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Public Bill Committees

Debated on Tuesday 23 January 2018

Space Industry Bill [ Lords ] (First sitting)

The Committee consisted of the following Members:

Chairs: †Mr Adrian Bailey, Mr Peter Bone

† Bowie, Andrew (West Aberdeenshire and Kincardine) (Con)

† Churchill, Jo (Bury St Edmunds) (Con)

† Coyle, Neil (Bermondsey and Old Southwark) (Lab)

† Double, Steve (St Austell and Newquay) (Con)

† Doughty, Stephen (Cardiff South and Penarth) (Lab/Co-op)

† Ford, Vicky (Chelmsford) (Con)

† Foxcroft, Vicky (Lewisham, Deptford) (Lab)

† Garnier, Mark (Wyre Forest) (Con)

† Graham, Luke (Ochil and South Perthshire) (Con)

† Green, Chris (Bolton West) (Con)

† Johnson, Joseph (Minister of State, Department for Transport)

† Monaghan, Carol (Glasgow North West) (SNP)

† Morris, David (Morecambe and Lunesdale) (Con)

† Murray, Mrs Sheryll (South East Cornwall) (Con)

† Ruane, Chris (Vale of Clwyd) (Lab)

† Turley, Anna (Redcar) (Lab/Co-op)

† Turner, Karl (Kingston upon Hull East) (Lab)

† Whitford, Dr Philippa (Central Ayrshire) (SNP)

Williamson, Chris (Derby North) (Lab)

Mike Everett, Jyoti Chandola, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 23 January 2018

(Morning)

[Mr Peter Bone in the Chair]

Space Industry Bill [Lords]

We are now sitting in public and the proceedings are being broadcast. Before we begin, everyone should ensure that their electronic devices are turned off or switched to silent mode. Tea and coffee are not allowed during sittings because they are hot drinks. I also remind Members that they need to declare any relevant interests publicly. They can do that now, if they wish, or when they first rise to speak. Does anyone wish to declare any interests?

Thank you.

Today we will consider the programme motion on the amendment paper, then a motion to enable the reporting of written evidence for publication.

Ordered,

That—

(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 23 January) meet—

(a) at 2.00 pm on Tuesday 23 January;

(b) at 11.30 am and 2.00 pm on Thursday 25 January;

(c) at 9.25 am and 2.00 pm on Tuesday 30 January;

(2) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 12; Schedule 1; Clauses 13 to 17; Schedule 2; Clause 18; Schedule 3; Clauses 19 to 21; Schedule 4; Clause 22; Schedule 5; Clauses 23 to 40; Schedule 6; Clauses 41 and 42; Schedule 7; Clause 43; Schedule 8; Clauses 44 and 45; Schedule 9; Clauses 46 to 59; Schedule 10; Clauses 60 and 61; Schedule 11; Clauses 62 to 66; Schedule 12; Clauses 67 to 71; new Clauses; new Schedules; remaining proceedings on the Bill;

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 30 January. —(Joseph Johnson.)

Therefore the deadline for amendments to be considered at the first two line-by-line sittings has passed. The deadline for amendments to be considered at the third line-by-line sitting is the rise of the House on Thursday.

Ordered,

That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Joseph Johnson.)

We now begin line-by-line consideration of the Bill. Today’s selection list is available in the room and on the Bill website. It shows how selected amendments have been grouped together for debate. Grouped amendments are generally on the same or a similar issue. A Member who has put their name to the lead amendment is called first. Other Members are free to catch my eye to speak on all or any of the amendments in that group. A Member may speak more than once in a single debate.

At the end of a debate on a group of amendments, I shall call the Member who moved the lead amendment again. Before they sit down, they need to indicate whether they wish to withdraw the amendment or press it to a Division. If a Member wishes to press any other amendments or new clause in a group to a vote, they need to let me know. I shall work on the assumption that the Minister wishes the Committee to reach a decision on all tabled Government amendments.

Please note that decisions on amendments do not take place in the order that they are debated, but in the order that they appear on the amendment paper. In other words, debate occurs according to the selection list, and decisions are taken when we come to the clause that the amendment affects.

I shall use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following debates on relevant amendments. I hope that that explanation is helpful.

The Committee has just agreed a programme motion, which will be reproduced on the amendment paper from tomorrow. The motion sets out the order in which we will consider the Bill.

Clause 1 ordered to stand part of the Bill.

Clause 2

Duties and supplementary powers of the regulator

I beg to move amendment 13, in clause 2, page 2, line 25, at end insert—

“(ea) the effect on the environment and on local communities of activities connected with the operation of spaceflight activities or the operation of a spaceport as licensed under this Act;”

This amendment adds impact on the environment and local community activities to the list of areas the regulator should take into account when exercising functions under this Act.

With this it will be convenient to discuss Government new clause 1—Grant of licences: assessments of environmental effects.

It is a pleasure to serve under your chairmanship, Mr Bone. The amendment adds impact on the environment and local community activities to the list of areas the regulator should take into account when exercising functions under the Bill.

I am grateful that the Government listened to my colleagues in the other place, tabled new clause 1 and agreed to undertake assessments of environmental effects before the regulator grants certain licenses. I pay tribute to my Front-Bench colleagues in the other place, who did a great deal of work to improve the Bill by persuading the Government to make a number of crucial concessions.

I do not intend to press the amendment to a vote, but I would like to ask the Minister whether he will set out on the record exactly how the proposed operator licensing regime and its regulation powers will work in relation to existing planning laws and processes. Concerns were raised in the other place that the regulator or persons with an operator license will be able to overrule or disregard any existing planning regulations, laws and processes when it comes to potential spaceport or spaceflight operations in the UK.

As I indicated, I am happy to withdraw the amendment if the Minister is prepared to clear up any ambiguity surrounding existing planning procedures and the development the UK’s space industry. I hope he listens not only to the concerns that we raise in Committee but to the expert contributions in the other place.

It is a pleasure to serve under your chairmanship on this important Bill, Mr Bone. I echo the hon. Gentleman’s thanks to Members in the other place for the collegiate and helpful way in which they developed the Bill into its current state.

I recognise the hon. Gentleman’s concerns about environmental protection and the impact on local communities of spaceflight activities and the operation of spaceports under the Bill. As he said, similar issues were raised in the other place. Following constructive debates in the other place on environmental issues, the Government reviewed the compatibility of the existing planning and environmental framework with spaceflight activities. During that review, certain situations were identified where the existing framework may not provide the environmental protection that we all wish to be required of spaceflight activities. Discussions have since taken place across Government to address that potential gap, resulting in the tabling of Government new clause 1.

New clause 1 will place a mandatory requirement on an applicant for either a launch or a spaceport licence to submit an assessment of the environmental effects of their proposed activity as a precondition of receiving a licence. That duty will ensure that appropriate assessments of environmental effects are conducted by the operator or spaceport licensee and considered by the regulator prior to the determination of an application for a licence.

As hon. Members are aware, there is already a comprehensive body of environmental and planning legislation with which spaceports and spaceflight operators will need to comply, independently of the requirements in the Bill. As such, the new clause seeks to ensure that appropriate assessments are undertaken without placing a disproportionate burden on applicants. To achieve that, it allows for existing equivalent environmental assessments to be considered where appropriate. That will be the case only where the regulator is satisfied that there has been no material change of circumstance since the previous assessment was prepared.

I hope I have reassured hon. Members of the Government’s intention to ensure that spaceport and operator licences are granted only following a robust assessment of the environmental effects of the activities those licences permit. New clause 1 goes even further than the hon. Gentleman’s amendment 13. It adds to the duty on the regulator in clause 2(2)(e) to take into account any environmental objectives set by the Secretary of State, including those set by the Environment Agency.

We also amended schedule 1 in the other place to include an indicative licence condition that, if included in a licence, would require assessments of the impact of noise and emissions from spaceflight activities. I hope in the light of the Government new clause that the Committee will agree that the Bill contains robust environmental protections, and I ask the hon. Gentleman to withdraw his amendment.

I, too, welcome the amendment and the Government’s new clause to strengthen the environmental protections. Those hoping to establish spaceports are still concerned about exactly what is expected of them. It is about trying to get the right balance between protecting the community and allowing spaceports to develop. The sooner the regulations and expectations are clear, the more likely it is that spaceports will go ahead. At the moment, it is hard to expect them to invest if there is still the risk that, at some point, they simply will be ruled out by one of the environmental regulations.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 ordered to stand part of the Bill.

Clauses 3 to 6 ordered to stand part of the Bill.

Clause 7

Provision of range control services

Question proposed, That the clause stand part of the Bill.

Again, I welcome any clarification, sooner rather than later, about who is envisaged as providing the range control services. It is clearly stated and welcome that the provider should be independent from those operating the spaceport or the flight. Would it be air traffic control? Who exactly is identified? The problem with the Bill is still that there is a lot of vague gaps that have not been filled in, which is causing anxiety.

I thank the hon. Lady for her question on range controls. Clause 7 requires that range control services must be provided either by the Government or by licensed providers. At present, only one part of the Government—the Ministry of Defence—is able to provide range control services. Range safety for existing military ranges is regulated by the Defence Safety Authority, but our intention is that, for spaceflight, those services will be provided on a commercial basis. Indeed, a driving purpose of the Bill is to enable commercial and not state-sponsored or institutional spaceflight. Since range control services are one of the key mechanisms through which we will protect the public during spaceflight activities, any provider must hold a licence. That will help to ensure the regulator that only fit-and-proper persons can act as a range control service provider. I hope that clarifies the situation.

Is the Government’s expectation clear to the companies that are already developing? Are they able to have the security to set up what is, in essence, yet another completely new industry to service the space launch industry?

In our Launch UK programme, we have made it clear that range control is one of the opportunities for which we are seeking interest from industry. To that extent, the private sector is aware that this is one of the big opportunities that the Bill will enable.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Clause 8 ordered to stand part of the Bill.

Clause 9

Grant of operator licences: safety

I beg to move amendment 14, in clause 9, page 7, line 37, leave out “to (4)” and insert “and (3)”.

This amendment changes the requirements the regulator must satisfy in order to grant an operator licence to UK Space Port operators.

The amendment is merely a probing amendment, and I do not intend to speak to it for very long. We would like the Government to ensure that the regulator must not grant an application to a potential operator unless it has carried out a thorough risk assessment and meets the prescribed requirements as laid out in the Bill. I would like to press the Minister and seek further details on how the relationship between the Health and Safety Executive and the Civil Aviation Authority or UK Space Agency will work, and how best practices will be shared.

A lengthy debate in the other place highlighted the concerns. I am grateful to the Minister in the other place, who indicated that he would go away and work with officials. Concerns were raised, mainly by my Front-Bench colleagues in the other place and by me in the Commons on Second Reading, about how the Health and Safety Executive will work with the regulators. The Government stated that there would be a memorandum of understanding, but we are still in the dark when it comes to details.

I seek assurances from the Minister that regulators have the expertise and resources necessary to ensure that the general public are kept safe when it comes to the potential development of our space industry. I also reiterate that, so far, we have little detail on how the UK Space Agency and the CAA are going to share best practice. We would be grateful if the Minister could shed any more light on that.

I will certainly attempt to do so. The hon. Gentleman raises the important issue of the safety requirements that regulators must take into account when deciding applications for a spaceflight operator licence under clause 9. The Bill makes it clear that safety regulation will be at the heart of the regulation of spaceflight, spaceports and associated activities. Clause 2 sets out the core duties of the regulator and establishes that ensuring the health and safety of the public is the primary duty.

Clause 9 imposes very clear requirements on both the applicant for a spaceflight operator licence and the regulator in deciding that application. Clause 9 requires that applicants for a spaceflight operator licence assess the risks to health and safety posed by the spaceflight activity. Clause 9 makes a necessary differentiation between the assessments carried out for those who voluntarily agreed to participate in spaceflight activities, which would include any crew or other spaceflight participant, and others who are not taking part in any prescribed capacity—the general public. For people taking part in spaceflight activities, details of the risk assessment required under subsection (2) will form a critical part of the informed consent form that clause 16 requires the volunteers to sign before they are allowed to participate in those activities.

The other key aspect to the clause is managing risks to the general public. Even after all steps have been taking to reduce risks to as low as is reasonably practicable, subsection (4)(b) means that the regulator will not issue a licence if the residual risk to public health and safety remains unacceptably high. If amendment 14 were passed, that protection for the general public would be removed, although I understand that, as the hon. Gentleman said, it is a probing amendment.

Subsection (5) enables the making of regulations to make provision about the matters that operators must take into account and other requirements to be met in carrying out risk assessments. Paragraphs (b) and (c) address the risk to public safety, the steps to be taken to ensure that risks are as low as reasonably practicable, and how acceptable levels of risk are to be determined. The regulations will also prescribe the factors that must be taken into account in determining acceptable levels of risk. Subsection (6) enables regulations setting out information that applicants must provide so that the regulator may be satisfied that an applicant has done what it is required to do under the licence.

The hon. Gentleman asked about the MOU between the CAA, the HSE and the Health and Safety Executive for Northern Ireland on aviation safety. The MOU between the HSE and the CAA on aviation safety is publicly available on the CAA website, and we expect any future MOUs between the HSE and spaceflight regulators to be made publicly available in a similar manner.

In conclusion, the clause is central to the safe conduct of spaceflight in the UK. It will ensure that risk is managed appropriately and give the regulator the power it requires to oversee that. I am confident that it sets out robust and clear requirements of applicants. I therefore ask the hon. Gentleman to consider withdrawing his amendment.

