Bill Esterson
MP for Sefton Central · Labour · United Kingdom
“As the Prime Minister said on Tuesday, our energy supply and our energy security are not a question of having either oil and gas, or renewables; they are about both. It is a great pity that proper process was not followed in 2022 or 2023. [ Interruption.”
“I warmly welcome my right hon. Friend’s commitment to continuing Britain’s global leadership on climate action, including by going to COP31. I also welcome his focus on breathing space for people and businesses, but, as he said, it will take a lot more than that to deliver the growth and reindustrialisation that he is so committed to.”
“Last week the Committee heard from Claire Dykta, the director of strategy and policy at NESO, who told us: “Operational decisions are taken by authorised, trained personnel only.” Her comments were confirmed by Alastair Martin, the chief strategy officer at Flexitricity, who, in the same session, said: “I do not think the idea that the he…”
“As the Minister has just said, new nuclear is essential for energy security. It is also essential as an alternative career for workers in oil and gas.”
“Paul and Susan Robinson each worked for the Health and Safety Executive for more than 40 years. They have not been able to plan for their retirement since finishing work last year; they have been living off their savings and the small loan that they have had. They are typical of the dozens of constituents who have contacted me.”
“Hudson primary school in my constituency does a brilliant job. It is a family hub, it specialises in support for children with SEND and autism, and it has a nursery, but its building, which is 80 years old, suffers from a high water table that brings damp, mould and structural problems for the building—as does occasional flooding.”
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“Traditionally, they have not been part of trade agreements, although we have seen in the draft text between the EU and Mercosur, for example, provisions for preferential access to Mercosur for eggs where the production standards have been equivalent to animal welfare requirements in the EU, which is interesting. This is a really important point: the UK Government should be seizing this moment to be a global leader in negotiating trade agreements that accommodate some of these sorts of policy areas, such as animal welfare, environmental impacts and climate change, and being creative and imaginative in how future trade agreements ought to look—not looking backwards and seeing how trade agreements have been done in the past, and merely looking to replicate those.”
“Q Coming back to what you were saying about the negotiation of the new Japan agreement, my understanding is that the existing EU-Japan agreement does not include animal welfare provisions. When it is renegotiated, are there implications for animal welfare and food standard provisions in the renegotiation of the new UK-Japan deal? Nick von Westenholz: There is the prospect of including those sorts of provisions in any of the deals that the UK Government are either currently negotiating or imminently going to negotiate. I am not sure that that is an issue specific to the continuity agreements. Countries all around the world are increasingly considering how such issues can be better accommodated in trade deals.”
“But, from our perspective as industry, while it remains vague, we can have anything, from the board or the non-executive membership merely providing an admin task—looking over the funding of the organisation, the remuneration of staff and so on—right through to it having influence on the recommendations that the organisation ultimately makes on anti-dumping and anti-subsidy measures. Therefore, while we have that ambiguity, industry is keen to see representation from a cross-sector of business. Everything from unions through to manufacturing interests and people who may be classified as trade remedies experts, who may have a slightly different view on trade remedies to industry, should be represented on that organisation to show there is a spectrum of views.”
“In terms of the non-executive membership selected by the Secretary of State and appointed by them and the chair, there is no stipulation about how, or where from within industry and wider society, those members will be chosen. That is an important point, because nowhere does the Trade Bill, the customs Bill or the secondary legislation actually define the role of the non-executive membership of the Trade Remedies Authority. All reference to decisions by the Trade Remedies Authority— recommendations to the Secretary of State—are referred to as, “The Trade Remedies Authority will do x or y.” Precisely what the role of those non-executive members is is still somewhat vague. I understand that the Government will have left it that way to provide maximum flexibility and to allow for the organisation to grow into its role and to find its feet.”
“I provide that case as an example to show that we have a very good working relationship with it . In terms of how well, practically, those investigations will operate on an ongoing basis, and whether we feel that we are getting a fair hearing, I cannot comment on that yet, in the sense that we really are at the very first stages of the first investigation. We have another two or three investigations to go through this year. If I was to comment again at the beginning of 2021, I would probably have a more informed opinion. To touch on the second question, about the membership of the Trade Remedies Authority, that is an important point. I would say that it is probably the only outstanding issue specifically within the trade remedies element of the Bill that we would still be pushing for reform of.”
