parliamentary scrutiny. The Government have said they believe that

“CRaG continues to provide a robust framework”.—[Official Report, 12 October 2022; Vol. 720, c. 162WH.]

We respectfully disagree and urge them to reconsider.

Further, CRaG and the additional commitments previously made by the Government, as set out in an exchange of letters between the then Minister Lord Grimstone and the Chair of the International Agreements Committee, Baroness Hayter, have been shown to have insufficient strength. Parliament cannot reject an FTA, but CRaG gives this House, and only this House, the power to delay ratification indefinitely if it so chooses. However, with the Australia FTA we saw that the Government can prevent us from being able to use this power by refusing to grant a debate and a vote within the CRaG period.

The Committee is clear that the Government must commit to any future FTAs being subject to a debate and a vote on a substantive motion within the CRaG period, giving this House the time to discuss the contents of the deal and to show whether it supports ratification. It is not enough for the Government to say they will do this subject to parliamentary time; they must make time, and they must not tie the House’s hands. This must start with the New Zealand FTA, which will be published on Monday. Particularly given that the Prime Minister, who at the time of his resignation as Chancellor pointed out that he felt a deal was “one-sided”, is now Prime Minister and is back to head-in-the-sand business as usual, this really is selling people short. If someone has such a private view, they can have such a public view on FTAs.

Another key theme common to both FTA inquiries and on which we have also received evidence in other inquiries is the need for a single document that clearly sets out the Government’s trade strategy and the role of FTAs within it. The Government have previously rejected calls for this, pointing to various documents as collectively explaining the strategy, but we have seen and heard that this is not sufficient for businesses and other stakeholders. It is also not enough for us, meaning that we lack a single point of reference against which to scrutinise how successfully and coherently the Government are delivering on their trade agenda around a central strategy.

There also remain questions about other important aspects. Sometimes, trade deals are not solely trade-focused; they have aspects that are not trade-focused, for example in relation to human rights and the environment. There have been mixed messages about whether these should be included in FTAs or addressed via other means, or a combination of the two. Some of these aspects may not have been an issue for FTAs already negotiated, but omitting them from future FTAs could be a significant missed opportunity. We are therefore asking the Government to clarify their position on how and where such issues must and should be addressed.

I am not confident, due to a lack of scrutiny, about whether Members fully understand enough about these trade deals. The New Zealand trade deal is worth about one 250th of the damage Brexit is doing to the economy, jobs and living standards. All the trade deals on the horizon will not make up one 20th of that damage. Do Members understand—I am not confident we all do collectively in the House of Commons—that trade deals merely replace tariffs? The paper-free and bureaucracy-free trading that the UK enjoyed in the single market of the European Union is not being replaced, and nothing can be exported from the UK now without paperwork.

In conclusion, I want to welcome again the recent positive movement by the Secretary of State and her predecessor in seeking to rebuild relationships that had deteriorated significantly. These are steps in the right direction, but as our fourth report shows, there is still a lot further to go before Parliament and the public can be assured that new trade deals are being as rigorously scrutinised as they should be. We hope that the Government will consider and rapidly accept our recommendations, which are cross-party, and help us all to achieve this goal for the good of scrutiny in the House and for the good of all Members’ understanding.

The Minister of State, Department for International Trade (Greg Hands)

I congratulate the Committee Chair on his report, which we will obviously respond to in due course, and I thank him for his warm words about the commitment by our new Secretary of State to engage with his Committee. 

The Committee has been consistent under the hon. Gentleman’s chairmanship in calling for more scrutiny. This is not the proper place for me to enter a full defence of CRaG, but I have a question for the hon. Gentleman. CRaG is not the whole extent of the scrutiny, and he did not mention that any changes a trade deal would cause to the UK system would need legislative change. For example, the Trade (Australia and New Zealand) Bill is going through the House at the moment, and it is giving ample time for scrutiny to all Members of the House. Will he say a little about some of the other scrutiny opportunities available?