This is one of the key areas in the Bill where spaceport and launch operators do not know what is expected of them. I understand that the Government wish to consult, but the sooner that it is clarified the better. Regulations coming forward two years after Royal Assent—that comes from a comment in the Lords, and would mean the summer of 2020, when the Government had hoped to launch—would throw complete planning blight over the industry. It is not possible to borrow money to develop launch vehicles or a spaceport without any idea what standard has to be reached.

On clause 9(9) and thinking about passengers, one of the industries that will develop is space tourism. Clearly, the public must be protected as far as possible. In the past, those involved in launch or space abilities have been incredibly fit and trained people. For those going as tourists, that will not be the case. It will be important that we carefully lay down what level of health expectation or physical training is required, because we do not want the early years of the industry to be marred by deaths in space.

I will respond to two of the points made by hon. Members. On early visibility of licence requirements, to get the industry feeling confident that it has a clear set of rules to work with, we will continue to engage with it as we develop the detailed regulations to ensure that the legislation facilitates and supports development in the sector and provides operators with the confidence to move forward with their plans. In addition, as has been said, regulators will be holding extensive pre-licensing discussions with potential operators in order for them to provide more detailed guidance.

I thank the Minister for his response and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 ordered to stand part of the Bill.

Clause 10

Grant of spaceport licence

I beg to move amendment 15, in clause 10, page 8, line 27, leave out ‘satisfied that’.

This amendment ensures that two defined criteria steps are properly defined for granting an application for a space port licence.

The amendment is intended to make the legislation clearer about the regulator not granting an application for a spaceport licence “unless satisfied that”—this is from the Bill—

“the applicant has taken all reasonable steps to ensure that risks to public safety arising from the operation of the spaceport are as low as reasonably practicable, and…any prescribed criteria or requirements are met.”

Speaking purely as a lawyer, I thought the legislation would be clearer to remove “satisfied that”, but on reflection that is probably just semantical. I therefore beg to ask leave to withdraw the amendment.

If the amendment has been withdrawn, I would just beg to move that the clause stands part of the Bill.

Ah! You are getting a little ahead of yourself, Minister.

Amendment, by leave, withdrawn.

Clause 10 ordered to stand part of the Bill.

Clause 11

Terms of licences

I beg to move amendment 16, in clause 11, page 8, line 37, leave out subsection (2).

This amendment removes the specified limit they must pay in damages to an uninvolved third party in the event of an accident in operator licences.

With this it will be convenient to discuss the following:

Amendment 5, in clause 11, page 8, line 37, leave out “may” and insert “must”.

This amendment places a definite cap on the amount of a licensee’s liability.

Amendment 6, in clause 11, page 9, line 12, at end insert—

“(7) Within 12 months of this Act coming into force the Secretary of State must lay a report before Parliament setting out plans on what an appropriate maximum limit would be on the amount of the licensee’s liability under subsection (2).”.

This amendment would ensure that the Secretary of State decides on what level the mandatory cap for the licensee’s liability is.

The amendment relates to the terms of spaceport and space operator licences. I propose to remove the specified limit that must be paid in damages to an uninvolved third party in the event of an incident in the operator’s licences. Clause 11 concerns the terms that may or must be included in a licence issued under the Bill authorising spaceflight activities, the operation of a spaceport or the provision of a range control services.

Colleagues in the other place were concerned about the particular wording of this section. We have heard that the amount of liability may be capped. The Minister will correct me if I am wrong, but I think it was mentioned on Second Reading in the Commons that a limit of £20 million had been suggested. I would like the Minister to clarify the issue of the cap, and that is why we have re-tabled the amendment. Although I declare an interest as a lawyer, I did not practise personal injury law and this is not my area of expertise. However, it seems to me that £20 million would cover two very serious non-fatal incidents. It would not be anywhere near enough to cover costs such as living costs and other issues that would arise from serious injury.

I want to know from the Minister, if he is prepared to tell me, whether there is a limit on how much the operator or the Government must pay in damages to an uninvolved third party in the event of an incident. It is also not clear who pays if the losses exceed the proposed cap. Are the Government the insurer of last resort? In the unlikely event of a catastrophic incident, would the Government meet the excess above any cap?

We are certainly not opposed to a cap. We just want some clarity on the issue. Therefore, I would be grateful if the Minister could clear up some of these concerns, which were also raised in the other place, where they were very well put.

As we will also debate amendments 5 and 6 now, it seems appropriate to have the stand part debate too.

My amendment is completely the opposite of the Labour amendment. As things stand, the Government basically take liability for injury and accident and the operator has to indemnify the Government to cover that risk. What we are looking for is a change in subsection (2) from “may” to “must”. The Outer Space Act 1986 makes that clear. At the moment, the liability limit is €60 million, not £20 million. Without some form of cap on the operator’s liability, it is impossible for operators to get insurance. Therefore, they will simply continue to operate outside the UK under the Outer Space Act, somewhere with a limit of €60 million, rather than in the UK with unlimited liability, for which they simply cannot get insurance.

Amendment 6 deals with the level of cap for the kind of launches that are likely to occur from the UK. Further on in the Bill, we would want to have perhaps a per launch cap rather than per satellite, as it is now. With CubeSats and nanosatellites launched in clusters, the liability cap would be absolutely untenable. Consultation is needed. There may be a later reference to launches that could be defined as green or amber, and it may be that different caps are set for that kind of launch as an overall approach. However, there has to be an ultimate limit and that should not be higher than the current €60 million.

The clause mentions the different aspects of launch, and those are the spaceport, the range control and the launch operator, and later there will be the satellite operator. I have tabled an amendment to a later clause to define the liabilities of those groups, with very clear margins, so that there are no gaps that a victim of an accident could fall between.

Clause 11(2) provides a power for a licensee’s liability to indemnify the Government under clause 35 to be capped in an operator licence. Amendment 16 would remove that vital power. Under both this Bill and the Outer Space Act 1986, operators have a liability to indemnify the Government against claims for damage or loss from foreign states and their nationals. That is to ensure that we meet our obligations under the UN space treaties.

However, satellite operators have previously raised concerns that such a liability is a barrier to operating in the space industry. Operators found that the unlimited liability made it difficult to raise finance or to insure against. The Government have therefore responded to those concerns.

The unlimited liability provisions under the Outer Space Act were amended by the Deregulation Act 2012 and since then licences issued under that Act for the procurement of an overseas launch and the in-orbit operation of a satellite benefit from a cap, which is set out in licence conditions.

The UK Space Agency publishes the usual level of cap in its guidance, which currently sets the cap at €60 million for standard missions. Crucially, however, the level is not set by statute, so the cap can be varied depending on the risk of the activity in question. Some activities currently regulated under the Outer Space Act, notably procuring the launch of a space object and the operation of a satellite in orbit taking place from the UK, will be regulated under this Bill in future, and it is the intention to continue to exercise the discretion to cap the liability to indemnify Government in these licences.

Therefore, following Royal Assent of this Bill, amendment 16 would reverse current Government policy and disadvantage satellite operators in the UK. Conversely, amendment 5 seeks to ensure that all operator licences must cap the liability to indemnify the Government under clause 35. Amendment 6 would then go on to ensure that the level of this cap would be set out in a report to Parliament.

I understand clearly that the intent of these amendments is to support operators in the UK and the Government welcome support for that principle, which is why we have included this power in the Bill. However, these amendments are premature. The cap on the indemnity to the Government under the Outer Space Act was based on many years of licensing the procuring of the launch of space objects and of the operation of satellites in orbit. Indeed, it was not put in place until more than 25 years after that Act gained Royal Assent. The costs and benefits of capping liability for those activities were fully considered and were subject to a full consultation with industry. We intend to take a similar approach to considering capping a launch operator’s liability to Government under this Bill, as launch is a new activity in the UK and poses more risks for the UK as a launching state.

As I said on Second Reading, we intend to announce a call for evidence on all issues relating to insurance and liabilities early this year, following Royal Assent. That will allow us to start to assess the appropriateness of a cap for this new and potentially riskier activity, balancing the economic benefits of such activity with the need to protect the taxpayer.

On that basis, I hope that the hon. Member for Kingston upon Hull East will withdraw the amendment.

I wish to press amendment 5, which would change the wording from “may” to “must”. There is still room to consult on the level of the cap, but the industry requires a Government commitment that there will be a liability cap.

We intend to explore that carefully in the consultation, taking into account the fact that launching in the UK is a riskier activity than procuring the launch overseas. It poses a higher level of risk to the UK taxpayer, and we need to consider it very carefully.

I assume the Government recognise that other launching states, such as Australia, France and the US, all have liability caps. If there is no cap, that will simply kill the launch industry dead in this country. I will not push to a vote amendment 6, which would set the cap at a particular level, but the Government should accept the principle that there will be a cap. I would be happy if the Government plan to bring forward such a measure before the third day, but simply to leave the wording as “may” leaves too much doubt.

Amendment proposed: 5, in clause 11, page 8, line 37, leave out “may” and insert “must”.—(Dr Whitford.)

This amendment places a definite cap on the amount of a licensee’s liability.

Question put, That the amendment be made.

Clause 11 ordered to stand part of the Bill.

Clause 12

Conditions of licences

I beg to move amendment 17, in clause 12, page 9, line 41, at end insert—

“(ea) must consult the Environment Agency or (as appropriate) the Northern Ireland Environment Agency, the Scottish Environment Protection Agency or Natural Resources Wales;

“(eb) must consult any relevant local planning authority;”

This amendment ensures that the devolved Administrations are consulted in regards to respective Environment Agency bodies.

With this it will be convenient to discuss amendment 18, in clause 12, page 10, line 4, at end insert—

‘(9) In subsection (6) a “relevant local planning authority” means a local planning authority with jurisdiction over any location which would be significantly affected by the licence application.”

This amendment defines ‘relevant local planning authorities’.

I will be brief, Mr Bone. The amendments aim to tighten up some of the ambiguous wording in the Bill. They are intended to ensure that if space activities were to be established under any of the devolved Administrations of Scotland, Northern Ireland and Wales, their respective environment agency bodies would be consulted before any decision was made on granting an operator licence in their jurisdictions. Will the Minister assure us that he will ensure that the regulator will properly consult the Northern Ireland Environment Agency, the Scottish Environment Protection Agency or Natural Resources Wales, as well as any relevant local planning authority, before an operator can be granted a UK spaceport licence?

I tabled amendment 18 with the aim of properly defining a “relevant local planning authority”. We believe that the Bill is too vague and have expanded on its wording to ensure that a local planning authority is defined as an

“authority with jurisdiction over any location which would be significantly affected by the licence application”.

I have seen the Minister’s collegiate approach to the Committee and hope that he will note Opposition concerns, and I shall be happy to withdraw the amendment if he addresses the important points I have raised.

It is always a pleasure to serve under your chairmanship, Mr Bone.

I support the amendments and hope that the Minister can answer some questions. I am speaking with a constituency interest, as Natural Resources Wales is in my constituency. As that constituency borders England, and has a maritime border, issues such as those we are considering are of regular concern to my constituents. A recent example was the building of the new Hinkley Point nuclear power station on the other side of the Bristol channel. Various significant concerns were raised about the granting of licences for the disposal of mud, which is being removed from the Hinkley Point site to the Welsh side of the channel.

I do not want to get into the specifics of that example, but as there is a question of potentially hazardous materials and the potential for cross-border contamination within the UK, I agree that the matters should be the subject of proper consultation with the devolved authorities, given the likely consequences of anything untoward happening.

I welcome the amendment. My hon. Friend the Member for Glasgow North West and I certainly support it, because three of the potential sites are in Scotland, and one is in Wales. However, as we have discussed, the industry could grow and while there is not currently a site in Northern Ireland, there could be in future. It is important that the devolved Governments should be respected and consulted.

The Government introduced new clause 1 on environmental impact right at the start, when we considered clause 2, and it is crucial that they should respect the devolved Governments’ environmental agencies and local planning considerations.

I thank hon. Members for raising important issues on consultation with relevant environmental and planning bodies. The regulator will identify what assessments of environmental effects are appropriate, during the pre-application process. In reviewing those assessments and deciding whether conditions should be attached to a licence, the regulator may wish to have an input from various environmental bodies. However, requiring consultation with the relevant environment agency and local planning authority before deciding what conditions to attach to a licence is not necessary, and may end up being disproportionate.

For example, once the industry has developed, multiple launches may occur under a separate but almost identical licence. In such a case it would be disproportionate for the regulator to have to consult the environment agency and local planning authority for each new licence. It is also worth noting that clause 2 requires the regulator to take into account any environmental objectives set by the Government, which would include any issued by the environment agency.

The existing planning, regulatory and environmental framework will continue to apply, and environmental bodies will have a say, in accordance with their statutory remit, at the relevant stages, such as when planning permission is applied for. I hope that in the light of the Government amendment and the provisions already in the Bill, Members will agree that robust assessments of environmental effects will be conducted and considered prior both to the granting of a licence and to the imposition of conditions under the Bill. I would therefore ask the hon. Member for Kingston upon Hull East to withdraw amendment 17.

I wonder whether the Government would consider including consultation with these agencies within the environmental impact assessment in clause 2, as amended by new clause 1. The Minister talks about consulting with the Environment Agency but, obviously, in the devolved administrations there are three other environment agencies and they should have their place.

I would not want the Committee to think that we have not been engaging closely with the devolved Administrations in the development of the Bill, because we have, and over a considerable period. We have worked with Scotland, Wales and Northern Ireland at official level to ensure that all the devolved Administrations are content with provisions in the Bill. I have been out in Northern Ireland myself to discuss the opportunities this Bill presents to businesses there.

While these amendments intend to ensure that the respective environmental bodies would be consulted were space activities to be established in any of the devolved Administrations—Scotland, Northern Ireland and Wales—I do not think the Government have gone anywhere near far enough on that. On that basis, I want to push the amendment to a vote.