“One critical issue is our ability as a sector to participate in trade remedies investigations, and particularly to finance them. I do not think it will be any surprise to people in the room that those cases cost an awful lot of money, particularly at this stage, when, frankly, industry in the UK does not have the same level of expertise that our European counterparts do. Bringing in external legal support and external consultancy has been critical, and our ability to do that as a sector has been severely disrupted by coronavirus. To put it bluntly, discretionary spend within many manufacturing companies, including in the steel industry, has effectively been halted. I say that to point out that we have asked for an extension with the TRA, and it has been as flexible as possible in providing us with an additional three months.”
“Q Good afternoon, Mr Warren and Mr Cranshaw; thank you for joining us. May I ask you about the Trade Remedies Authority? How is the Trade Remedies Investigations Directorate, which is the TRA’s current form as part of the Department for International Trade, performing? How is it working with your organisations? Added to that, could you both comment on the proposed membership of the TRA and on what that should be? Richard Warren, would you like to go first? Richard Warren: Certainly. We have a very good relationship with the organisation, as it currently exists within the DIT. There is only one live case—a case on welded tubes that are produced in Corby by Tata Steel, which I believe has been live for three months now—and we have had very good engagement with the organisation.”
“On the same token, if the board membership was made up exclusively of trade lawyers from firms that have exclusively represented exporting producers, one would say that the outcome of those investigations may be biased. On the opposite end of the spectrum, if you had the entire membership made up of people who had a more protectionist bent, again, that may result in a biased outcome. While we have ambiguity around the role of the non-executive membership, industry will err on the side of caution and say it should represent a range of views so that it can come to a balanced decision on whether those measures are in the interests of industry and the wider UK economy and its workers.”
“Q Before I ask Mr Cranshaw to answer the same questions, may I ask a follow-up, Mr Warren? How essential is it that the non-executive membership is drawn from people in different sectors of industries affected by trade remedies? Can this be done by expertise, without having those backgrounds? Richard Warren: To a certain extent, it depends, ultimately, on the role of the non-executive membership. If the non-executive membership functions as a board providing steering for how the organisation operates on an admin basis, you could say it was less important. If the membership has a high level of influence over the outcomes of those investigations and the recommendations that are made, we would say it is extremely important.”
“The chemical sector is focused in the north-west of England and the north-east, along the Humber—areas that require significant investment, and they need to know that they are competing on a level playing field. All of that, with a balanced view and a balanced board, would really help to ensure that all views and positions were reflected appropriately in policy development.”
“The second part of your question was about the make-up of the TRA board and how to achieve the balance. The Minister, Mr Hands, said that you do not necessarily invite people with a specific ideological position to the board—we really want trade experts. All that I would say is that trade experts are not necessarily trade remedy experts, and often that representation from the manufacturers or trade unions—some labour point of view; labour with a small “l”—generates and delivers real balance for any non-departmental public body that has to look at the entire scenario, certainly in a period when we are looking to build back better. I am not going to keep stealing other’s summaries of how we are trying to work, but the Government have already said that they want to rebalance the economy and put more investment in certain areas.”
“We have seen many of them, and we have had good exposure to many of the employees of the Trade Remedies Investigations Directorate. But the point I would make, and what that highlights, is that when they were developing that knowledge, who did they turn to for expertise and the nuance of how to carry out an investigation, how to assess the injury margin and how to build a case to prove that there had been inappropriate trade behaviour by a competing company or nation? That was really about turning to the manufacturers. One of our member companies has welcomed a continuous stream of TRID or TRA officials into their facilities, explaining how to build the case, because that case has to satisfy WTO criteria. It is a significant piece of work. Mr Warren mentioned the cost of building the case, and companies do not go into this lightly.”
“Q Thank you. Mr Cranshaw, please respond to the same questions and expand on what we have just heard from Mr Warren. Ian Cranshaw: We started this journey back in January 2017. Previously, I would have said that policy has moved quite quickly—that was before coronavirus, where, obviously, policy has been delivered in a matter of weeks or months. However, I think some credit goes to the Department for International Trade, which has gone from a standing start, with a handful of 30 or so trade policy experts on trade defence instruments within the EU. Now, we have a significant and very capable resource in the Department. At the same time, when the Trade Bill passes, they will establish the authority, which will have 100, growing to 130, staff whose level of expertise has grown significantly over the last three years.”