Angus Brendan MacNeil

I thank the Minister for his congratulations and his kind remarks about consistency. What we find is that by that period it is too late. Things are very one-sided and the Whips are pushing things through. If we are to have a place for consideration we have to take the issue away from the partisanship that we have at that stage in the House. I think the Minister knows it could be done better. When the Prime Minister has said, in one frequency, that a deal is “one-sided”, surely that is a message that things could, and should, have been done better.

Ruth Cadbury (Brentford and Isleworth) (Lab)

I add our thanks to the Chair and his Committee for this important and timely report. One thing it rightly focuses on is the lack of a coherent trade strategy. The Committee has previously said that the approach of the Department for International Trade was “flat-footed”. Does the hon. Gentleman agree that we have not been helped by the fact that over the past three years we have seen Trade Ministers arguing with each other during ministerial questions, and one former Secretary of State spending most of her tenure obsessed with her Instagram posts and coffee orders?

Angus Brendan MacNeil

The hon. Lady tempts me down some interesting rabbit holes. I will not argue with any of the points she raises, and I agree with her on one specific point, which is that the call for a trade strategy from the Government is universal. It comes from all sides of the political spectrum and from everybody who comes in front of the Committee. They do not know what the UK Government are trying to achieve. It looks piecemeal and as if they want to come back waving bits of paper saying “trade deals in our time”, just for the sake of that piece of paper. The problem with that approach is that down the line in years to come, areas that have not been defended properly will see economic damage. 

What will the Government do about that economic damage when it comes? For instance, farming, fisheries and forestry will see damage from the New Zealand or Australia trade deals, but that is not being dealt with. That sausage factory approach is not good enough. In the end, people who have been damaged and suffered that loss will come complaining to their Members of Parliament—quite rightly. The Government do not realise this is coming down the line, but when it comes it is going to be sore.

Martin Vickers (Cleethorpes) (Con)

As a member of the International Trade Committee I endorse much of what the Chair has said, although he never loses an opportunity to attack Brexit, so we cannot entirely agree on everything. 

Does he acknowledge that there is a cross-party majority on the Committee who acknowledge that the relationship between the Committee and the previous Secretary of State caused problems? There is now an opportunity to reset that. Does he agree that a majority on the Committee want more free trade deals, and we want to do all we can to facilitate that while being a critical friend?

Mr Deputy Speaker (Mr Nigel Evans)

I used to be Angus’s vice-chair, and it is good to hear that nothing has changed as far as his views.

Angus Brendan MacNeil

Thank you, Mr Deputy Speaker—I remember many a ding-dong that we had on Brexit, as you may recall. I thank the hon. Member for Cleethorpes (Martin Vickers) for what he said. He is right—I point out the facts and numbers around Brexit, and they are not good. I compare Brexit to going to the horse-racing with £500 and coming back with trade deals worth £2 or £8 or whatever—we are still £490-odd down, but I will leave that there in deference to the hon. Gentleman. 

The hon. Gentleman is right that a majority of the Committee want to reset that, and under the circumstances in which we find ourselves, we want to see trade deals. The question is about the terms of those trade deals, and that is where the House should be involved. That is why we look at trade deals that the European Union might achieve with New Zealand or Australia, versus what we have achieved, and we must also remember the words of the Prime Minister, who said that those deals are “one-sided”. 

I was speaking to a member of the Trade and Agriculture Commission who said that—I had better phrase it this way—the Australia trade deal was the biggest giveaway of agricultural liberalisation that has been seen in any trade agreement. We should remember that free trade agreements are not about free trade; they are about bureaucratic trade, and they usually replace tariffs with bits of paper. There is nowhere where trade occurs as freely—to return to that word—as it did with the European Union before Brexit.