Question put, That the amendment be made.

Clause 12 ordered to stand part of the Bill.

Schedule 1 agreed to.

Clauses 13 to 16 ordered to stand part of the Bill.

Clause 17

Training, qualifications and medical fitness

Question proposed, That the clause stand part of the Bill.

On the matter of informed consent, I highlight the written evidence submitted to us around what will be defined as informed consent and the possible need to explain complex issues and whether there would be potential for exposing technical information, which, under the US’s ITAR—International Traffic in Arms Regulations—agreement, would be a problem. That is not particularly something I want to bring forward, but we have received a written submission on informed consent.

Informed consent is an important part of the Bill. We will be developing detailed regulations on informed consent, including the information that operators must provide to individuals before they sign consent forms.

Question put and agreed to.

Clause 17 accordingly ordered to stand part of the Bill.

Schedule 2 agreed to.

Clause 18 ordered to stand part of the Bill.

Schedule 3 agreed to.

Clauses 19 to 21 ordered to stand part of the Bill.

Schedule 4 agreed to.

Clause 22

Security regulations

Question proposed, That the clause stand part of the Bill.

I want to ask the Minister a few questions regarding the clause. I apologise if they have been covered already in other parts of the debate.

Clearly, the security of space for our operations is crucial. These activities will be of significant interest to terrorist organisations or others who would wish to cause harm. This is a problem shared not only in this country but across Europe and the world. Currently, we have sensitive information-sharing systems with the Five Eyes countries and our European neighbours. Given the context of Brexit and the absence of guarantees on the existence of a security treaty and so on—these are issues we have covered at great length in the Home Affairs Committee—will the Minister discuss the consideration given to sharing information with our European partners, in particular regarding the safety and security of operations and those who would wish to target them? On the one hand, any new technology or operation could lead us towards a cautious and very secure approach, but there may also be some issues, whether in relation to the cyber or physical aspects of these operations, such as using locations that have not traditionally been used before for civil aviation or other aerospace activities.

We need to take every precaution necessary, particularly with regard to the increasing threat from not only terrorist organisations and non-state actors, but Russia and other countries that would seek to carry out cyber-attacks—North Korea, for example. Many allegations have been made about attacks on other parts of the UK’s infrastructure, including the NHS, and I see no reason why they would not choose to attack such a high-profile area as space activity.

Will the Minister say a little about how we will ensure the most thorough sharing of information? Will he also give us some guarantees? For example, does he believe that a security treaty will be needed with our European neighbours to ensure that data on individuals can be shared adequately enough to deal with those concerns?

National security and the security of spaceports is, indeed, a vital key element of the Bill. The Bill contains measures to secure against unauthorised access to and interference with space craft, spaceports and any associated infrastructure. It also enables the Secretary of State and regulators to take action where necessary in the interests of national security. The hon. Gentleman will be interested to know that the Bill extends existing civil aviation security powers to regulate spaceplanes and spaceports and introduces broadly similar arrangements for operations to launch objects into orbit, but tailors them to the sensitive nature of satellites and reflects the fact that vertical operations will not be manned.

As with aviation security, the Government will work closely with key partners in Europe and around the world to ensure that security remains paramount in the development of the Bill and the industry. We will continue to work with international partners in all appropriate forums to review and, if necessary, to develop and strengthen measures to ensure that transport generally, and in this case the space flight sector, is cyber-secure.

Will the Minister be specific on the importance of having legal agreements in place for the sharing of relevant information on the matter—the importance, for example, of a security treaty of some sort, in particular with our European partners who are not covered by the Five Eyes agreements? Does he agree that that is crucial?

Should we identify a need for additional legislation, the Bill provides us with the power to adopt appropriate regulatory measures and the ability to issue directions, where necessary and proportionate, to specific entities.

Question put and agreed to.

Clause 22 accordingly ordered to stand part of the Bill.

Schedule 5 agreed to.

Clause 23

Spaceport byelaws

Question proposed, That the clause stand part of the Bill.

Will the Minister say a bit about the measures the Government plan to put in place to deal with drones and unmanned aerial vehicles, particularly in relation to their operation around spaceports? There are substantial restrictions on their operation around civil aviation activities in the UK, but a wide range of drones can be commercially purchased and many operators are unaware of the consequences of using them, near to not only airspace but other activities. Will he comment on that, given the particularly sensitive nature of space flight activities and the risk that could be caused by, for example, an incursion into the space around a launch or training activities?

The clause crucially mentions road traffic enactments and the parking of vehicles. We know of terrorist organisations that have attempted to park vehicles near UK airports in the past and it is crucial to retain the physical security around those sites. Given the ability to launch and remotely control drones from great distances, what thought has been given to whether any additional restrictions will be needed or whether the existing regulations for the use of drones will apply in byelaws for space flight operation centres?

The clause enables the Secretary of State to make security-related regulations and to provide guidance on how they may be complied with. The hon. Gentleman asked specifically about drones. He might be aware that the Government announced at the end of November that it is their intention to introduce drone legislation in the spring. The Government will be publishing a draft drone Bill, which will look to extend police powers to extend drone misuse and to mandate the use of safety applications in the UK. We will also be looking at an amendment to the air navigation order to introduce legislation and leisure pilot tests. I hope that addresses his concerns.

Is it therefore the Minister’s intention that when that legislation comes forward it will specifically look at, and make it clear that it applies to, operations around spaceports and space activities? Further, will it be made clear that it concerns not only drones, but—although we are not largely talking here about manned space flight—the use of laser pointers and so on, which we know is a regular problem around airports and which might impede the operation of staff working at those sites or perhaps blind technical equipment being used for space launch activities? Will it be clear that the new legislation applies equally to spaceport activities?

The hon. Gentleman will be interested to know that we will be introducing draft legislation. Should he detect any shortcoming in its application and should he continue to have concerns about whether the spaceport and spaceflight activity enabled by the Bill would have risks posed to it by drone activity, there will be plenty of opportunities in the development of that legislation for Members to point that out to Government.

When will the draft legislation come forward? Given that the police have indicated they do not have the resources to investigate crimes such as shop lifting, bike thefts and mobile phone thefts, will it include resources to ensure that the police can adequately deliver those new responsibilities?

Will the draft legislation also identify new resources to ensure that this responsibility of the police, as well as others, can be adequately enforced?

On the timing, we announced at the end of November that we would introduce the draft legislation in the spring. Spring is slightly movable. We are not quite in spring, I would say, in the middle of January. Later this year—later on this spring—we will bring forward that legislation. The hon. Gentleman will obviously want us to get the legislation right. We are working carefully in the Department to ensure that it is fit for purpose and covers all the situations that he has rightly been bringing to the attention of the Committee.

I want to ask the Minister one further question and would appreciate his indulgence. He refers to the enforcement of the byelaws by a constable. Does he expect, for example, that the responsibilities around any spaceport enforcement of byelaws will be down to the local and geographical police constabulary, or does he expect that the responsibility will be undertaken by one of the non-geographical forces, such as British Transport Police or the MOD police or the Civil Nuclear Constabulary?

The only reason I ask is because, as is often the case and as I have experienced in my own constituency, when there are major national sites of interest—for example, I have the National Assembly and some other major locations of national significance in my area—there is a tendency, given the additional security requirements around those locations, sometimes to divert resources from local policing activities.

Given the existing strains on police forces, community policing and so on, I am a little concerned in that we all want those byelaws to be enforced and security to be absolutely maintained. For example, will consideration be given to additional resources for a police force where a spaceport is located and licensed to ensure that it can cope with those responsibilities and carry them out without being diverted from day to day crime fighting and other police activities?

Order. The way in which the Committee is being carried out is completely in order. The Opposition are being very kind to the Minister in not interrupting to him while he is speaking, but his inspiration sometimes takes a little bit longer to come—it might be that interventions are easier for the Minister than the way we are doing it. [Interruption.] I see it is now working perfectly well.

I am quite happy either way, Mr Bone.

Clause 27 enables the Secretary of State to issue directions in relation to the security of spaceflight activities and national security. Clause 24 provides for a licensee to request further specific advice from regulators or the Secretary of State about compliance with security requirements of a particular activity, service, site, facility or other matter. The byelaw powers are modelled on airport byelaws, and they would be locally policed and locally resourced.

Question put and agreed to.

Clause 23 accordingly ordered to stand part of the Bill.

Clauses 24 to 27 accordingly ordered to stand part of the Bill.

Clause 28

Power to give directions: international obligations of the UK

Question proposed, That the clause stand part of the Bill.

Significant concern has been expressed about the future participation of the UK in various space industry international obligations, particularly European obligations. Perhaps the Minister could say a little bit about that—I will go on at length here so he can get some inspiration. Perhaps he could also talk about what assessment has been made of the impacts of leaving the European Union on our participation in, for example, Copernicus, Galileo, Egnos, GovSatCom, Iris, and in Space Situational Awareness and Space Surveillance and Tracking.

For those unfamiliar with those, Copernicus deals with earth observation missions, Galileo and Egnos with navigation—the European equivalent to GPS in some respects—GovSatCom deals with communications, and Iris deals with air traffic management, which we discussed along with aspects of air safety regulations in the last debate. Space Situational Awareness and Space Surveillance and Tracking deal with space debris. Those issues to not come up on a day-to-day basis but, given the cross-border nature of operations, it is crucial that we continue co-operating with our European neighbours, in particular on space debris, given the likely trajectories of launches from the UK and the likely descent paths of items falling from launches and so on. Those things are designed and planned in such a way as to avoid the descent of dangerous materials, but given the increasing number of launches and the increasing number of vehicles being launched into space, and with technology going up through space launch methods, getting that stuff right is obviously important.

We do not want to find ourselves getting into a dispute with our European neighbours after something falls off something we have launched. That is why international agreements on space activities are so crucial, particularly with our European neighbours. Will the Minister say something about the assessment that has been made of our existing international obligations and obligations that we could be in the process of entering into if we stay in the European Union, and their implications?

The Government recognise the enormous benefits of European collaboration in space, and indeed in research and innovation generally. We published a science and innovation discussion paper as well as an external security discussion paper in September 2017 that set out the Government’s clear wish to discuss options for future arrangements in the EU space programmes, including Galileo, Copernicus, Agnos and others. The decision that concluded phase 1 of the exit negotiations in December provides certainty that UK businesses can continue to bid for and win contracts to build, operate and help develop the EU space programme, which we have played a huge part in over the years.

The Government continue to invest in the success of the UK space sector. We recently invested more than £100 million in new satellite test facilities at Harwell and manufacture and test facilities for rocket engines at Westcott in Buckinghamshire. As the hon. Gentleman knows, that is in addition to the substantial UK investment in the European Space Agency, which is a non-EU body, of around £300 million per year.

I thank the Minister for his answer on some of those agencies. Again, I have a particular interest in this as declared in the Register of Members’ Financial Interests. Airbus Defence and Space is in the next door constituency and a number of my constituents work there. I know they and many other members of UK space bodies have concerns about future participation in these agencies.

I welcome what the Minister said on the principles with respect to the agencies, but he did not mention specifically the more technical space debris agencies and other agencies. Rather than detain him now, could he write to the Committee and outline how he sees our international obligations functioning under all of the agencies I mentioned?

I am happy to provide further details about our common approach to space debris, if that would be helpful, and undertake to do so.

Question put and agreed to.

Clause 28 accordingly ordered to stand part of the Bill.

Clauses 29 to 31 ordered to stand part of the Bill.

Clause 32

Power to authorise entry etc in emergencies

I beg to move amendment 19, in clause 32, page 23, line 31, at end insert—

‘(4A) An enforcement authorisation must be referred to a justice of the peace for evaluation within 48 hours, following the 48 hour period under subsection (7) in which the enforcement authorisation remains in force.”

This amendment provides that an urgent enforcement authorisation must be referred to a justice of the peace for evaluation within 48 hours, following the 48-hour period under Clause 32(7) of the Bill, during which the enforcement authorisation remains in force.

The amendment provides that an urgent enforcement authorisation must be referred to a justice of the peace for evaluation within 48 hours following the 48-hour period under subsection (7), during which the enforcement authorisation remains in force. The amendment aims to clear up any ambiguity surrounding clauses 31 and 32, which grant warrants authorising entry or direct action and powers to authorise entry in emergencies.

Clause 32(2) permits a named person to do anything necessary for protecting national security, securing compliance with international obligations or protecting health and safety. My colleagues in the other place raised concerns about emergency warrants and such vague wording. The power conferred by clause 32 is very extensive and broad. It contains no thorough judicial oversight. The Minister is well aware that the House of Commons Science and Technology Committee also expressed concerns about this aspect of the Bill, which was obviously mentioned in detail in the other place.

We welcome the fact that the Government reduced the authorisation period from one month to 48 hours, which limits the Secretary of State’s power to a degree. However, we still have concerns that such significant and wide-ranging powers will be exercisable without anticipatory or rapid post hoc judicial involvement.

Currently, there is not enough in the Bill to check whether the powers granted under clause 32 will be appropriately or proportionately used by the authorised person. The Minister in the other place stated that the amendment would “impose unhelpful bureaucracy”. We believe that judicial oversight of emergency warrants is crucial to ensure that such excessive powers are not abused, and we do not believe that we are asking for anything unreasonable. Having checks in place to ensure that this extensive power is not misused will improve the Bill. It is not, as stated by the Minister in the other place, “unhelpful bureaucracy”. I hope the Minister can give assurances that the Government are listening to those concerns and will take them on board.