“Q Thank you very much. While we are talking to Mr Cranshaw—others may want to come back on the trade remedy point—I wanted to ask about chemical regulations and whether you feel that there should be something in the Bill to cover them, given their importance to your industry. Ian Cranshaw: Sorry, I heard that the question was about chemical regulation. Was it about whether chemical regulation is covered in the Bill?”
“Again, we have had a good hearing from the Government, but it is about the criticality of making sure that any deal with the EU—this is key for us—can include access to data sharing, because we do not need to replicate the testing of individual chemicals to build up a UK database when a perfectly functional database exists at the European Chemicals Agency. There is plenty of provision elsewhere for chemicals and chemicals regulations, and I do not necessarily think that it needs to be in the Trade Bill.”
“Do you think that it should be covered in the Bill? It is not, as it stands. Do you think that it should be, and why? Ian Cranshaw: There is an awful lot of work going on in chemicals, and the Government are keen to deliver a chemical strategy. That is something that DEFRA has covered over the past couple of years, and it is right that we have one. We have no issue with the amount of regulation on the chemical industry. We are dealing with sensitive products, and they ought to be regulated in the way that they are.”
“In the Bill specifically, a reference and an affirmation that unions will be consulted on the process of trade negotiations—as well as Parliament, which is crucial for democratic scrutiny—is key for us.”
“It has been indicated that we may get to see confidential material associated with trade negotiations on the condition of signing a non-disclosure agreement, but it is important to flag that the non-disclosure agreement is currently drafted so broadly that unions are concerned that it would limit what we are able to say in terms of our public advocacy. A balance needs to be struck between the legal restrictions placed on organisations and their ability to comment on the text of negotiations. We welcome the fact that it looks like the Government are taking some steps forward in consultation, but it is currently not in the shape that we think is adequate and we have concerns about the restrictions they might place on us. We seek engagement with the Government on that, as the TUC and unions going forward.”
“As an example, the US unions were able to comment on the USMCA labour chapter and add significant improvements that prevented, for example, restrictions on freedom of association in Mexico. We would want that process in the UK trade negotiations and so we would want the Trade Bill to outline and affirm that trade unions would be engaged in the process of trade negotiations and would be consulted on the text, and that that would be the process going forward, not just for the continuity agreements but for all agreements. We would obviously also want that for the UK-EU negotiations, which we have not had that engagement on. I would flag that there has been some movement in terms of Government consultation with members of the expert trade advisory groups that the unions sit on roughly half of.”
“In our partners in Europe—in countries such as Austria and Sweden—there is routine consultation with the Government on the negotiation offers in trade negotiations. Outside the EU, in countries such as the US, there is systematic and ongoing consultation by Government of the unions on the text that they propose. In the UK-US negotiations that have just been launched, we know that our US counterparts have seen a number of proposals that the US negotiators are putting to the UK Government. On the UK side, we have not seen any part of that negotiation so far. There is a much more meaningful engagement and a process whereby unions can comment on the text of the negotiations and have that input taken on board, which is very important, so there is a process whereby texts can improve to reflect what workers need in them.”
“Q Thanks very much for your written submission as well, Rosa. Perhaps you could spell out where in the world there are examples of the things that you say are missing from the Trade Bill that we could learn from, and what you would like done as part of the Bill to rectify some of the omissions you spelled out. Rosa Crawford: The TUC is in contact, and works very closely, with trade unions around the world, in advocacy for trade deals that promote good jobs and strong protection for workers’ rights and public services. We find that in other parts of the world, there is much more meaningful engagement between Government and trade unions, as well as with employers in trade negotiations.”
“We also have significant concerns about Colombia, which is one of the parties to the UK-Andean agreement. Colombia is listed by the International Trade Union Confederation as the world’s most dangerous country to be a trade unionist, with routine murders of trade union leaders, widespread repression of freedom of association and a real rolling back of rights, in contrast with the commitments made in the peace process by the Government. The fact that the agreement was signed, again without an effective enforcement mechanism on workers’ rights, is very concerning to us and indicates that these agreements will not be used to increase respect for workers’ rights, but will actually make it easier for companies to go to places where it is easier to exploit workers because human and trade union rights are not respected.”