John Spellar (Warley) (Lab)

Members on both side of the House share some concerns about the performance of previous Trade Ministers—not only their attitudes to the way deals were conducted, but their relations with this House. May I also express disappointment with the position of the Committee, and perhaps strike a note that dissents from the general congratulatory tone? The Chair rightly identified the issue of questioning Government strategy, but I am not clear what the strategy and trade policy of the International Trade Committee is. I heard nothing in the contribution to outline a recognition that trade has been of enormous benefit to humankind over centuries, and particularly since the second world war, in bringing hundreds of millions, if not billions of people across the planet out of poverty, and nothing about the opportunities for trade. Those who argued for us staying in the EU were surely arguing about the benefits of trade. 

I also do not see any indication of the countries with which we ought to be doing trade deals, and I would like a response on that. If we are not able to do trade deals with countries such as Australia and New Zealand with which we share history, family, strategic, security and defence relations, who can we make agreements with? Please do not just tell me it is the EU. We need to look in government but also, I would argue, in the Committee, at having a consistent trade policy, and I look forward to that in future debates.

Angus Brendan MacNeil

I am grateful to the right hon. Gentleman —it is good to be criticised, because that forces people to look inwards and see exactly what is happening and what needs to be done. The role of the Committee is first to scrutinise and sometimes to help the Government, and indeed, as the Minister will know, perhaps to chide them. It is also to set the agenda at times—that alludes to other countries, as the right hon. Gentleman says. We can trade with countries without trade deals, but the terms of trade vary. We pay tariffs, and usually when we get rid of those in a trade agreement we have bureaucracy instead.

The right hon. Gentleman gives me the opportunity to raise an important point on the Floor of the House, which is about resources. He is asking the Committee to do more. Yes, the Committee can do more. We are aware we can do more, but we are very aware that our workload leaves a heavy burden on Committee staff. If he can add his voice to other voices to ensure that the Committee is well resourced, we will be eternally grateful to our critical friend on the Labour Back Benches.

Patrick Grady (Glasgow North) (Ind)

I regularly hear from constituents in Glasgow North who are concerned about the inability of many of us to effectively scrutinise trade deals. We are lucky if we get even a straight up or down vote on the whole proposition, rather than having any influence over the detail of those deals. Does the hon. Gentleman share my concern that this is another aspect of Brexit? We were told that Brexit was about taking back control for this House, and the restoration of parliamentary sovereignty, but what he describes in his report sounds an awful lot like an Executive power grab, where instead of Brussel bureaucrats it is Whitehall mandarins and unaccountable Tory Ministers deciding policy. Surely if the Government really believe in parliamentary sovereignty and the sovereignty of this House, they should adopt the recommendations in the Committee’s report in full.

Angus Brendan MacNeil

I thank the hon. Gentleman for his fair comments about empowering the House on trade deals. That should be welcomed, particularly by Government Members given that they are in the majority. It might also help better trade deals come into existence and be signed—trade deals that people can unite behind, rather than giveaway trade deals or, in the words of the Prime Minister, “one-sided” trade deals. I am not sure whether having revolving doors, with Secretaries of State or other Ministers going from position to position, really helps. It is good to see a retread, if I may be so gentle, because I think this is the Minister’s second or third time back—[Interruption.] The third time, with, I trust, a body of institutional knowledge coming back to the Department. 

There is a concern, however, that these things gain a momentum of their own. A previous Prime Minister—but which one? The one from Uxbridge—was desperate to see bits of paper being signed. There was that going on. 

I understand why the hon. Member’s constituents are frustrated. The House should have a say and have input. There are people out there who will be affected by trade deals, and they should have those concerns reflected in the House of Commons so that the negotiators can know, before they start to negotiate, what the difficulties are for certain parts of the UK and, when trade-offs are made, if the damage is to Welsh hill farmers for the benefit of City types in London, that is recognised in future fiscal transfers.

Mr Deputy Speaker (Mr Nigel Evans)

I thank Mr MacNeil for his statement.