I rise to support the amendment. Clause 31 refers to the seeking of warrants from justices of the peace, where there is time to do so. Clearly, there will be situations where that is not reasonable and therefore we accept that there is a need to allow emergency entry— 48 hours should be sufficient to allow that warrant to be reviewed by a justice of the peace. We welcome that the Government reduced emergency entry from a month to 48 hours, but it is perfectly reasonable that it should be looked at by a justice of the peace within two days.

I thank the hon. Member for Kingston upon Hull East and for Central Ayrshire for raising the issue of emergency powers. The clause confers on the Secretary of State the power to grant an enforcement authorisation to carry out any specified action in the most urgent cases, such as a serious risk to national security, compliance with our international obligations or people’s health and safety. The amendment tabled by the hon. Gentleman would seek to require that such an enforcement authorisation be evaluated by a justice of the peace within 48 hours of the 48 hours that the authorisation has been in force.

The Government have listened carefully at all stages of the discussion of the provision and addressed concerns before the Bill was brought to the House. Before the Bill’s introduction, the Science and Technology Committee raised concerns about the length of time for which an enforcement authorisation would remain in place. In response to that helpful intervention, we reduced the time for which an enforcement authorisation can remain in place from one month to 48 hours.

The Opposition in the other place attempted to introduce amendments similar to that tabled by the hon. Gentleman. The amendments are not clear on the purpose that a post hoc evaluation by a justice of the peace would serve—the order would have already been spent and the specified action taken. It is also not clear what is expected to follow from any such evaluation. However, the Government have reflected further on the amendments and the intentions underpinning them. Officials have carried out extensive discussions with colleagues across Whitehall, including in the Ministry of Justice, the chief magistrate’s office and the Home Office, which is responsible for the powers of entry gateway process. None of the discussions resulted in the suggestion that the power should be amended as the amendment proposes. An important reason for that is that there is no known precedent of a justice of the peace conducting an evaluation of an emergency power once it has been exercised.

Let me reassure hon. Members that there are adequate safeguards in the Bill with respect to the exercise of this significant power. Such an authorisation can be granted only to a named person who the Secretary of State is satisfied is suitably qualified to carry out the necessary action. Each time the power is used, the authorisation must be in writing, must specify the action required and will remain in force for only 48 hours from the time it is granted.

In response to concerns previously raised about the exercise of this power without sanction by an independent judicial authority, it is important to note that the decision of the Secretary of State to issue an enforcement authorisation could be challenged by judicial review. I would also point out that this power is more conservative and requires more stringent authorisation than other comparable powers of entry, such as those of nuclear inspectors or health and safety inspectors who are provided with a standing authorisation and may act at their discretion. The power would be used only in the most serious and urgent cases, but it is necessary to ensure that those involved in spaceflight activities and third parties are adequately protected should such situations arise.

The Minister is being very helpful. One of the interesting points that lies behind some of the concerns is about who advises the Secretary of State that the intervention needs to be made in the first place. Will the Minister give a little more flavour of the process whereby advice is given that leads to an intervention order? That may give some comfort to the Opposition.

The enforcement authorisations would be a last resort where the regulatory bodies in question felt that it was absolutely imperative to have one in the interests of our national security, or for the pursuit of our international obligations, or the health and safety of individuals in and around the spaceport or elsewhere in the UK. It is very much a power of last resort. Given the nature of the activities being undertaken at spaceports, everyone should be able to see the need for such provisions.

I hear what the Minister says, but he seems to be saying that, because there is no precedent for a justice of the peace to review such warrants, it is not necessary. He also said that judicial review is available, but he must appreciate that the threshold to succeed in judicial review is very high and that it is extremely costly to the party bringing the proceeding. Frankly, he has not gone anywhere near far enough, and for that reason I am pressing the amendment to a Division.

Question put, That the amendment be made.

Clause 32 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Jo Churchill.)

Adjourned till this day at Two o’clock.

Space Industry Bill [ Lords ] (Second sitting)

The Committee consisted of the following Members:

Chairs: †Mr Adrian Bailey, Mr Peter Bone

† Bowie, Andrew (West Aberdeenshire and Kincardine) (Con)

† Churchill, Jo (Bury St Edmunds) (Con)

† Coyle, Neil (Bermondsey and Old Southwark) (Lab)

† Double, Steve (St Austell and Newquay) (Con)

† Doughty, Stephen (Cardiff South and Penarth) (Lab/Co-op)

† Ford, Vicky (Chelmsford) (Con)

† Foxcroft, Vicky (Lewisham, Deptford) (Lab)

† Garnier, Mark (Wyre Forest) (Con)

† Graham, Luke (Ochil and South Perthshire) (Con)

† Green, Chris (Bolton West) (Con)

† Johnson, Joseph (Minister of State, Department for Transport)

† Monaghan, Carol (Glasgow North West) (SNP)

† Morris, David (Morecambe and Lunesdale) (Con)

† Murray, Mrs Sheryll (South East Cornwall) (Con)

† Ruane, Chris (Vale of Clwyd) (Lab)

† Turley, Anna (Redcar) (Lab/Co-op)

† Turner, Karl (Kingston upon Hull East) (Lab)

† Whitford, Dr Philippa (Central Ayrshire) (SNP)

Williamson, Chris (Derby North) (Lab)

Mike Everett, Jyoti Chandola, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 23 January 2018

(Afternoon)

[Mr Adrian Bailey in the Chair]

Space Industry Bill [Lords]

We resume line-by-line consideration of the Space Industry Bill. We are sitting in public and the proceedings are being broadcast. Before we begin, will everyone ensure that all electronic devices are turned off or switched to silent mode? Teas and coffees are not allowed during sittings.

Clause 33

Liability of operator for injury or damage etc

I beg to move amendment 20, in clause 33, page 24, line 2, leave out subsection (1).

This amendment relates to situations where the operator has no liability in order that those living around the spaceports have adequate powers to protect themselves from noise and nuisance.

It is a pleasure to serve under your chairmanship, Mr Bailey. The amendment relates to situations where the operator has no liability, and seeks to ensure that people living around spaceports have adequate powers to protect themselves from noise nuisance. The Bill originally contained no proper provisions to protect people living close to spaceports or under potential flightpaths from noise. The word “noise” was not even included in the Bill. It now is, but only once. Again, I pay tribute to my colleagues in the other place, particularly my Front-Bench colleagues, who managed to secure that vital concession.

I welcome the Government’s insertion of an assurance that licences can include a condition that an assessment must be done of the noise and emissions that activity will cause, and of the impact on local communities. To say that aircraft noise is rather loud would be an understatement. I can imagine the noise and nuisance if we ended up regularly launching rockets in the UK. Will the Minister therefore give us an assurance that he will look closely at what powers people who live around potential UK spaceports have to protect themselves from such noise nuisance?

I appreciate that there are concerns about the possibility that spaceflight activities may have an adverse effect on local people. Clause 33 is designed to balance the right to quiet enjoyment of land against the right to carry out a commercial activity, to ensure that there is only minimal encroachment of rights where the operator acts in accordance with the law.

Subsection 1 is replicated from section 76(1) of the Civil Aviation Act 1982, which provides a similar protection for aircraft operators. Amendment 20 would remove the protection for spaceflight operators. However, the Government believe that subsection (1) is appropriate to enable spaceflight operators to carry out activities from the UK. Such a provision is necessary to prevent an operator who acts lawfully from being sued by a third party who considers that his or her right to quiet enjoyment of land is being affected.

Where carrier aircraft are used as part of spaceflight activities, local people will continue to have no such claims against aircraft operators because of the protection in section 76 of the Civil Aviation Act, so the amendment would have little practical effect on spaceports that are adapted aerodromes, such as the potential spaceports at Newquay and Prestwick. However, it should be stressed that such a protection does not apply if an operator does not comply substantially with all the requirements imposed on them.

The protection from claims of nuisance and trespass does not prevent anyone who suffers injury or damage arising from spaceflight activities from bringing a claim against an operator under the strict liability course of action provided for in subsection (2). With that assurance, I ask the hon. Gentleman to consider withdrawing his amendment.

I am grateful to the Minister for those assurances. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 7, in clause 33, page 24, line 31, leave out “may” and insert “must”.

This amendment places a definite cap on the amount of a licensee’s liability.

With this it will be convenient to discuss the following:

Amendment 8, in clause 33, page 24, line 36, at end insert—

“(5A) The limit on the amount of the licensee’s liability as referenced in subsection (5) must not exceed €60 million for each launch.”

Amendment 9, in clause 33, page 24, line 36, at end insert—

“(5A) Regulations under subsection (5) must provide for—

(a) the maximum limit on the amount of a particular licensee’s liability to be based on each launch undertaken by the operator;

(b) the maximum limit on the amount of a licensee’s liability to vary depending on the classification type of each launch.

(5B) The classification type for each launch as in subsection (5A) is defined as the level of risk attached to each launch and will be determined by the regulator in accordance with the regulations.”

This amendment allows for a mandatory cap for the licensee’s liability to be based on each launch rather than per satellite and would ensure the cap on the amount of a licensee’s liability can vary depending on the type of launch depending on its risk classification.

Amendment 10, in clause 33, page 24, line 37, leave out “may” and insert “must”.

This amendment places a definite cap on the amount of a licensee’s liability.

This group of amendments comes back to the issue of liability for operators and, in particular, the need to set some form of cap on their liabilities so that they can get insurance.

Amendment 7 would change “may” to “must” in subsection 5. As I said earlier, that is not to set the limit, but to raise the principle of one. Later, as we will see when we come to Government amendments to clause 34, the Government themselves change “may” to “must”, implying that there is a cap that they are paying above. Similarly, in clause 33(6) we would also change “may” to “must”.

It needs to be stated that the maximum limit would not go above the €60 million that satellite launchers currently have to indemnify elsewhere. However, what has been described in the Bill and in the explanatory notes is that the launch activities carried out in the UK may be quite different, as the Minister just talked about with regard to noise nuisance. In horizontal take-off, we are talking about an aeroplane carrying a small rocket that will launch cube satellites and micro-satellites such as Unicorn.

As I said earlier, the current limit of €60 million per satellite, and therefore the launch of micro-satellites, would be untenable. Therefore, we need to consider in the consultation making the amount per launch, or per cluster, as opposed simply to per satellite. The Government need to reassure us that they accept the principle of a limited liability and of a liability cap.

There is also the discussion in the paper of describing launches as having a green or amber risk—obviously, those at red risk would not get a licence. Therefore, it could be done by class as opposed to launch by launch. Horizontal take-off vehicles launching cube satellites and micro-satellites might be given a different classification than a vertical take-off vehicle carrying large satellites, as has been the case elsewhere.

This cluster of amendments simply intends to bring back this basic principle that the industry has raised with me, and I am sure with other Members. It has also submitted in writing again that the failure to commit to setting a liability cap whereby industry indemnifies the Government up to a certain level means that companies will not manage to get insurance and they simply will not launch from the UK.

To add to the comments of my hon. Friend, this issue could affect where future developments take place in the space industry. Jurisdictions such as Singapore do not require satellites—Glasgow has strength in satellites—to be built locally. However, other jurisdictions require satellites to be built in the local area or in the country.

If cube satellite businesses do not get a mandatory liability cap within this Bill, there is a danger that future development will be affected, and a danger that, when those businesses are looking to expand or develop satellites for future use, they will do so where they can get one. That would be where they can insure and launch satellites. It is absolutely crucial that we get this issue sorted at this stage.

We discussed an operator’s liability to indemnify the Government against claims from foreign states and their nationals in clause 35. In addition, clause 33 places a strict liability on the operator to compensate third parties in the UK who suffer injury or damage as a result of space flight activity. This is necessary because the Bill allows spaceflight activities to take place from the UK. The intention is to provide easy recourse to compensation for the uninvolved general public in the UK on the same basis as compensation available to foreign nationals.

Clause 33(5) provides a power to make regulations to limit an operator’s liability arising out of spaceflight activities. As we have discussed, the Government intend to issue a call for evidence to consider whether such a cap is appropriate. The amendments seek to require the Government to make regulations that specify a cap on liability in an operator’s licence based on the risk profile of the launch.

The proposal is to set an upper limit on that cap in secondary legislation of €60 million. That figure, as we have discussed, reflects the existing cap on an operator’s liability to indemnify the Government in a licence for a standard mission issued under the Outer Space Act 1986, which was set following considerable experience of satellite licensing. There is no reason to believe that that is also an appropriate level at which to cap a launch vehicle operator’s liability to third parties in the UK, since that activity is likely to be inherently more risky.

Creating inflexibility in legislation is also not helpful. The existing Government indemnity liability cap of €60 million for satellite operators is set by a policy decision and can be varied as appropriate—the figure is not laid down in the Outer Space Act for that reason. The UK Space Agency is considering its approach to risk management of satellite licensing, including the implications for liabilities and insurance requirements. That flexibility is vital if regulation is to keep up with a rapidly changing space sector. The UK Space Agency intends to issue further guidance on that new approach later this year.

As that demonstrates, legislative flexibility is better for both industry and the Government, because it allows the regulator to determine case by case whether to cap liability and the level of any cap. That should encourage operators to design their missions to reduce injury and damage as much as possible, leading to safer launches and reduced costs for them.

Let me turn to some of the hon. Lady’s specific points before she intervenes—I may anticipate what she is about to ask.

A mandatory cap on liability and mandatory Government compensation embedded in primary legislation could potentially breach state aid rules. That could also cause difficulties in respect of future trading rules applying to the UK, although those are of course as yet unknown. For that reason, it is important to retain the flexibility to deal with the issue by way of secondary legislation. In that way, this and future Governments will have a power to introduce and vary a cap to ensure that it is in line with our legal obligations. It can also be varied in the light of changes in the market or in our trading commitments.

