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Chamber and committees

Meeting of the Parliament

Meeting date: Tuesday, March 14, 2023

Agenda: Time for Reflection, Topical Question Time, Trade (Australia and New Zealand) Bill: United Kingdom Legislation, Net Zero: Local Government and Cross-sectoral Partners, Business Motions, Parliamentary Bureau Motion, Decision Time, International Long Covid Day


Trade (Australia and New Zealand) Bill: United Kingdom Legislation

The Presiding Officer (Alison Johnstone)

The next item of business is a debate on motion S6M-08205, in the name of Ivan McKee, on the Trade (Australia and New Zealand) Bill, which is United Kingdom legislation. I would be grateful if members who wish to speak in the debate would press their request-to-speak buttons now.


The Minister for Business, Trade, Tourism and Enterprise (Ivan McKee)

It is with no small amount of regret and frustration that we find ourselves today considering this motion. Yet again, it appears that the UK Government is willing to play fast and loose with devolution and to pay little heed to the democratic role of this Parliament in scrutinising law made in devolved areas.

The Trade (Australia and New Zealand) Bill would provide UK ministers with a delegated power to legislate directly on devolved matters in Scotland, bypassing the Scottish Parliament and the Scottish ministers entirely. The one thing for which we can be grateful is that, despite its grand-sounding title, the bill has a relatively narrow focus.

Our views on the trade deals that the UK Government has agreed with Australia and with New Zealand are well known. The Scottish Government had no direct role in negotiating the deals and we are concerned about the impact of both agreements, particularly with regard to agri-food. However, that is not today’s focus. The bill is solely about the implementation of the Government procurement chapters of those agreements.

As a result of the agreements, amendments are needed to procurement legislation to extend duties of equal treatment to bidders from Australia and New Zealand and make some minor amendments to procedural rules.

Procurement is, of course, a devolved matter. The UK Government has opted in the bill to confer a power to make those amendments by secondary legislation. That power is drafted too broadly and, of greater concern, would be exercisable concurrently by both UK and Scottish ministers, which means that UK ministers would be able to exercise it in devolved areas without securing the consent of the Scottish ministers.

The bill also allows for the implementation of future amendments to the Australia and New Zealand agreements. That is a curious provision to include when the agreements have only just been reached. The power is expected to be repealed by the UK Government’s Procurement Bill in the coming months.

The Scottish Government’s legislative consent memorandum did not recommend consent to that, and the subsequent report by the Economy and Fair Work Committee, which I thank for its efforts, concluded that there should be a means for the Scottish Parliament to scrutinise regulations laid by the UK Government that fall within devolved competence.

Officials and I have engaged with counterparts in the UK Government over many months in an effort to address those concerns. I met the UK Minister for International Trade in early December and have written to him twice since then. I also met the relevant UK Government minister earlier today.

We have suggested three different ways in which the bill could be appropriately amended. The first option would be to make the provision that is necessary to implement the agreements in the bill, which would allow the Scottish Parliament to consider precisely what it might be consenting to. The second option would be to amend the power so that it is conferred solely on the Scottish ministers in relation to devolved matters. The third option would be to introduce a statutory requirement for UK ministers to secure the consent of the Scottish ministers before exercising the power in relation to devolved matters. Those are entirely reasonable and practical suggestions, which the UK Government has rejected out of hand.

The UK Government’s view, which I do not accept, is that it must maintain a power by secondary legislation to implement international obligations to ensure that they are complied with. However, such a view implies that, of the two Governments, it is the Scottish Government that has difficulty with the rule of international law. I do not think that that is a conclusion that many observers would draw right now. Indeed, the Scottish Government has successfully implemented our international obligations in relation to procurement separately from, and sometimes differently to, the rest of the UK for almost 20 years. At no point has any question mark ever been raised over our compliance with international obligations.

I agree with the frustrations that the minister has set out. What attempts has he made to have dialogue with the UK Government and UK ministers to discuss the issues and find a way through?

Ivan McKee

As I indicated, I have written twice to UK Government ministers. I met the relevant UK Government minister in the Commons previously and, today, I met Lord Johnson, the relevant UK Government minister in the Lords, to discuss the issues. In addition, officials have had extensive interaction on all the issues over some time.

The UK Government approached us with what it described as a compromise proposal. That is something that we have discussed with it through the dialogue that I mentioned. If we were willing to recommend consent to the bill, it would be willing to amend the bill so that the power would become exercisable by UK ministers in relation to devolved matters only if the Scottish ministers asked the UK ministers to legislate on their behalf, which would clearly be acceptable to us, or if, following a request from UK ministers, the Scottish ministers had failed to legislate within 15 days.

