My Lords, I start by thanking all noble Lords who have contributed to this debate. There have been some heartfelt speeches, with not a little similarity to those made during the recent passage through this House of the Agriculture Bill, as my noble friend Lord Caithness pointed out. I have been left in no doubt about the strength of feeling about the importance of environmental protection as it has been linked by Peers to trade. Some powerful speeches were made by many, including my noble friend Lord Sheikh, the noble Baroness, Lady Hayman, the right reverend Prelate the Bishop of St Albans and the noble Earl, Lord Sandwich.
I will first address Amendment 12, tabled by the noble Lord, Lord Grantchester, the noble Baroness, Lady Hayman, my noble friend Lord Duncan and the noble Lord, Lord Oates, which would stipulate that Clause 2 could be used only to implement trade agreements which are fully compliant with named international environmental obligations, including the Paris climate change agreement. We understand and share the public’s support for the UK’s high standards of environmental protection. The noble Baroness,
Lady Hayman, put it more eloquently and extensively than I, but there is so much to do when it comes to fighting climate change. However, this Government have already done a huge amount to protect and improve the environment.
Our departure from the EU offers a unique opportunity to design policies that drive environmental improvement with a powerful and permanent impact tailored to the UK’s needs. As set out in the 25-year environment plan, our ambition is to be the first generation to leave the natural environment in a better state than we found it. It is worth emphasising that we were the first major economy to legislate for net zero emissions by 2050. We are doubling our international climate finance spend to £11.6 billion by between 2021 and 2025. The UK has world-leading capabilities in areas including offshore wind, smart energy systems and electric vehicle manufacture. As I read my newspaper last week, I noticed that the sales of electric and hybrid vehicles recently overtook the sale of diesel vehicles, which is interesting progress. As your Lordships have already heard, none of our 20 signed continuity agreements has reduced environmental protection in any area, and nor will they.
The noble Baroness, Lady Boycott, raised three important concerns about FTAs which do not have standards included. I remind her that decisions on standards are not made in FTAs; they are domestic decisions which are and always will be made in Parliament. No FTA in itself has the power to change standards. Giving evidence to the Bill Committee in the other place, a representative of ClientEarth, a leading environmental law charity, described our approach to continuity as “sensible”. The Trade Justice Movement, the NFU, the Confederation of British Industry and others agreed.
Let me now address Amendment 14, tabled by the noble Lord, Lord Stevenson, and my noble friend Lady McIntosh. During the passage of the Bill in the other place, the Government were accused of attempting to deliver upcoming agreements which go far beyond our mandate for continuity. I emphasise that that is not the case and, as my noble friend Lord Lansley said, we have stayed true to our mandate of reproducing the original EU agreements, subject only to the technical changes required to make the agreements operable in a UK context.
In some areas, significant technical changes to agreements are required to make them work in a UK context. In these circumstances, the power would be used to make the necessary changes to UK domestic law to ensure that the obligations under the agreement are met. Let me give your Lordships an example: resizing quotas with a trading partner to reflect the fact that the UK comprises a different share of a partner country’s trade than did the EU.
Your Lordships will be aware that the Government have recently reached agreement in principle for a UK-Japan comprehensive economic partnership, which analysis shows could increase bilateral trade by £15.2 billion and offer a £1.5 billion boost to the UK economy. This agreement locks in the benefits of the EU-Japan deal and, picking up on my noble friend Lady McIntosh’s argument—and her hopes—goes even further in a number of areas, such as digital and
financial services. By excluding this agreement from the scope of the Bill, the amendment would deny UK business and consumers the benefits which the agreement will bring. Your Lordships will already be aware of the enhanced scrutiny package which we have provided, reflecting its status as an enhanced agreement. The Government do not need this power to negotiate or sign agreements, but to implement in domestic law the obligations which arise from them. The “substantially similar” standard is ambiguous and would, unfortunately, introduce an element of uncertainty to the scope of the power.
I will address Amendment 21, tabled by the noble Lords, Lord Oates, Lord Purvis and Lord Fox, and the noble Baroness, Lady Sheehan. We believe that it is not required—there, I have said it, which will not please the noble Baroness, Lady Northover, but I will give my explanations.
I have set out the Government’s commitment to maintaining the UK’s high standards of environmental protections and our ambitious targets for the future. In addition, of the 40 continuity agreements that we are seeking to make, every partner country has signed the Paris Agreement, although it has not yet been fully ratified by all partners. I remind your Lordships that this Bill cannot be used to implement any free trade agreement with the United States, as it did not have a free trade agreement with the EU on exit day. We have already said that we will bring forward separate legislation for new FTAs if required.
Turning to Amendment 22, proposed by the noble Lord, Lord Stevenson, while I understand the concerns that some noble Lords, including the noble Lord, Lord Grantchester, have raised about this power, without it our continuity agreements would be inoperable, which in turn would disrupt the trade flows on which businesses and consumers rely. This power is necessary. It is proportionate and constrained. It is proportionate because it allows solely for the amendment of primary legislation that is direct principal EU legislation or primary legislation that is retained EU law. Obligations in continuity agreements often fall into one of these two categories, which is why this power is needed.
The noble Lord, Lord Beith, said that he did not think that the Henry VIII power is sufficiently constrained and urged the Government to listen to, among others, the Delegated Powers Committee on the use of these powers. I was pleased to see—I hope that he will have seen it, too—that the Delegated Powers Committee in its 21st report expressed no concerns at all over the delegated powers in this legislation. In fact, I point out to the noble Lord that the committee has twice considered this and raised no concerns on either occasion.