The amendment to clause 33(4)(a) means that the Government—the hon. Member for Central Ayrshire commented on this—must compensate a claimant only in the event of a cap. That amendment does not mean that there is a cap on the face of the Bill.

As I said in my remarks, it is the principle a cap as opposed to the amount. I totally understand the need for consultation, because the type of space industry being discussed is different from space industries elsewhere, where vertical rockets are launched. I am still not clear why the Government are unwilling to commit to a cap in principle when that is what the industry is crying out for.

I will repeat what I said before. As soon as the Bill receives Royal Assent we will start the process of a call for evidence to determine whether there is a need for a cap and the level at which any such cap might be set.

Question put, That the amendment be made.

I beg to move amendment 11, in clause 33, page 24, line 39, at end insert—

“(7) Within 6 months of this Act coming into force the Secretary of State must lay a report before Parliament setting out divisions of responsibility and the level of liability for parties’ spaceflight activities, including—

(a) the Spaceport;

(b) the launch operator; and

(c) the satellite operator.”

This amendment places a requirement on the Secretary of State to publish clear guidelines with regards to responsibility and liability for parties involved in spaceflight activities.

This is a probing amendment to highlight the fact that in the past the space industry was very much state-driven, state-paid-for and state-covered, and now we are moving to a commercial situation where a spaceport, a launch company and a satellite company will be totally different entities. Therefore, I seek clarification in the consultation of exactly where the handover of liability is from one to the other and what responsibilities they have. We would not want to see people arguing at the edges and bystanders, other companies or satellite companies ending up not being compensated for a mission that failed.

I thank the hon. Lady for raising the important matter of the respective responsibilities and liabilities that spaceports, launch operators and operators of satellites will have. The full scope of a licensee’s responsibilities will be set out in the Bill, in regulations made under the Bill and in the terms of specific licences granted by the regulator. In broad terms, it is envisaged that the Bill will enable the regulator to license four types of activity initially: operation of a spaceport, spaceflight activities involving launch of a spacecraft, operation of a satellite and provision of range control services.

The Bill sets out certain high-level responsibilities and obligations on licensees. Most obligations are on persons carrying out spaceflight activities. I shall refer to them as spaceflight operators for convenience, although that term is not used in the Bill. Those include persons carrying out launch and operating a satellite. It is considered that activities of the spaceflight operator are the most likely to cause injury or damage to third parties.

In the case of spaceflight operators, clause 9 imposes obligations to assess the risk to health and safety posed by the spaceflight activity, to comply with the risk assessment requirements and to take all reasonable steps to reduce risks to the general public so that they are as low as reasonably practicable.

Under clause 16, the spaceflight operator must not allow individuals to take part in a spaceflight activity unless they meet criteria prescribed in regulations and have signed a consent form signifying that they understand and accept the risks of taking part in the spaceflight activity. Under clause 17, the spaceflight operator must not allow unqualified individuals to take part in or otherwise be engaged with the spaceflight activity.

Clause 33 places a strict liability on a spaceflight operator to provide the uninvolved general public with a straightforward remedy for compensation for injury or damage caused by their spaceflight activities. This strict liability would apply to any injury or damage caused in the UK or its territorial waters, and to an aircraft in flight or persons and property on board such aircraft. It applies to damage that is caused by a craft or space object being used for spaceflight activities.

Spaceflight operators also have an obligation under clause 35 to indemnify the Government for any claims brought against the Government for loss or damage caused by their spaceflight activities. Other bodies that may be carrying out functions on behalf of the Government also benefit from the indemnity.

On the responsibilities and liabilities of spaceport operators, clause 10 requires that applicants for a spaceport licence must take all reasonable steps to ensure that risks to public safety of operating the spaceport are as low as reasonably practicable. In addition, the applicant will need to fulfil any criteria and requirements set out in regulations. In the case of providers of range control services, they will be governed by the provisions of clauses 5, 6 and 7 and regulations made under those clauses.

In addition to the Bill, further detailed obligations and responsibilities for all types of licence holders will be prescribed in regulations: for example, safety requirements under clause 18 and security requirements under clause 21. Those regulations will be supplemented by detailed guidance.

The regulations will set out licensing and ongoing requirements and any oversight of operations to ensure that spaceflight activities and spaceports are operated safety. In addition to general responsibilities and liabilities imposed by the Bill, and regulations made under it, the terms of individual licences will specify the particular activities authorised under that licence and the responsibilities that go with them. Individual licences will also be subject to licence conditions tailored to their application, examples of which are set out in schedule 1.

I hope I have reassured the hon. Lady that the Bill, combined with the regulations to be made under it and the terms of individual licences, will provide the necessary clarity on the responsibilities and liabilities that come with being a licence holder under the Bill. The Government intend to consult publicly an all initial draft statutory instruments and statutory guidance. All draft regulations will be accompanied by a full explanation of their intent. Furthermore, reflecting the importance that the Government place on consultation, we have amended the Bill to impose a statutory duty to carry out public consultation before making any regulations under the affirmative resolution procedure. I therefore ask her to withdraw her amendment.

As ever, it is a pleasure to serve under your chairmanship, Mr Bailey. I want to underline the point that has been made as it applies well to what we are talking about—the wording that relates to liabilities, given their legal implications. It also applies to clause 68.

The Minister will be aware that UKspace, the space trade association, has raised concerns about the terminology used, which in this circumstance and in other parts of the Bill is not necessarily consistent with that used in the industry. To give an example of the confusion, the industry uses “launch systems” or “launch services” to refer to the launching of satellites, whereas the Bill appears to use “spacecraft” for that. The industry uses the word “spacecraft” to refer to man-made objects that are to be delivered into space—also known as “the payload.”

I do not want to get into a big semantic debate but, particularly when we are talking about where liabilities lie—whether with a launch operator or a satellite operator, or with a spacecraft, a launch system or launch services—I want an assurance from the Minister that there will be clear guidance, understood by the industry, the public and the courts when it comes to interpreting the Bill’s provisions.

I am happy to repeat the assurance I gave a second ago. We will consult publicly on all the initial draft statutory instruments and the statutory guidance that will give effect to the provisions. I hope that that process will address any remaining areas of uncertainty about terminology, to which the hon. Gentleman refers.

I look forward to seeing the regulations. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 33 ordered to stand part of the Bill.

Clause 34

Power of Secretary of State to indemnify

I beg to move amendment 1, in clause 34, page 25, line 15, leave out “may” and insert “must”.

This amendment concerns the case where a person is caused injury or damage by spaceflight activities carried out by a licensee whose liability to that person is capped by regulations under clause 33(5). It converts the Secretary of State’s power to indemnify that person in respect of any shortfall into a duty to do so.

The Bill is designed to ensure that spaceflight activity is as safe as possible, and risks to third parties are minimised as far as possible. However, no activity is entirely without risk and we have to account for that. If injury or damage arise, it is right that affected third parties should have easy recourse to compensation. That policy does not change if an operator has a capped liability.

As we discussed, clause 33(5) provides a power to make regulations that enable a regulator to specify a cap on an operator’s liability for injury or damage arising out of their spaceflight activities to prescribed persons, or in prescribed circumstances. Those persons and circumstances would be set out in regulations, but we envisage that a cap would be on an operator’s liability to the uninvolved general public who suffer injury or damage as a result of spaceflight activities. As that liability can be capped, clause 34(3), as drafted, provides the Secretary of State with a power to indemnify a claimant in situations where injury or damage caused by spaceflight activities exceeds an apparatus capped liability amount.

Having listened carefully to the debate in the other place, the Government agree that it is right to go further, and the amendments turn the power under clause 34(3) into a duty, and ensure that the Government must pay the remaining compensation above that amount. I am sure that that will be welcomed by hon. Members, as it reflects the desire on both sides of the House to ensure that third parties will rightly never miss out.

Amendment 1 agreed to.

Amendments made: 2, in clause 34, page 25, line 22, after first “or” insert “duty under subsection”.

This amendment is consequential on amendment 1.

Amendment 3, in clause 34, page 25, line 26, after “may” insert “or must”.

This amendment is consequential on amendment 1.

Amendment 4, in clause 34, page 25, line 29, after “or” insert “duty under subsection”.—(Joseph Johnson.)

This amendment is consequential on amendment 1.

Clause 34, as amended, ordered to stand part of the Bill.

Clauses 35 to 37 ordered to stand part of the Bill.

Clause 38

Powers to obtain rights over land

Question proposed, That the clause stand part of the Bill.

I really just want to speak to clause 38(4), and the rights created under that. Again, this refers to the devolved nations, which currently have four of the five sites being discussed, although obviously future sites may well be scattered right across the UK. We are looking, again, for some consultation in the event of rights being taken over land that would be with the devolved Government. I have an amendment on that later, but I wanted to refer to it during debate on the clause itself.

I can set out some context for the hon. Lady that might clarify the issue. Some concern was expressed in the other place about the provisions, but I assure the Committee that the Government are taking a responsible and balanced approach. We have sought to address those concerns by amending the Bill.

In clause 38 in particular, we made it clear on the face of the Bill that an order will be made only when the Secretary of State considers it appropriate, rather than when it is expedient, as the Bill said originally. Powers are restricted to what is required and proportionate for securing safe space flight operations. There are no powers in the Bill for a spaceport licence holder, launch operator or range control service provider to purchase land compulsorily.

The clause allows for the creation of orders granting rights over land. Such orders may be necessary to ensure that utilities and other supporting infrastructure can be installed and maintained—for radar or surveillance, for example. Space flight from the UK will be conducted on a commercial basis, so we expect operators to negotiate access in the vast majority of cases. Such an order, therefore, would be created only as a last resort, where a negotiation with the landowner had failed to produce a mutually agreeable outcome. Schedule 6 sets out further provision for such circumstances, including how notice for such orders should be given and how proposed orders can be objected to.

Question put and agreed to.

Clause 38 accordingly ordered to stand part of the Bill.

Clauses 39 and 40 ordered to stand part of the Bill.

Schedule 6 agreed to.

Clause 41 ordered to stand part of the Bill.

Clause 42

Challenges to and commencement of orders

I beg to move amendment 12, in clause 42, page 31, line 12, at end insert—

‘(4) An order under section 38 or 40 cannot be made in relation to a spaceport or prospective spaceport without the consent of—

(a) the Scottish Ministers, in relation to the use of land in Scotland;

(b) the Welsh Ministers, in relation to the use of land in Wales;

(c) the Northern Ireland devolved authority, in relation to the use of land in Northern Ireland.

(5) In this section, a “Northern Ireland devolved authority” means the First Minister and deputy First Minister acting jointly, a Northern Ireland Minister or a Northern Ireland department.”

This amendment would ensure that consent of devolved administrations is sought prior to the Secretary of State exercising their powers under Clauses 38 and 40.

This is the formal amendment on the point that I made in relation to clause 38 about a requirement to consult on land enforcement orders with the devolved powers in Northern Ireland, Wales and Scotland.

I thank the hon. Lady for tabling this amendment, allowing me again to address the subject of land powers, in the specific context of the devolved Administrations. I reassure her and other Committee members that there has been considerable engagement with the devolved Administrations as the provisions have been developed.

Officials have been engaging with the devolved Administrations since early 2014, when they met the Welsh and Scottish Governments to discuss ambitions to create a UK spaceport. Representatives from the devolved Administrations have since been invited to launch UK events across the country, bringing together many of those interested in becoming involved in the operations or supply chains of spaceports or space flight activities.

Alongside this general engagement, we have worked with Scotland, Wales and Northern Ireland at official level to ensure that the devolved Administrations are content with all provisions in the Bill. Specifically, on land powers, we have agreed an approach that the devolved Administrations have confirmed they are content with.

Before the introduction of the Bill, we discussed the land provisions with the Scottish Government, the Lands Tribunals for Scotland and Northern Ireland, and Registers of Scotland. We have since consulted the Scottish Civil Justice Council on the practical implications of orders under clauses 38 and 40. These organisations have confirmed that they are content with the implications for their processes and have not requested amendment to the current drafting of the clauses. Orders made on Welsh land would be subject to the same registration process as those in England, and any tribunals that were to be involved would be the same ones as for England.

The previous Minister of State for Transport spoke with the Scottish Government Minister for Transport to update him on the progress of the Bill and the proposed amendments ahead of Report in the other place. In addition, my officials continue to engage with the devolved Administrations of Wales, Scotland and Northern Ireland as the Bill makes its progress through the parliamentary process.

Going back to the clauses to which the hon. Lady’s amendment refers, I should say that an opportunity for those in the devolved Administrations to raise any concerns about a specific order is provided in schedule 6. The schedule requires that notice of a proposal to make an order under clause 38 or a land order under clause 40 must be published in local newspapers and served on the local authority. However, we expect that spaceport or launch operators, or range control service providers, will work closely with local landowners and local authorities as they develop their plans for sites and launches.

We also expect that, rather than orders under clauses 38 and 40 being necessary, operators will negotiate with landowners for access to land or for restrictions on the use of land or water near a spaceport site. Representatives of the companies hoping to develop the first spaceports have confirmed that they have indeed been working closely with local landowners and local authorities as they progress their plans.

I should also emphasise that orders that may be made under clauses 38 and 40 are compatible with the existing body of planning legislation and will not restrict the ability of local planning authorities to take planning decisions. Should Ministers in the devolved Administrations wish to call in any planning decision relating to the development of a spaceport site, their right to do so will not be affected by any provision in this Bill.

I hope that the hon. Lady is reassured that the powers in clauses 38 and 40 will not impact on the ability of local planning authorities or Ministers in Scotland, Wales or Northern Ireland to take planning decisions as they would usually. I hope she is reassured that the devolved Administrations, as well as any persons served with a notice, will be able to object to the making of orders through the process set out in schedule 6. I therefore ask the hon. Lady to consider withdrawing amendment 12.