“In South Korea, for many years we have been expressing concern, with trade unions in South Korea, that freedom of association has been routinely overridden, with trade unionists thrown in prison for peaceful protest for workers’ rights, including two union leaders imprisoned last year who were only freed after a concerted global campaign. Trade union offices are raided and exploitative conditions are prevalent in large Korean multinationals such as Samsung. The UK signed an agreement with them that has no enforceable commitment on workers’ rights within it. Although there is a mention of International Labour Organisation standards, there is no enforcement mechanism for that, and therefore there can be no reprisal through the agreement and no penalty for abuse of workers’ rights.”
“Q Thank you for that. There are a number of agreements—about 20—that have already been signed that are part of the set of continuity agreements. They were signed without the Bill being passed. Do you have concerns along the lines that you have just set out about some of the things that have gone through because of a lack of engagement in those agreements? Rosa Crawford: Yes. The TUC and unions were concerned about the fact that we were not consulted on any of those 19 continuity agreements before they were ratified and the fact that they were negotiated with countries where there are significant concerns about workers’ rights expressed to us by the unions in those countries. To give two examples, the UK has now signed continuity agreements with South Korea and Colombia.”
“Q Were enforceable rights included in those two countries’ previous agreements with the EU? Rosa Crawford: Trade unions have expressed concern that there was no enforcement mechanism in the EU agreements with South Korea or Colombia either. However, the EU is now engaged in a process of reviewing the enforcement mechanisms in its trade agreements— [ I naudible.]”
“We think it is very important to send a signal with the Trade Bill that the Government’s accession to the GPA will be linked with making sure that the highest social standards are embedded in our public procurement criteria, and that that will be used as a key component for selecting tenders—not just price, but quality and the overall investment in sustainable development, good jobs and strong protection for workers’ rights.”
“If there were concerted Government support for domestic manufacturing and domestic producers, and a preference was provided through the provisions in the GPA and through domestic legislation for providers who upheld workers’ rights and promoted the higher standards of workers’ rights, we would see more contracts going to UK manufacturers where there are strong trade union agreements, good protection for workers, decent pay and generally better conditions that promote a much more sustainable approach to business. Ultimately, there will be a better product for the public, which meets a public health need.”
“As we all know, all those gowns had to be impounded, as they did not reach NHS standards for safety. It is worth remarking that, in Turkey, there is extreme repression of workers’ rights. By choosing the contractor with the lower price and the lower protection for workers’ rights, it leads to a much worse result for the public, and obviously there is a cost as a result.”
“We would want the UK to go further than that and actually make it a compulsory criterion that the highest standards are used by contractors who receive public money, because that is the way to ensure that we get the best quality public services and provisions through our procurement arrangements. We are concerned at the moment that we do not have a rigorous enough process of selecting tenders that always have the highest social standards, and that has had a terrible impact on the quality of services that we get, so it has had real public health implications. With the pandemic that we are facing now, we have had cases such as the Government choosing to import 40,000 protective gowns from Turkey on the basis that they were presumably lower priced than gowns they could get from a country that has higher standards.”
“We know the Prime Minister and members of the Cabinet have talked many times in the past about wanting to repeal EU-derived rights around working time, agency workers directives and other important protections for workers’ rights. We are worried that that may be the direction of travel with procurement as well, which is why we seek an addition to the Trade Bill that states that the GPA schedule that the UK files will make sure that it at least replicates article 18(2) of the EU’s 2014 public procurement provisions, which makes it clear that social standards must be part of the criteria used for settling public contracts, and that contractors must uphold those international labour and environmental standards.”
“The UK’s Public Contract Regulations 2015, which you mentioned, transpose provisions in the EU procurement directive of 2014, which states that Governments must ensure that public contracts uphold international, environmental, social and labour standards. Importantly, those regulations also include provisions about a price-quality ratio, which is intended to ensure that public authorities select tenders on the basis of quality and positive social impact, rather than price alone. We are worried that once we leave any kind of relationship with the EU and we just have to rely on the UK’s public contract regulations, the UK Government may roll back on those commitments to promote social standards through the tendering process.”