Although we might have been able to secure an improvement on the idea that the Scottish ministers would have only 15 days from the arbitrary date of any such request in which to consider, draft and make any legislation—a ludicrous proposal, of course—the UK Government was clear that it would not budge on the issue of consent. It is a significant matter of principle, so I was unable to agree to the UK Government’s proposal.

We have not ended up in this situation due to a lack of effort on our part. However, as long as the bill contains provisions to allow UK ministers to legislate in a devolved area without first seeking the consent of Scottish ministers, I cannot recommend that the Scottish Parliament give its consent to the bill. I believe it is worth noting that the Welsh Senedd has withheld its consent to the bill, as it falls under its legislative competence.

I move,

That the Parliament notes the legislative consent memorandum lodged by the Scottish Government on 13 June 2022; agrees not to give consent to the Trade (Australia and New Zealand) Bill, and calls on the UK Government to amend the Bill to confer the power in clause 1 solely on the Scottish Ministers in relation to devolved matters, or to otherwise make it a requirement for it to secure the consent of the Scottish Ministers when making provision within the legislative competence of the Scottish Parliament, in order to properly respect devolved responsibilities.


Daniel Johnson (Edinburgh Southern) (Lab)

Before I say anything, it is important to set out that, our issues with the Australia and New Zealand trade deals notwithstanding, trade is undoubtedly a good thing. Regardless of the current circumstances, we should encourage trade and look for opportunities to trade, especially with places in the world such as Australia and New Zealand, with which we share interests and a common history. However, we need to remember that the Australia and New Zealand deal was deeply flawed and that, in the absence of an oven-ready deal, it was rather snatched and grabbed at by a UK Government that was desperately seeking upsides to the flawed Brexit that it sought to deliver.

We have much sympathy with the arguments that the Scottish Government sets out. It is important that there is a role for devolved Administrations and Parliaments in approving and devising trade deals. Those arguments have been made by Nick Thomas-Symonds and other colleagues in the House of Commons. We sought to make several amendments to the bill as it went through. I note that in many other jurisdictions—such as in Belgium—devolved Administrations and legislatures have formal roles in the approval of trade deals. The ability of the UK Government to make amendments without consultation is of particular concern if there is to be a refresh of the trade agreement. It essentially gives ministers carte blanche.

Notwithstanding all that, the Government’s motion raises concerns. Although we agree that there should be consultation with people in Scotland, it is no more acceptable for Scottish ministers to make decisions behind closed doors—decisions that could have a significant bearing on farmers and fruit producers—than it is for UK ministers to do so. If it is a matter of concern to the people of Scotland, it is Parliament that should be consulted on such decisions. It is not so difficult for the Scottish Parliament to pass secondary legislation or legislative consent motions. We can do so relatively easily, and it gives us that level of oversight.

People might not want to know about the details of something that is relatively obscure and not relevant to their everyday life, but, ultimately, it is important. People in Scotland are growing weary of two Governments that constantly seek to make constitutional rancour and disagreement the fundamental basis of their politics, rather than getting on in order to make progress. We want to see two Governments working together for the collective good. Regardless of one’s views on the constitutional arrangements, the Administrations in Edinburgh and London—whoever they may be—need to work together in the collective interests of the people who live in these islands. That is not what is happening now.

I move amendment S6M-08205.1, to leave out from “confer” to end and insert:

“ensure the referral of the use of powers in clause 1 to the Scottish Ministers when making provisions within the Scottish Parliament’s devolved legislative competence, or to otherwise make it a requirement for UK ministers, when making provision within the legislative competence of the Scottish Parliament, to be subject to the scrutiny and approval of the Scottish Parliament, in order to properly respect devolved responsibilities.”


Jamie Halcro Johnston (Highlands and Islands) (Con)

I draw members’ attention to my entry in the register of members’ interests; I am a partner in a farming business in Orkney and a member of NFU Scotland. I am also a member of the Economy and Fair Work Committee, which considered the LCM. I thank the committee clerks for all their efforts in drafting our report.

The debate is largely a matter of process, as has been discussed. I would like to start with the bill itself. The two free trade agreements are the first from-scratch deals that the UK has negotiated since we left the EU. They are historic and reflect the deep social, familial and economic bonds between our three countries. They will strengthen our trade with Australia and New Zealand and will deepen our ability to access their markets. They could pave the way for the UK to join the comprehensive and progressive agreement for trans-Pacific partnership.