I thank the Minister for that detailed explanation. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 42 ordered to stand part of the Bill.

Schedule 7 agreed to.

Clause 43 ordered to stand part of the Bill.

Schedule 8 agreed to.

Clauses 44 and 45 ordered to stand part of the Bill.

Schedule 9 agreed to.

Clauses 46 to 59 ordered to stand part of the Bill.

Schedule 10 agreed to.

Clauses 60 and 61 ordered to stand part of the Bill.

Schedule 11 agreed to.

Clauses 62 to 66 ordered to stand part of the Bill.

Schedule 12 agreed to.

Clause 67

Regulations: general

I beg to move amendment 21, in clause 67, page 43, line 40, leave out subsection (6) and insert—

‘(6) A statutory instrument containing (whether alone or with other provision)—

(a) regulations under section 4(2),

(b) regulations under section 5(2),

(c) regulations under section 7(4),

(d) regulations under section 7(6),

(e) regulations under section 9,

(f) regulations under section 12(7),

(g) regulations under section 18,

(h) regulations under section 22,

(i) regulations under section 34(5),

(j) regulations under section 35(3)(a),

(k) regulations under section 58,

(l) regulations under section 64, or

(m) regulations that create offences,

is subject to the super-affirmative resolution procedure.

(6A) For the purposes of this Act the “super-affirmative procedure” is as follows.

(6B) The Minister must lay before Parliament—

(a) a draft resolution, and

(b) an explanatory document.

(6C) The explanatory document must—

(a) introduce and give reasons for the resolution,

(b) explain under which power or powers in this Act the provision contained in the resolution is made, and

(c) give a detailed explanation of provisions included in the resolution.

(6D) The Minister must have regard to—

(a) any representations,

(b) any resolution of either House of Parliament, and

(c) any recommendations of a committee of either House of Parliament charged with reporting on the draft resolution,

made during the 40-day period with regard to the draft resolution.

(6E) If, after the expiry of the 40-day period, the Minister wishes to make a resolution in the terms of the draft, he must lay before Parliament a statement—

(a) stating whether any representations were made under subsection (6D)(a), and

(b) if any representations were so made, giving details of them.

(6F) The Minister may after the laying of such a statement make a resolution in the terms of the draft if it is approved by a resolution of each House of Parliament.

(6G) However, a committee of either House charged with reporting on the draft resolution may, at any time after the laying of a statement under subsection (6E) and before the draft resolution is approved by that House under subsection (6F), recommend under this subsection that no further proceedings be taken in relation to the draft resolution.

(6H) Where a recommendation is made by a committee of either House under subsection (6G) in relation to a draft resolution, no proceedings may be taken in relation to the draft resolution in that House under subsection (6F) unless the recommendation is, in the same Session, rejected by resolution of that House.

(6I) If, after the expiry of the 40-day period, the Minister wishes to make a resolution consisting of a version of the draft resolution with material changes, he must lay before Parliament—

(a) a revised draft resolution, and

(b) a statement giving details of—

(i) any representations made under subsection (6D)(a), and

(ii) the revisions proposed.

(6J) The Minister may after laying a revised draft resolution and statement under subsection (6I) make a resolution in the terms of the revised draft if it is approved by a resolution of each House of Parliament.

(6K) However, a committee of either House charged with reporting on the revised draft resolution may, at any time after the revised draft resolution is laid under subsection (6I) and before it is approved by that House under subsection (6J), recommend under this subsection that no further proceedings be taken in relation to the revised draft resolution.

(6L) Where a recommendation is made by a committee of either House under subsection (6K) in relation to a revised draft resolution, no proceedings may be taken in relation to the revised draft resolution in that House under subsection (6J) unless the recommendation is, in the same Session, rejected by resolution of that House.

(6M) In this section the “40-day period” means the period of 40 days beginning with the day on which the draft resolution was laid before Parliament under subsection (6B).”

The amendment provides for the use of the super-affirmative procedure rather than, when applicable, the affirmative procedure for considering regulations and secondary legislation. The super-affirmative procedure provides that a Minister must lay a draft resolution and explanatory document before both Houses and take account of any representations.

The amendment provides for the use of the super-affirmative procedure rather than, when applicable, the affirmative procedure for considering regulations and secondary legislation. As we know, the super-affirmative procedure provides that a Minister must lay a draft order and an explanatory document before both Houses and take account of any representations.

I do not intend to speak for long to the amendment, because it was previously debated at some length in the other place. It is about parliamentary scrutiny. It aims to change the Bill so that a significant statutory instrument arising from the delegated powers consistently go through a super-affirmative procedure, which will mean that it is debated in both Houses, rather than the negative procedure, when it would automatically become law without proper parliamentary debate or scrutiny.

I will set out the case why such statutory instruments should be under the affirmative procedure each and every time they are brought forward. The Opposition have expressed great concern that the Government are attempting to evade proper parliamentary scrutiny on clause 67. Let me be clear that we support the Bill, but it is a skeleton Bill. It is already difficult to scrutinise properly in its current format. My colleagues in the other place raised the point that crucial regulations will not even be consulted on until next year, and will not come before Parliament for nearly two years at the very earliest.

I accept that we must consider rapid technological change and advances in the space industry—those points were made by the Minister in the other place—but how can we make sure that we get the proper legislative framework in place for the space industry, which is constantly developing? The Government and future Governments in years to come still need to be held to account, and Parliament needs to scrutinise legislation properly. I am sure that everyone in this Committee Room wants the United Kingdom’s space industry to grow. However, that should not come at the expense of parliamentary scrutiny. Will the Minister assure us that he will consider the points raised and set out the Government’s position for future statutory instruments under the Bill?

The amendment is, as the hon. Gentleman referred to, about the potential delay for the industry from considering regulations. I seek assurances from the Minister that the timescale of two years that seems to be being discussed is erroneous, because otherwise we will not be launching anything in 2020. That timescale seemed to be referred to in the House of Lords—the hon. Gentleman also referred to it—but it would kick the industry into the long grass again. This process started in 2014 and we are in 2018. There had been an aspiration to be ready to launch from the UK in 2020, if the vehicles are ready. There is an urgency and I seek reassurance that we are getting on with it.

Hon. Members may be aware—my noble Friend mentioned this—that a similar amendment was tabled in the other place. The Government reflected on the concerns of noble Lords and amended the Bill to impose a statutory duty to carry out a public consultation before making any regulations under the affirmative resolution procedure. The Bill now includes a requirement for a report by the Secretary of State on the consultation to be laid before Parliament. As my noble Friend the Minister made clear in the other place, a public consultation would invite a response from all interested parties. Subsequent regulations that materially change the substance of the original regulations would also be subject to public consultation.

The amendment tabled by the hon. Member for Kingston upon Hull East goes much further than that by imposing the super-affirmative procedure on affirmative regulations. As I have said, the Government have listened and taken on board the concerns raised in the other place, and the Bill now ensures that there is the enhanced scrutiny of affirmative regulations. The amendment would lead to a duplication of effort.

I assure hon. Members that it is the Government’s intention to continue to build on the open collaboration that has taken place throughout the development of this legislation—from publishing the Bill in draft, to the publication of policy scoping notes, to committing to formally consult on the draft regulations prior to laying them. As the hon. Member for Middlesbrough (Andy McDonald) noted on Second Reading, the Government have taken a very open attitude in developing this legislation and in engaging with hon. Members and noble Lords in the other place to ensure we have a successful Bill. We want that to continue as we go on to the next stages of secondary legislation, consultation on guidance and so forth.

The question from the hon. Member for Central Ayrshire on the timing of the laying of statutory instruments is a novel and complex challenge. I know she appreciates that that requires detailed policy development, building in parallel internal expertise to enable us to deliver an effective regulatory regime. There is a wealth of best practice in the industry and we need to work with stakeholders to identify how we can best design the regulatory framework and the subsequent legislation on the basis of being informed adequately by those discussions. I can confirm that it is the Government’s intention to formally consult as soon as the draft statutory instruments are available.

I hope that that has assured hon. Members that the approach will continue as we develop secondary legislation, and that the hon. Gentleman will withdraw the amendment.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 67 ordered to stand part of the Bill.

Clauses 68 to 71 ordered to stand part of the Bill.

New Clause 1

Grant of licences: assessments of environmental effects

“(1) This section applies to—

(a) a spaceport licence;

(b) an operator licence authorising launches of spacecraft or carrier aircraft.

(2) The regulator may not grant an application for a licence to which this section applies unless the applicant has submitted an assessment of environmental effects.

(3) In this section “assessment of environmental effects”—

(a) in relation to a spaceport licence, means an assessment of the effects that launches of spacecraft or carrier aircraft from the spaceport in question, or from launches of spacecraft from carrier aircraft launched from the spaceport, are expected to have on the environment;

(b) in relation to an operator licence authorising launches of spacecraft or carrier aircraft, means an assessment of the effects that those launches are expected to have on the environment.

(4) If or to the extent that the regulator directs, the requirement imposed by subsection (2) to submit an assessment of environmental effects may be met by submitting—

(a) an equivalent assessment prepared previously in compliance with a requirement imposed by or under another enactment, or

(b) an assessment of environmental effects prepared in connection with a previous application.

The regulator may make a direction under this subsection only if satisfied that there has been no material change of circumstances since the previous assessment was prepared.

(5) The regulator must take into account the assessment of environmental effects (including any assessment submitted as mentioned in subsection (4) in deciding—

(a) whether to grant a licence to which this section applies;

(b) what conditions should be attached to such a licence under section 12.

(6) The regulator must issue guidance about—

(a) the form, contents and level of detail of an assessment of environmental effects;

(b) the time for submitting an assessment of environmental effects;

(c) the circumstances in which the regulator will or may give a direction under subsection (4).

Guidance under paragraph (a) may specify matters that are to be dealt with in an assessment of environmental effects only if the regulator so requires in a particular case.”—(Joseph Johnson.)

This new clause requires assessments of environmental effects to be carried out before the regulator can grant certain licences, and makes further provision about such assessments.

Brought up, read the First and Second time and added to the Bill.

New Clause 2

Potential impact of leaving the European Union on the United Kingdom’s space industry

“(1) The Secretary of State must carry out an assessment of the potential impact that leaving the European Union will have on the United Kingdom’s space industry.

(2) The assessment under subsection (1) must make reference to the following areas—

(a) membership of the European Space Agency;

(b) the impact of the UK’s exit from the EU on research and development and access to funding, including Horizon 2020;

(c) the free movement to the UK from the EU of those who work in the space industry;

(d) the UK’s participation in the Galileo and Copernicus programmes; and

(e) the impact of the UK leaving the Single Market on supply chains within the space industry. (3) The Secretary of State must lay a report of the assessment under subsection (1) before Parliament within one year of this Act passing, and once in each calendar year following.”—(Dr Philippa Whitford.)

This new clause would ensure the Government prepares and publishes an impact assessment of the potential impact on the space industry as a result of the UK leaving the EU.

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

In light of the process of leaving the European Union, the clause seeks, as was referred to by hon. Members earlier, to consider the impact. We have looked at the impact assessments, particularly at the aerospace assessment, when we had the opportunity to view what are called the Brexit papers, and what we saw was a description of the aerospace industry and comments from the industry, but not the impact.

Although the European Space Agency is separate to the EU, it receives significant funding from it. With the new clause, therefore, we seek assurances that the UK will still be able to be part of the agency, to be active in it and, as the Minister said earlier, to be able to bid for contracts under Copernicus or Galileo for satellite work, in which the UK is a leading player. The clause simply calls for an assessment of the impact on the developing space industry of leaving the EU, to ensure that, as negotiations go forward, the Government set themselves to achieve the best deal for the space industry.

As the hon. Lady knows, the UK has played a major part in developing the main EU space programmes, Galileo and Copernicus, which have supported the rapid growth of the UK space sector and contributed directly to our prosperity. The UK is recognised for its specialist capability in the area of earth observation, and has been especially involved in the development of the Galileo security modules and encryption, which are integral to a secure and resilient earth observation system. The Government recognise that, which is why the future partnership papers I referred to earlier, which were published in September 2017, set out that, given the unique nature of the space programmes’ applications to security as well as to science and innovation, and the extent of the UK’s involvement, the EU and the UK should discuss all options for future co-operation, including new arrangements subsequent to our departure from the European Union.

We are working to ensure that we get the best deal with the EU to help support the sector’s continued strong growth. The agreement that successfully concluded phase 1 of the exit negotiations in December 2017 makes clear that, as part of the financial settlement, the UK will remain part of the space programmes until at least the end of this EU budget period in 2020. That provides significant certainty to industry to enable it to continue to bid for and win contracts from the space programmes.

As the hon. Lady said, the European Space Agency is a non-EU organisation. We are a full member of it and have every intention of continuing to be so long after we leave the European Union, and we are contributing record sums to its budget.

Does the Minister therefore foresee the UK continuing to pay funds? If so, will they be paid directly to the ESA or via the EU? Obviously, the EU is a significant funder of the ESA.

The European Space Agency delivers a number of programmes for the European Union, but we continue to be a member of the ESA in our own right and, as I said, we are contributing record amounts—more than €1.4 billion in the current budget period.

For absolute clarity, is the Minister suggesting that payments via the EU could still be possible, in contrast with the Foreign Secretary’s position on that matter?

I am not going to parse comments by others that I have not seen, but I can confirm that we remain a full member of the European Space Agency in our own right, we are contributing record amounts to its budget, and we have every expectation of continuing to be a full member of that organisation long into the future.