“Q I wanted to ask you about the government procurement agreement and some concerns that you put in your written submission. Could you set out what your concerns are about the relationship between the GPA entities and the UK Government’s public contract regulations, which I think you say run out at the end of this year? Where does that leave us? Rosa Crawford: The TUC has confirmed that the Bill does not give assurance that the UK’s public procurement rules will promote respect for workers’ rights or environmental standards in its accession to the World Trade Organisation’s government procurement agreement. The GPA as it stands has no requirement for members to promote social standards in their tendering process.”
“Q Thank you very much for joining us, Mr Peretz. Could you just tell us your concerns about the scrutiny elements of the Bill as it stands? George Peretz: Did you say the scrutiny provisions?”
“There is the debate, with which Members are probably familiar, about the extent to which it is appropriate for there to be parliamentary scrutiny of free trade agreements. I can give you some thoughts on that, if you like. It is important with this Bill, however, to make that preliminary point.”
“The absence of scrutiny provisions in the Bill needs to be seen in that light: that the agreement that the Government negotiate with Canada or Japan, for example, might look somewhat different—in fact, there is every reason to think that they probably will look somewhat different—from that which both countries entered into with the EU, most obviously because for those countries, an agreement with the United Kingdom is not the same as an agreement with the EU—it is a different market. Both countries will have different objectives and concerns in relation to the United Kingdom from those they had when negotiating with the much larger EU. When one looks at the provisions of the Bill, which essentially do not provide much scrutiny at all, it is important to have that background in mind.”
“The scrutiny elements of the Bill. George Peretz: Yes, I thought I had heard it correctly. The first point to make is that the scope of the Bill, as set out in clause 1, is clearly confined to agreements with countries that had either a free trade agreement or an international package agreement with a free trade agreement with the EU before exit day. In that sense, it is limited, but none the less it is not quite right to portray it as simply a roll-over Bill, because the Bill does not prevent the Government from entering into an agreement, with a country that had such agreements with the EU—such as Japan or Canada—that is significantly different from the agreement that that country had with the EU before the United Kingdom left the EU.”
“Q Are there examples where a lack of parliamentary scrutiny has caused problems? Have agreements gone through with clauses in them that have caused difficulties? George Peretz: In this country, or elsewhere?”
“As a lawyer, one is quite familiar with a situation where one is in negotiations with the other side and it is actually quite helpful sometimes to be able to say, “I’m afraid my client is very unreasonable; I simply can’t accept that.” That is quite a useful way of resisting certain types of pressure, and I think the same is true in trade negotiations, so it is another advantage of scrutiny.”
“Also, the Government can quite often control agreements by secondary legislation anyway. But that can be a bit of a problem, and the TTIP negotiations turned out to be one. Another issue with lack of scrutiny is much more difficult to find examples of, because it is not something from the textbook of finding examples. None the less, it is a fact, which people involved in trade negotiations fairly freely acknowledge, that it can be quite helpful to a Government to be able to say, “We are under scrutiny from our Parliament. We simply cannot make concession X, because we have discussed this with our own Parliament and know very well that it’s going to be very controversial; it’s going to be very difficult for us. We simply can’t do it.” That can be quite a useful negotiating tactic.”
“Particularly once you move away from tariffs into other areas, agreements now require a lot of potentially important decisions on questions such as how matters of food safety are regulated, or the terms on which professional and other types of services are regulated, like auditing. Those are very sensitive indeed; they can profoundly affect both the public generally and particular interests. So there is always the risk that, if an agreement has not been scrutinised properly at an early stage, a Government will go too far and then not be able to get the necessary legislation through Parliament. That is less of a risk inherent in our system, particularly in the present Parliament, given that the Government have a healthy majority, so it is not politically that likely.”
“Either would be good. George Peretz: I am just trying to think of an example. I suppose a case that ran into trouble, at least in part because it was accepted that there was not adequate scrutiny at an early stage, was negotiations between the EU and the United States on the transatlantic partnership agreement. Essentially—you would have to ask someone else for the precise detail—the EU side ran at what the European Parliament and member states were prepared to accept. That is one potential difficulty. The issue with free trade agreements now, compared with what they looked like in the 19th century, when Richard Cobden could trot off to Paris to negotiate a free trade agreement with Napoleon III in a week or so, which involved a few tariff reductions, is that they are a lot more complicated than that now.”