The Australia deal will see tariffs removed on all UK exports and will be a real boost for Scottish products, including those from the iconic whisky sector and from our fashion sector. The animal welfare charter, with its non-regression clause, will prevent any roll-back on welfare standards. The deal will make it easier for people to operate in each other’s economies. It will also remove visas, allowing young people from Scotland to travel and work in Australia for up to three years at a time.

The New Zealand deal will also see tariffs dropped on all products and red tape slashed for the nearly 6,000 UK small and medium-sized enterprises that export goods to the country—businesses that employ nearly 250,000 people across the UK. Scottish exporters will now have an advantage over international rivals in a market that is expected to grow by 30 per cent by the end of the decade.

The UK Government estimates that the free trade agreement with Australia could increase trade between the two countries by 53 per cent, with an increase in gross value added of almost £120 million. The UK-New Zealand deal could increase trade by 59 per cent. Business across the UK and Scotland will benefit.

The bill implements the procurement chapters of the two deals into UK domestic law, ensuring that the UK is not in breach of its obligations as the agreements come into force. Although the UK Government’s intention is that, in the future, a power in the Procurement Bill will allow procurement provisions in international agreements to be implemented, legislation is needed now in relation to these two agreements, because they must be implemented before the Procurement Bill is likely to come into force.

As the Economy and Fair Work Committee’s report on the LCM states, there was agreement from members on a number of issues around scrutiny of the bill and an acceptance of the need for both Governments to engage constructively. However, my colleague Graham Simpson and I could not agree with the committee’s recommendation that the powers be conferred solely on Scottish ministers or that UK ministers should be required to obtain consent from Scottish ministers.

The UK Government has made commitments to the devolved Administrations to not normally legislate within devolved areas, and when it has to, not to do so without consultation. However, it is important that, as international relations is a reserved matter, the UK Government is able to legislate to meet international obligations. If consent was put into statute, which I know some members want, it could discourage more consensual intergovernmental working and risk disagreements being decided in more lengthy and expensive court action.

There is also a risk that consent may be withheld for political reasons, or that the Scottish Government might seek to create arguments for purely political gain. I know that that suggestion may come as a shock to many members in the chamber. During our membership of the European Union, the Scottish Government was content for many of the powers that it now disputes to be held in Brussels, and presumably, given its position on EU membership, it would be happy to have them invested in Brussels again.

Does the Scottish Government have a genuine concern over these powers, or is it less about concerns about the bill and more about stoking constitutional grievance? Is it that, as the sun sets on this First Minister’s time in office, the last act of this Administration will be to leave us one last hurrah of divisive grievance politics?

Is it that the Scottish National Party does not like trade deals? The SNP has never supported a trade deal negotiated by the UK or the EU. It did not support the deals with Canada, Japan, Ukraine, South Africa, Singapore or South Korea. It even voted against the trade deal between the UK and the EU, and it was content for us to leave the EU with a no-deal Brexit.

The UK Government has negotiated important deals with the Governments of Australia and New Zealand. As I have outlined, they will benefit people and businesses across the UK and across Scotland. They include important protections for key sectors and in areas such as animal welfare. The Scottish Conservatives support these agreements, and we will do so by opposing the SNP’s grandstanding attempts to block them today.


Willie Rennie (North East Fife) (LD)

Jamie Halcro Johnston deserves a medal for his contribution and for drawing some great credit from the two trade deals with New Zealand and Australia. They are the only tangible so-called benefit that we have had from Brexit in six and a half years. Not even George Eustice has recognised the benefit of the trade agreements with Australia and New Zealand. In fact, he criticised them even though he was the minister who, in part, negotiated the deals.

I would have hoped that Jamie Halcro Johnston could have perhaps acknowledged that this is a pathetic set of trade deals. Of course we support free trade, and of course the opportunity to export across the world benefits Scottish and UK producers, but to hold the bill up as a great success is not realistic, and I think that Jamie Halcro Johnston truly knows that.

We will support the motion at decision time. There should be greater scrutiny by and involvement from the Parliament, and there should be greater partnership between the Scottish and UK Governments on trade deals, so it is disappointing that we are here again with the same old song.

We support Labour’s amendment. We think that it is appropriate for the Parliament, not just the ministers, to have the power. In fact, the Scottish Government has criticised UK ministers for holding on to powers when there should be scrutiny by the Parliament.

However, it is depressing—utterly depressing—that, once again, we have two Governments that seem to be incapable of agreeing between themselves on an important area. Perhaps that is an area of process, but it is nevertheless important for people’s livelihoods. For the wit of man, we should be able to get the two Governments to work together to work up an arrangement for scrutiny by the Scottish Parliament and the Scottish Government of any international trade deals. As Daniel Johnson has highlighted, other countries manage to do that, so why can we not do that as well?