On the new clause’s requirement to undertake an assessment, the Secretary of State for Exiting the European Union provided the relevant Committees with reports for many sectors, including one for the UK space sector, on 27 November. As the hon. Member for Central Ayrshire said, that report contained a description of the sector, the current EU regulatory regime, existing frameworks for the facilitation of trade between countries in the sector, and sector views.

This is my first Bill Committee, so bear with me, Mr Bailey. The new clause suggests that the Secretary of State should have to make an annual assessment of the impact of our leaving the EU on research and development, including Horizon 2020, every year well after 2020, but Horizon 2020 clearly finishes in 2020. Does the Minister agree that it seems illogical to assess something that has already finished?

I obviously note the point about the duration of Horizon 2020, which does indeed end at the end of 2020, but we have committed as a Government to exploring all options for future participation in the next set of framework programmes, which will start after 2020. We have every hope that those discussions will conclude successfully, because those research programmes deliver huge value to our science and research communities and to our universities all over the country, including in Scotland.

On that basis, I ask the hon. Member for Central Ayrshire to consider withdrawing her new clause.

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Bill, as amended, to be reported.

Committee rose.

Written evidence reported to the House

SIB01 Thomas Cheney

SIB02 Fieldfisher

Trade Bill (First sitting)

The Committee consisted of the following Members:

Chairs: † Philip Davies, Joan Ryan

† Badenoch, Mrs Kemi (Saffron Walden) (Con)

Bardell, Hannah (Livingston) (SNP)

† Brown, Alan (Kilmarnock and Loudoun) (SNP)

† Cummins, Judith (Bradford South) (Lab)

† Esterson, Bill (Sefton Central) (Lab)

† Gardiner, Barry (Brent North) (Lab)

† Hands, Greg (Minister for Trade Policy)

† Hughes, Eddie (Walsall North) (Con)

† Keegan, Gillian (Chichester) (Con)

† McMorrin, Anna (Cardiff North) (Lab)

† Prisk, Mr Mark (Hertford and Stortford) (Con)

† Pursglove, Tom (Corby) (Con)

† Rashid, Faisal (Warrington South) (Lab)

† Smith, Nick (Blaenau Gwent) (Lab)

† Stewart, Iain (Milton Keynes South) (Con)

† Vickers, Martin (Cleethorpes) (Con)

† Western, Matt (Warwick and Leamington) (Lab)

† Whittaker, Craig (Lord Commissioner of Her Majesty's Treasury)

† Wood, Mike (Dudley South) (Con)

Kenneth Fox, Committee Clerk

† attended the Committee

Witnesses

Nick Dearden, Director, Global Justice Now

Nick Ashton-Hart, Trade Policy Consultant and Associate Fellow, Geneva Centre for Security Policy

Christopher Howarth, Senior Researcher, House of Commons (formerly a senior political analyst at Open Europe)

James Ashton-Bell, Head of Trade and Investment, CBI

Chris Southworth, Secretary General, International Chamber of Commerce UK

Tony Burke, Assistant General Secretary, Unite the Union

Martin McTague, National Policy Chairman, Federation of Small Businesses

Public Bill Committee

Tuesday 23 January 2018

(Morning)

[Philip Davies in the Chair]

Trade Bill

Before we begin, I have a few preliminary points to make. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication and a motion to allow us to deliberate in private about our questions before the oral evidence sessions. In view of the limited time available, I hope we can take those matters without too much debate or delay.

I first call the Minister to move the programme motion, which was decided by the Programming Sub-Committee yesterday.

Motion made, and Question proposed,

That—

(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 23 January) meet—

(a) at 2.00 pm on Tuesday 23 January;

(b) at 11.30 am and 2.00 pm on Thursday 25 January;

(c) at 9.25 am, 2.00 pm and 5.30 pm on Tuesday 30 January;

(d) at 11.30 am on Thursday 1 February.

(2) the Committee shall hear oral evidence in accordance with the following Table:

Table

Date

Time

Witness

Tuesday 23 January

Until no later than

10.25 am

Global Justice Now; Computer and Communications Industry Association; Christopher Howarth, former Senior Political Analyst, Open Europe

Tuesday 23 January

Until no later than

11.25 am

CBI; International Chambers of Commerce UK; Unite the Union; FSB

Tuesday 23 January

Until no later than

2.45 pm

Dr Lorands Bartels, University of Cambridge; Dr Roiger Hestermeyer, King’s College London; Hansard Society Jude Kirton Darling MEP

Tuesday 23 January

Until no later than

3.30 pm

George Peretz QC, Monckton Chambers; Professor Alan Winters, UK Trade Policy Observatory; Law Society Scotland

Tuesday 23 January

Until no later than

4.15 pm

British Ceramic Confederation; UK Steel Manufacturing Trade Remedies Alliance; British Chambers of Commerce

Tuesday 23 January

Until no later than

5.00 pm

UK Finance; British Retail Consortium Standard Chartered Bank

Thursday 25 January

Until no later than

12.00 pm

Devro plc; Scotch Whisky Association Food Standards Scotland

Thursday 25 January

Until no later than

1.00 pm

Business for Scotland; British Furniture Association Hologic

(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 3; Schedules 1 to 3; Clauses 4 and 5; Schedule 4; Clauses 6 to 12; new Clauses; new Schedules; remaining proceedings on the Bill;

(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 2.00 pm on Thursday 1 February. —(Greg Hands.)

Manuscript amendment made: In the table on page 2 of the amendment paper, in the first entry for Tuesday 23 January, leave out

“Computer and Communications Industry Association”

and insert

“Nick Ashton-Hart, Trade Policy Consultant and Associate Fellow, Geneva Centre for Security Policy”.—(Greg Hands.)

Main Question, as amended, put and agreed to.

Ordered,

That—

(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 23 January) meet—

(a) at 2.00 pm on Tuesday 23 January;

(b) at 11.30 am and 2.00 pm on Thursday 25 January;

(c) at 9.25 am, 2.00 pm and 5.30 pm on Tuesday 30 January;

(d) at 11.30 am on Thursday 1 February.

(2) the Committee shall hear oral evidence in accordance with the following Table:

Table

Date

Time

Witness

Tuesday 23 January

Until no later than

10.25 am

Global Justice Now; Nick Ashton-Hart, Trade Policy Consultant and Associate Fellow, Geneva Centre for Security Policy; Christopher Howarth, former Senior Political Analyst, Open Europe

Tuesday 23 January

Until no later than

11.25 am

CBI; International Chambers of Commerce UK; Unite the Union; FSB

Tuesday 23 January

Until no later than

2.45 pm

Dr Lorands Bartels, University of Cambridge; Dr Roiger Hestermeyer, King’s College London; Hansard Society Jude Kirton Darling MEP

Tuesday 23 January

Until no later than

3.30 pm

George Peretz QC, Monckton Chambers; Professor Alan Winters, UK Trade Policy Observatory; Law Society Scotland

Tuesday 23 January

Until no later than

4.15 pm

British Ceramic Confederation; UK Steel Manufacturing Trade Remedies Alliance; British Chambers of Commerce

Tuesday 23 January

Until no later than

5.00 pm

UK Finance; British Retail Consortium Standard Chartered Bank

Thursday 25 January

Until no later than

12.00 pm

Devro plc; Scotch Whisky Association Food Standards Scotland

Thursday 25 January

Until no later than

1.00 pm

Business for Scotland; British Furniture Association Hologic

(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 3; Schedules 1 to 3; Clauses 4 and 5; Schedule 4; Clauses 6 to 12; new Clauses; new Schedules; remaining proceedings on the Bill;

(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 2.00 pm on Thursday 1 February.

Resolved,

That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Greg Hands.)

Copies of written evidence that the Committee receives will be made available in the Committee Room.

Resolved,

That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Greg Hands.)

The Committee deliberated in private.

Examination of Witnesses

Nick Dearden, Nick Ashton-Hart and Christopher Howarth gave evidence.

Before we start our formal session, I invite members of the Committee to declare any relevant interests.

Q Thank you. We will now hear oral evidence from the witnesses. Before calling the first Member, I remind the Committee that questions should be limited to matters within the scope of the Bill, and we must stick to the timings in the programme motion that have been agreed. For this session, we have until 10.25 am at the latest.

Will the witnesses please introduce themselves for the record?

Nick Dearden: I am Nick Dearden, director of Global Justice Now.

Nick Ashton-Hart: I am Nick Ashton-Hart from the Geneva Centre for Security Policy.

Christopher Howarth: I am Christopher Howarth, former senior political analyst at Open Europe, and now senior researcher in the House of Commons.

Q Nick Ashton-Hart, how easy will it be to simply roll over and replicate the existing trade agreements that we have through the EU? In your view, does the Bill make provision for appropriate levels of consultation, parliamentary scrutiny and accountability?

Nick Ashton-Hart: Thank you for inviting me—this is a first for me. To answer the first question, it depends very much on whether it is in the interests of the counterparties to those agreements to roll them over without modification. Since those agreements were created for a number of member states other than just us, those partner countries will go through a process of evaluating the net trade benefit to them of applying those terms to us alone. Where they have an interest in changing the terms to their benefit, they will seek to do so, because that is what Trade Ministries do—they seek economic benefit for their country, and they expect you to seek it for yours. Unless the trade benefits for them are exactly the same for us alone as they are for 28 other countries, they are going to ask for changes in their interests.

If the shoe were on the other foot, I suspect we can all imagine that it would be hard for our Trade Ministry officials to come to you all and say, “Well, we have just copied an agreement with a large trading bloc for one country’s benefit because it is in a hurry.” I suspect we will find that this will take some time—trade agreements always do.

Before anyone else answers, may I ask Members and witnesses to speak up so that we get everything on the record? That would be perfect. Sorry—the acoustics in this room are terrible.

Q Perhaps Nick Dearden could pick up the same topic and, in light of what Nick Ashton-Hart has said, comment on the use of Henry VIII powers within the Bill.

Nick Dearden: We are really concerned about the lack of scrutiny and accountability in the Bill. Global Justice Now, and a number of other organisations, worked on the Transatlantic Trade and Investment Partnership for a long time. We had some concerns about that agreement—not with the potential tariff areas, but with the non-tariff areas. In modern trade deals, non-tariff aspects make up the bulk of the agreement. That means everything from regulation—we probably all now know more than we would like about chlorinated chickens, but that is just one symbol of the regulatory aspects of trade deals that really concern the public, and I think many parliamentarians, too. Intellectual property, which has a direct correlation to the price of medicines and the price that the NHS may bear for them, through to local government procurement and e-commerce can also be added to that.

Modern trade deals touch on huge areas of public policy, which should be within the scope of Parliament to control. We are concerned that the Bill does not allow for that scope. As Nick said, it is difficult for us to imagine that many of these deals will be a straight cut and paste. That is why the explanatory notes allow for substantial changes to be made to the deals, but without the requisite scrutiny that we believe Members deserve and require if we are to have proper control of our trade policy.

Chair, I know that others on my side wish to come in, but those on the other side may wish to speak.

Q Can I follow up? Can you at least suggest what sort of changes you think are necessary? How do you think Parliament can deliver what you have just indicated you want?

Nick Dearden: Certainly. We think there should be several stages. First, before the negotiations, Parliament or a parliamentary Committee should give consent to those negotiations and should have some role in setting out the broad framework or objectives. We also think that at that stage the Government should have a responsibility to conduct and publish impact assessments and public consultations. It is set out in great detail how those should be conducted in the European Union and the United States.

As the negotiations are proceeding, Parliament should be able to scrutinise Ministers on what they are negotiating. It should be able to see negotiating texts. We think there should be a presumption that negotiating texts should be transparent to everybody, but even if there are specific reasons why they cannot be, they should certainly be transparent to MPs. If the Government want to change their mandate, they should have to come back to Parliament or to a parliamentary Committee to ask for that.

When negotiations are finalised, there should be a guaranteed debate and, at the least, an up-or-down vote. That would make a huge difference, because at the moment at none of those stages does Parliament have any control: it is not allowed to know what is going on in the negotiations; it has no role in setting the mandate; it is not allowed to see the negotiating texts; it is not guaranteed a debate; and it cannot vote against a trade deal. We think that what I have suggested would bring us into line with other modern democracies.

I will give a very small example. CETA, which still has not had a proper debate in the House, has been discussed in detail for days by the Wallonian Assembly in Belgium. They take seriously the regulatory aspects of trade deals and we think that, post-Brexit, we need to be looking at a similar model.

Q What other countries do you think we should be looking to for the way they do these things?

Nick Dearden: We know that post-Brexit we want to be doing a trade deal with the European Union and the United States, so they are good places to start. Both political entities have set out in detail a number of ways in which they negotiate and give Congress or Parliament power over trade deals. In the United States, a 700-strong citizen advisory board is allowed to see all the texts. They have to have very specific public consultations. At the very least, Congress gets an up-or-down vote at the end, and if it does not fast-track trade deals, it gets substantially more power than that.

In the European Union, the Parliament gets to feed into a mandate—the Council gets to set a mandate. Various parliamentary Committees get to look at, scrutinise and give recommendations to the Executive for how a trade deal would affect jobs, the economy, the environment, human rights, or whatever else we may be concerned about. At the end, the Parliament is given a proper debate and an up-or-down vote.

On top of that, as I have already said, many trade deals are required to go back to member Parliaments for them to have a say, too. If you look at how Denmark, Germany, the Netherlands or Finland operate, they already exercise far more scrutiny over external EU trade deals than the UK does.

Q Mr Dearden, you say that Parliament should approve Government entering into negotiations. Given that the Government are talking to at least 100 countries at all times about trade, how would that work in practice?

