Parliamentary round-up: trade and devolution, Gulf coast talks and Badenoch questions

Fri 24 Mar 2023
Posted by: Richard Cree
Trade News

View of facade of Palace of Westminster

This was billed by many observers as another “Boris Johnson week” in parliament. But aside from his lengthy hearing in front of the Privileges Committee, and the expected result in the vote on parts of the Windsor framework, there were some other proceedings relevant to the trade community this week. 

Trade and devolution

The Trade (Australia and New Zealand) Bill had its third reading in the House of Lords.

Lord Johnson of Lainston, minister at the Department for Business and Trade (DBT), argued that the bill provides improvements to existing procurement legislation in the UK, including benefits to public services and companies trading in Australia and New Zealand.

In doing so, the bill will unlock billions in government contracts in a more secure way than ever before. Johnson further outlined his belief that the bill would achieve the essence of the government’s post-Brexit vision of the UK.

He said trade deals such as this “guarantee a global interconnectedness” with the UK at its very heart. It would offer new opportunities for businesses and citizens and would create new markets for UK goods, but also open up new ways to travel and share cultures.

Lord Lansley asked if Johnson could confirm the bill incorporates procurement provisions into domestic legislation. This matters because while treaty making is a reserved power, procurement-related legislation is devolved.

Johnson replied he did not believe it was an issue because this bill covers procurement pertaining to a trade deal, so it is right that concurrent powers be initiated.

He added that consent has not been granted by the Scottish Parliament, the Welsh Senedd or the Northern Ireland Assembly (the latter because of the lack of a functioning executive).

Johnson said the government had sought to agree compromises with devolved administrations, but that no agreements have been reached. He reaffirmed the UK government’s commitment to consult devolved administrations before exercising the concurrent power in the bill.

Lord Howell of Guildford raised concerns about this refusal of consent, pointing out that foreign policy was a reserved matter under devolution which was passed through both houses. He added that as the UK seeks to strike up new trade deals, such as CPTPP accession, it is matters how parliament can best deal with the issue of devolved administrations and their role in trade policy, so deals can be discussed and debated democratically.

Johnson responded that the government has “made huge efforts to consult and engage with the devolved nations” as part of “good governance and communication” to ensure the devolved nations felt that they had a say in to this process.

In closing, Johnson said “the whole point of this bill and the trade deal it underpins is that it will lead to greater trade, more commerce and economic activity and greater wealth creation for the entire UK”.

The bill passed and has returned to the Commons, where further debate took place before it was passed. It will be returned to the Lords for considerations before being forwarded for Royal Assent.

A round of Gulf

Nigel Huddleston MP provided an update on behalf of the secretary of state for business and trade on the UK-Gulf Cooperation Council free trade agreement (FTA). Huddleston said the third round of negotiations for a deal between the UK and GCC had taken placed from 12-16 March.

The draft treaty text had been developed across most chapters, with technical discussions across 13 policy areas in 30 sessions.

There had been, he said, good progress with both sides remaining committed to an “ambitious, comprehensive and modern agreement.”

Huddleston said he and the government believe that the FTA represents a substantial economic opportunity and that this represents a massive moment in the UK-Gulf Cooperation Council (GCC) relationship.

Analysis by the UK government has shown that, in the long run, the deal could increase trade by 16%, adding £1.6bn a year to the economy and contributing £600m or more to the UK.

The fourth round of negotiations are expected to be held later this year in the UK. Huddleston said the government “remains clear that any deal we sign will be in the best interests of the British people and the United Kingdom economy”.

He added that the government won’t compromise on the UK’s high environmental, public health, animal welfare and food standards and will maintain their right to regulate in the public interest. He concluded that during the negotiations the NHS and its services have not and will not be on the table.

Question time

Kemi Badenoch, secretary of state for business and trade, answered questions from fellow MPs. Mary Glindon MP asked if Badenoch will take steps to publish a new industrial strategy. 

Business and trade minister Nusrat Ghani MP said that the Prime Minister has made clear that “growing the economy and creating better paid jobs is a top priority” and is working with industries to achieve this. She mentioned that twelve investment zones – announced in last week’s Spring Budget - could benefit from £80 million of investment over the next five years.

In response, Glindon asked what the Government's plan is to encourage business investment in the UK, and Ghani replied that the UK Government has published several industrial strategies and objectives and is striving to deliver on them. She also claimed that the UK is the leading country for start-up capital.

Jack Lopresti MP asked whether her department is taking steps to help increase trade with Ukrainian businesses.

Responding, Badenoch said support for Ukraine remains a top government priority. As an example, she pointed to her signing of the  UK-Ukraine Digital Trade Agreement on Monday, allowing for Ukrainian access to the UK financial services infrastructure, which will be critical to reconstruction work in the country.

Daniel Kawczynski MP asked for an update on CPTPP accession.

Badenoch answered by informing the House that the UK has reached an important stage in negotiations, but admitted that such negotiations are never easy, not least because the government wants to ensure UK food standards are protected. She added that the department is busy with the accession process and that she believes there will be some “good news” in due course.