It is perhaps the fact that, over the past 15 years, the Government has taken every single—often cheap—opportunity to attack whoever is in power at Westminster. Perhaps that has led to this day. The relationship has broken so badly that both sides are incapable of agreeing. That is why we need reform of the United Kingdom and a change of Governments both north and south of the border.

We need free trade and co-operation between the two Governments for the sake of the businesses that produce excellent-quality products. They deserve to be able to export those products across the world. However, they also deserve to have politicians in the Parliament scrutinising trade deals, applying our expertise to them, and ensuring that they are fit for purpose. However, once again, we have two Governments that have let us down and that have been incapable of reaching agreement. I hope that, one day, we will manage to get some co-operation, although I suspect that that day may be some time away.


Ivan McKee

What an interesting debate. I agree with Daniel Johnson that trade is a good thing. If he has read our “A Trading Nation—a plan for growing Scotland’s exports”, he will be well aware that that is stated right up front and centre. He will be well aware of the trade missions that I relentlessly undertake on behalf of Scottish businesses—I am off on another one next week, to Poland with Edinburgh Chamber of Commerce. If he is paying attention, he will be aware that, as part of those trade missions, I engage with the UK Government Department of Business and Trade—it is no longer the Department for International Trade—UK ambassadors and UK trade commissioners. We work together closely, where that makes sense, to support Scottish business.

Daniel Johnson talks about the benefit of trade. He will be aware that Brexit has, of course, done the biggest harm to trade. His party still supports that policy, and it has, for some bizarre reason, been unable to bring itself to recognise the faults of Brexit as it seeks to become the next UK Government.

A formal process exists in other subnational Governments, of course. We have proposed such a process to the UK Government from the outset of Brexit in 2016, with policies that we have put forward. We have relentlessly attempted to engage with the UK Government on a more structured mechanism, but it has refused to engage on that.

On accountability, the Scottish ministers are, of course, accountable to the Scottish Parliament. As Daniel Johnson knows, the process is that the Scottish Government would take forward proposals, but it would bring them to the Parliament or a committee as appropriate, and Parliament would, of course, have the ability to scrutinise decisions. The point is that, despite what Willie Rennie says, it is not through our lack of trying that trade deals are not coming here to be scrutinised by the Parliament; that is because of what the UK Government has decided to do.

Will the minister take an intervention?

Despite the fact that Jamie Halcro Johnston powered through and did not take any interventions, I shall, in the interests of open debate, take Brian Whittle’s intervention.

If the minister and his Government are so positive towards trade, why have they voted against every single trade deal that has been put in front of them?

Ivan McKee

If Brian Whittle has been paying attention, he should be well aware that the Australia and New Zealand deals were very bad for Scottish agribusiness. If we look at the Brexit deal, we see that we should be back as part of the European Union and having free trade as a consequence of that. We are very much in favour of that.

We will take each trade deal on its merits. Trade deals, as Brian Whittle should know, are a balance of the offensive and defensive. If we think that Scottish business is being harmed by the UK Government rushing headlong into random trade deals, we will vote for Scottish interests.

Willie Rennie and Daniel Johnson make the point that we should engage with the UK Government, and I have made it very clear that we have done so. In fact, this afternoon, we had a constructive conversation with Daniel Johnson’s namesake, Lord Johnson, about our working together to secure an investment, but that does not take away from the fact that the UK Government has dug its heels in on the point and is denying the playing out of the devolution settlement through the powers of the Scottish Parliament and the Scottish ministers. If Willie Rennie needed any more examples of the Conservative Party’s unwillingness to engage on the process, the fact that Jamie Halcro Johnston would not take a single intervention from anybody in the chamber speaks to that.

To reflect on a point that Jamie Halcro Johnston made, it is not about Brussels. When we were in the European Union, those powers were not held in Brussels in the way that they are being held at Westminster at the moment. EU procurement directives were implemented by Scottish ministers and not by the European Union. That is the difference. When we were part of the European Union, the powers were here; now that we are not in the European Union, the UK Government has taken those powers back and it is therefore encroaching on devolved areas, such as procurement.

In conclusion, we are not happy that we are in this situation, but I hope that everyone on this side of the chamber will agree that devolution must be protected and that it is important that we protect it when there is an attack from the UK Government. This is one of the unfortunately increasing number of examples where that is the case.

That concludes the debate on the Trade (Australia and New Zealand) Bill, which is United Kingdom legislation.