On Amendment 40, tabled by the noble Lords, Lord Purvis and Lord Oates, and the noble Baroness, Lady Boycott, I can confirm that our continuity agreements and the underlying EU agreements on which they are based are in full compliance with the United Nations Framework Convention on Climate Change, the Convention on International Trade in Endangered Species of Wild Fauna and Flora and every other international environmental obligation named in the amendment.
Amendment 69, in the name of my noble friend Lady McIntosh, seeks to achieve similar outcomes to the amendments that we have already discussed. It would give Parliament a greater role in determining whether food, animal welfare and environmental standards have been weakened. It would also amend the Taxation (Cross-border Trade) Act 2018 to oblige Her Majesty’s Treasury to have regard to these standards when establishing tariffs and duties.
My noble friend Lord Trenchard spoke about unintended consequences and I draw your Lordships’ attention to two that the proposed new clause could have. The first relates to the impact on the developing world, from which we import a huge amount of food each year. Due to the predominance of agriculture in the economies of developing countries, increasing barriers to trade between these countries and the UK could have an exaggerated effect on the economies of countries with which we sign an FTA. It is not economically viable for firms in the developing world to produce goods to multiple sets of standards for different export markets. Higher standards inevitably lead to higher costs, which could in turn lead to less demand for products and exports from these countries.
The second unintended consequence is the disruption posed to UK consumers in the price and availability of foodstuffs. The effect of the amendment could be to disrupt agri-food imports provided under FTAs entering the country in the short and possibly longer terms, while also jeopardising relationships with friendly trade partners, who would be concerned about this unique and unilateral action. When it comes to developing countries in particular, the UK imports predominantly raw food and ingredients, such as tea, cocoa and bananas, among other things. Where these imports are included within FTAs, they would be required to prove that they meet the UK’s domestic environmental standards, among others, before they could continue to be exported to the UK, which would put businesses in developing countries at risk. It would also disincentivise developing countries from seeking new opportunities through FTAs with the UK. On the proposed amendment to the Taxation (Cross-border Trade) Act, I assure the Committee that consideration for food, animal welfare and environmental standards underpins government policy in every department.
On Amendment 73, I assure the noble Baroness, Lady Jones, that the UK will continue to be bound by those international multilateral environmental agreements —MEAs—to which it is party. The amendment, however, goes beyond the UK’s MEA commitments. It could prevent the UK from negotiating and agreeing international trade agreements with many countries at a time when the Government’s priority is to promote free trade as well as to improve the trade and export opportunities for sectors where increased trade can provide both economic and environmental and climate benefits. In other words, there is merit for us, as my noble friend Lord Trenchard mentioned. The proposed new clause could hinder both our trade and environment and climate ambitions by restricting the opportunities for dialogue with trading partners and limiting the constructive dialogue and good will that are key to making positive progress as the UK leads globally on climate change at COP 26 and more broadly.
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The noble Lord, Lord Grantchester, asked about continuity agreements and rolling over national treatment obligations, particularly for oil and gas. Many continuity agreements also roll over sustainability chapters of EU agreements, which are extremely high-standard provisions. The UK-South Korea continuity agreement is an excellent case in point. Our parliamentary report for that agreement reaffirms our firm commitment to the Paris Agreement.
My noble friend Lord Lansley asked about the expression “among other things”. I will do my best to answer his question. “Among other things” has been included to provide the flexibility needed to implement our international obligations. This does not provide a blank cheque, as the items listed in Clause 2(6) are conditions for how “among other things” is interpreted. For example, it would not allow the power to be used to modify primary legislation that is not retained EU law.
A number of noble Lords, including the noble Lords, Lord Judd and Lord Purvis, asked why there are no environmental protections on the face of the Bill. I remind noble Lords that this is simply a framework for the legislative implementation of continuity agreements. My noble friend Lord Lansley alluded to the fact that parliamentarians will debate and vote on the substance of continuity agreements through the use of the affirmative procedure on any implementing regulations.
My noble friends Lord Lansley and Lord Trenchard asked about underlying EU agreements and whether they are compliant with international standards. They made a number of sensible points, specifically the fact that this Bill is required only for the rollover of the EU trade agreements, which themselves are fully compliant with international obligations.
My noble friend Lady McIntosh made a good point about pushing future FTA partners to meet environment standards. I agree with her. That is why, specifically in reference to the US, we set out in our negotiating objectives our aim to ensure that the parties reaffirm their commitment to international standards on the environment and labour; to ensure that parties do not waive or fail to enforce their domestic environment or labour protections in ways that create an artificial competitive advantage; to include measures that allow the UK to maintain the integrity and provide meaningful protection of its world-leading environment and labour standards; to secure provisions that support and help further the Government’s ambition on climate change and achieving net zero carbon emissions by 2050, including promoting trade in low-carbon goods and services, supporting research and development collaboration, as well as maintaining both parties’ right to regulate in pursuit of decarbonisation; and, finally, to apply appropriate mechanisms for the implementation, monitoring and dispute resolution of environmental and labour provisions.
My noble friend Lady Noakes did us a service by bringing us back to our purpose. I again remind noble Lords that the powers in this Bill are needed to provide continuity of trading relationships with existing trading partners. Our record on environmental action is clear and I therefore ask for the amendments in this group not to be pressed.