“There is a case for the non-executive directors having to fit a number of those criteria; it is always desirable for there to be a diverse group of people on bodies such as this, because diversity brings strengths of its own. To focus on the particular task of this body, it is almost certainly helpful to have people who have experience of industry, because they will understand a lot of the issues and concerns that the TRA will have to grapple with. It would be helpful for some of the board to have backgrounds in law and in economics, because those are essential aspects of the TRA’s work, and it helps to have people right at the top who are familiar with such things.”
“And there is the essentially political job of assessing the public interest, which is carried out by the politicians, who are directly accountable to you in the House of Commons. That seemed to me to be a sensible divide, and that is what the Government have done. That division of competence seemed to me to be broadly right. A final point about the composition of the Trade Remedies Authority, going back to what I just said, is that the TRA’s job is in large part a technical one. It has to make a series of quite difficult legal and economic judgments that are essentially technical ones, but it does have a job of assessing the economic interests of the United Kingdom, which involve somewhat wider criteria.”
“We will never know whether it was right about that, but I think it would have created a set of legal issues that probably everyone could have done without if trying to— [Inaudible] — effective trade remedies. It will certainly be better if, at the end of transition, when all this comes into play, there is a strong remedies authority in existence, doing the job that the 2018 Act gives it. The structure of the 2018 Act did seem to me sensible. I wrote an article that laid out the— [Inaudible . ] It is the largely technical task of looking at the potentially legal point— [Inaudible] — a factual question about whether the various tests of dumping, subsidy domestically and so on have been met, through an independent authority that would be able to assess those reasonably objectively. It is charged with those functions.”
“It is plainly an unsatisfactory situation if you have a whole set of powers in one Act of Parliament that are conferred on an authority that does not actually legally exist, because the legislation that sets it up has not at that stage been passed. That is what happened with the Trade Bill in the last Parliament. It is a bizarre situation, which is bound to create legal problems of one sort or another. There would have been challenges, no doubt, to the validity of the decisions taken by the Secretary of State, given that the mechanism by which he took them had no satisfactory statutory basis. The Department for International Trade told the world that the mechanism that it had adopted to get round that problem would have been sufficient to deal with it.”
“Q May I ask about the Trade Remedies Authority? I think you said that that was one of your areas. There are two things to ask, really. We have the trade remedies investigations directorate currently carrying out the functions of the Trade Remedies Authority, which were passed in the Taxation (Cross-border Trade) Act 2018. First, is it absolutely essential that the Trade Remedies Authority is created, given that it seems to be functioning already? Secondly, whether it is in its current format within the Department or is the Trade Remedies Authority, how important is it that the non-executive representatives have expertise as representatives of parts of the economy? George Peretz: On the first question, plainly an unsatisfactory situation would have happened, had the United Kingdom left the EU with no deal last year.”
“Q Thank you for joining us, Mr Walker. Belated congratulations on your appointment. Please tell us your views on the level of parliamentary scrutiny of the continuation international trade agreements that are covered by this Bill, and whether you think it is adequate. Simon Walker: I am not sure that falls within the purview of the Trade Remedies Authority to be. It seems a broader question than that. The TRA’s decisions will be subject to parliamentary scrutiny, because the final decision maker on our recommendations is the Secretary of State. If she rejects our recommendation, she must table her reasoning before Parliament.”
“Q Yes, sorry. I was asking whether you have a view, as the continuity agreements are a significant part of the Bill,—as is the TRA, which we will come on to. Do you have anything to say on that part of the Bill? Simon Walker: I do not think I do, to be honest.”
“I cannot pretend that it will always be cheap to lodge a claim with the TRA, because it will require quite a lot of legal and technical expertise, so I would not want to over-sell that. It is a very substantial meta-seeking recommendation from us on the base of anti-dumping and fair subsidies or the need for an economic safeguard. It is a major intervention in economic process that I think justifies significant resource going into it.”
“Q That is fine. Turning to the Trade Remedies Authority, which currently operates as the Trade Remedies Investigations Directorate, in evidence we have already heard, a comment was made about industry’s ability to properly fund its contributions to your investigations. Could you say something about ensuring that investigations can be conducted properly? I think there is only one underway at the moment, so that was the one the comment was made in relation to. Simon Walker: There are two underway at the moment, which are both transition agreements. One is about welded steel and tubes, and the other is about rainbow trout. Those two transition arrangements are in process at the moment.”