Nick Dearden: There are various ways in which you could do it. One of the ways is to have a Committee set up particularly to scrutinise the Government on this. When the time comes to enter negotiations on a deal, it will discuss with the Government what their priorities are and they will say, “We think this is acceptable and this is not acceptable.” It will be brought in from the very beginning.

I think that is important, because the Secretary of State has said a number of times, “I really want to avoid a TTIP-style situation, where we end up with a deal in discussion that has lost public support and lost a lot of parliamentary support.” To do that, we must have that buy-in from the very beginning, and that must require some degree of parliamentary discussion about what the objectives for this country should be in a trade deal with country X.

Q That sounds nice, but how does that work in practice? At what point are Ministers, or indeed our ambassadors, allowed to talk to another country?

Nick Dearden: That would probably depend on exactly when proper trade negotiation starts and we are properly discussing a trade deal.

Q How do you define that?

Nick Dearden: You can look at how it happens in Denmark, for example, because they do exactly that. They have a parliamentary Committee that sets a mandate at the initiation of trade talks. I understand that obviously the Government are talking to loads of different countries at any one time about possible trade, but within each of the countries they are talking to, they must have objectives. It is for Parliament to scrutinise, set and agree to those objectives.

At the moment, I do not feel that we have that ability. We are talking to a lot of countries; we have 16 trade working groups currently set up between the Secretary of State and other countries. We know, because we have read it in the media, that various negotiations are ongoing with some of those countries, but Parliament, and we as civil society, have no right to know what is being discussed, when it is being discussed and with whom. That is a profound democratic deficit. At the very least, if these are formal working groups involved in trade discussions, we should know what they are talking about, to whom and when.

Q Would that apply to memorandums of understanding or bilateral agreements? You are talking in generalities, and I am trying to find out the facts.

Nick Dearden: I would say at the very least, at this point in time, for each of the trade working groups that has been set up, there should be a mandate set by parliamentary Committees.

Q What kind of trade agreement do you think is a good one? Some people think they are just a playground for the super-rich.

Nick Dearden: There is something to be said for that if you look at previous trade agreements such as TTIP—how they have worked and how people have felt about them. There is a big populist backlash going on around the world at the moment, part of which is a result of people feeling there is a democratic deficit in the trade agreements being signed.

We have lots of ideas for how we could construct a trade agreement and how we would want to do it, and I should say now that we are absolutely not against trade; even with TTIP, we were not against the tariff aspects of that trade agreement. When it comes to public policy, it is different. Again, I am not against international co-operation, in trade agreements or other agreements, but there has to be a democratic basis for how those things are decided.

Q So free trade agreements are a good thing?

Nick Dearden: They might be or they might not. It depends how they are done, who they are done with and what the terms are. If you have two very different types of country, in terms of wealth and power, obviously there can be a big problem because some people have a much bigger negotiating hand than others. That is what we have seen with economic partnership agreements, which is why we would prefer, for example, to give tariff-free access to goods coming from those countries rather than do a reciprocal agreement, which also puts what we believe to be unsustainable and unhelpful conditions on the African country concerned.

My concern is not with the follow-on scrutiny of events that happened, but more the idea that somehow Parliament should require our existing teams in negotiations to seek approval before they start those conversations. That is my concern, but I will not delay the Committee any longer.

Q You were talking about the way in which other countries do the preparation of mandate and scrutiny of the process of creating a trade agreement. I wonder whether perhaps Nick Ashton-Hart could talk about the system in Australia and how the Joint Standing Committee on Treaties does it—or perhaps the system in Germany. Could one of you talk about that?

Nick Ashton-Hart: I would also say on the point about when terms of reference are set and whether our ambassadors need permission before they go and talk, I worked with most of our trading partners in Geneva and dozens of other countries. There are a lot of commonalities in how legislatures interact with Trade Ministries. Generally, the Trade Ministry will say, “We want to achieve these objectives over the course of this Parliament or this year,” and that is done in consultation with the relevant parliamentary Committees.

Ambassadors explore ideas with countries all the time; they do not need a mandate to do that. When it becomes clear that there is interest in formalising something, a process goes on in the capital to say, “Okay, what is our net benefit to be achieved?” To do a deal of any configuration with country X, the economics teams in the Ministry would go away and say, “Where is the net trade-generative agreement here? What sectors would we have to include? What likely trade-offs would we have to do with the other side?”

But that process would generally be informed by a consultation with the stakeholders in the industrial sectors that have most to gain or lose, the unions in those sectors and the like, so that before you even get into a negotiation, you know where your benefits lie, you have your stakeholders signed up to what you are trying to achieve and the other side knows that you have those things.

As I pointed out in my comments, the reason why you see so many leaks in trade negotiations is that it is in the interest of one party or another to put pressure on the other in their capital. Leaks do not happen by accident; they are deliberate.

I think we are familiar with that!

Nick Ashton-Hart: You are familiar with how that dynamic works. It is no different in trade negotiations.

What I have described is pretty much a common process everywhere in the world, and it is not accidental; it is because the political economy demands that you have the backing, as a negotiator, at home when you are sitting across the table from your counterparties and that they know that you have that. They can watch your processes of consent and agreement and evaluate where your weaknesses are—where there are buttons they can push, but also where you are likely to need support. People know that you have to get to a sustainable deal also, and sometimes you have to do a concession at the right time to solve a problem in a domestic constituency for your counterparty, provided that it is in your interest to do so.

Q As Mr Dearden will know, this Bill is not concerned with the making of future trade deals. However, of the 40 trade deals that we are seeking to transition, could you set out for the Committee which you supported at the time and which you opposed?

Nick Dearden: I do not have a complete list of all of them, but I do know that we have very serious concerns about the economic partnership agreements with African countries, for example, because of some of the conditions that are placed on those countries. We have particular concerns, because we worked on it, with the CETA agreement with Canada, again related to the so-called non-tariff barriers in that agreement.

One problem is that no matter what we thought about the agreements when they were originally negotiated, they are going to look different when it comes to being translated into or replaced by a UK-Canada or UK-African country agreement; they are just going to be different deals. Given that, I think it only right that there be some degree of scrutiny. It says in the Bill, “Well, we aim for these deals to be as similar as possible.” I understand that, but it may well be that some of the deals will be more similar than others.

For the deals that are more similar, I think it would be right and proper for Parliament to say, “Okay, fine. We will wave that one through. We understand that that is continuity.” But for other deals—what a substantial amendment or change in the deal would look like is not defined—we believe that Parliament should have proper scrutiny and proper ratification powers. That is particularly important for deals that have not even been through the proper ratification process in the European Union—examples involve Singapore, Japan and Vietnam. Those deals may all be replaced by UK deals, but they have not been through the proper process as yet in the European Union, and we do not want to see a situation in which they are taken on just because we are so rushed that we do not have time to really think about the consequences of the deals.

Q Did you support any of the deals at the time?

Nick Dearden: As a campaigning organisation, we are likely to pick up only those deals—

Q Would you say that you are supportive of free trade?

Nick Dearden: I would say we are supportive of trade, but it depends on how it is done. Absolutely. For example, I would say that an awful lot of trade that has happened in the European Union over the last 40 years —not all of it, because some of it we would be concerned about—has raised standards. It has raised standards for producers and for consumers, and that is positive. In the European Union, there is at least a balancing of trade and economic interests with social interests and environmental interests and with democratic scrutiny and accountability, so it is possible to do that.

Q This question is for Nick Ashton-Hart. Given the sheer number and the complexity of the deals that you are describing, do you believe that it is possible to have all the agreements ready to go on day one after Brexit?

Nick Ashton-Hart: There are so many moving parts. Assuming that there is a date, that we know it, and that all counterparties have a few years’ advance warning of it—the date that matters is a date on which existing agreements will no longer be available to us—we would have to look at their approval process and count backwards to find the date by which we would have to conclude our negotiations with them. That is the only way that you would know what your actual hard finishing date was for any of those agreements. I do not know if that analysis has been done by the Department for International Trade—I am hoping that it has done some of it, and I am guessing that it probably has. Say it takes two years, and we have two years. We are not going to finish an agreement tomorrow, so that means that that deal will not be done in time. What percentage of our GDP, and of our exports and imports, is that deal, which will not be available?

That is the first thing that you would have to do is know how much negotiating time you have, and with which parties. You would then have to prioritise deals based on their economic importance to us. I am not sure what the decision tree is within the Ministry—I am sure that there must be one—for what it prioritises. The only way that you all will have a clear picture of the deadlines is to work backwards. I have seen no discussion at all of how long it takes our counterparties to conclude approving an agreement, but it can be a considerable time, depending on the country. I imagine it would be very difficult. The short answer is that it is hard for me to imagine that there are even enough people to negotiate that many deals simultaneously with that many parties, unless you had several years to do it.

Q Mr Dearden, you seemed to indicate that there are some countries with which you do not think we should do trade deals. Is that a fair comment?

Nick Dearden: It probably is, yes, because there may be countries where, for example, the human rights situation is so bad that any trade deal that you do is effectively reinforcing and giving succour to a regime to which we would not want to give succour.

Q Name some of them.

Nick Dearden: For example, there are serious human rights abuses in Turkey at the moment. The Prime Minister, as many people know, was the first political leader to visit Donald Trump in the United States after he was elected. After visiting President Trump, she went to President Erdoğan of Turkey, and a trade deal was part of the negotiations there. At that time, she also sold £100 million-worth of weapons to Turkey. That was an inappropriate thing to do, and it was connected with our ability to conduct a trade deal with that country, post Brexit. You may disagree with that, of course, but at the very least, there should be parliamentary control over those kinds of actions and activities. I do not think that just because they are in the international realm, they should be negotiated under royal prerogative; they have an impact on policy here. MPs should be apprised of that and should authorise it.

Q Going back to the issue of parliamentary scrutiny, under schedule 2, either House of Parliament can annul the regulations and prevent them from entering into law. Why do you regard that as inadequate?

Nick Dearden: That is a really important point. On the public policy aspects of trade deals, traditionally we thought that we did not need to worry about whether we ratified the trade deal, because Parliament would have the power to authorise implementing legislation for the various things that we needed to do to put the trade deal into effect. There is a problem with that: once a trade deal is signed and ratified, it really makes no difference whether Parliament enacts that legislation or not—we are committed to it under international treaty. It is too late to say no. Normally, we do not intend to say no—we have done the deal—but if there was a real dispute, and Parliament said, “We have a problem with that”, we would have real difficulty in stopping it, because we had already agreed to do it.

Various things that impact on public policy are never brought forward for implementation as legislation anyway. One of the things that people were particularly concerned about with TTIP, as you probably know, was the investment protection tribunals that allow overseas companies to sue Governments for various things—for what they regard as unfair treatment, for the indirect expropriation of assets and so on. There is a lot of public concern about those bodies, because people feel that this infringes on democratic sovereignty and accountability, yet those things never need to be signed off by Parliament. They just exist in the trade deal, from day one, so Parliament does not have a say in whether things that have been proved to have tangible impacts on public policy come into effect. That is one example of why it is important for the ratification process to be seen as directly impinging on public policy, and why scrutiny and accountability are necessary.

Q What impact assessment should be conducted on the process, and why?

Nick Ashton-Hart: Several. I think first for the agreements you wish to transition you would look at the net economic benefit of transitioning them. You would then have to look at what likely changes the other party would be asking for—they would be doing the same analysis—and what changes you would ask for. You have to assume the worst. You have to assume the other party is going to ask for changes, and you have to assume that you will need to ask for some also. If you get lucky and you do not have to do any of that, that is great, but you cannot do this on hope. You have to do it on the worst-case scenario.

I think at that point you would have to bring in stakeholders to help you make that analysis. The expertise to do this is not all in government. It never is. It is also in the private sector and in academia. At the point where you had that you would know the basis on which you were transitioning the arrangements. This is not a trivial undertaking. Because of the regulatory impacts that newer deals, especially, have, you would also have to look at the consequences of certain changes to other arrangements.

For example, if there are most-favoured nation clauses in a deal that you wish to transition, as there often are, and if any changes are made to that arrangement when you transition it, it can impact all the other deals that have MFN clauses. This is now being discussed publicly, related to whether the EU could do an expanded services deal with us, and who would automatically get the benefits of it. For example, a Canadian deal would provide that the EU would have to give the benefits they give us to several other parties, Japan and Canada included.

We are in the same situation because there are MFN clauses in these agreements that we wish to transition, so you have to analyse the net economic benefit to you of the deal in question, but also the consequences of any changes to other deals that you want to transition, because you can guarantee that, for any MFN clause in any other deal, the parties that you are going to negotiate with will be looking at what you are giving in these other discussions and of course expecting to receive in them also.

There is a good reason why trade arrangements are slow, and there are not many going at one time. It is because this is an enormous number of moving parts to try to manage at one go—for us but also for the other Trade Ministries, because deals with us are not the only deals that they have going or that they are working on. If I were you, I would be asking the Ministry: “Look, what is your plan for dealing with these different eventualities?”

Q You mentioned things such as stakeholders and scrutiny a few times. Obviously the UK has not been directly responsible for trade deals for 40 years. Do you think this is the right opportunity to make a Bill that is more democratically, socially and economically transparent?

Nick Ashton-Hart: I think it is essential, aside from the benefits in terms of being a democracy that is looked up to by others as an example, and not wanting to set an example that is far below the minimum level of accountability in any other developed economy, which is what we would be doing—we would be setting a precedent here that should concern everyone.

Secondarily, it is in our interest to do that, because there is going to be a political hue and cry about various provisions in probably all the 40-plus deals. There is going to be something that someone does not like about them. That is the nature of trade agreements. Some sectors win and some lose. Losers complain and winners keep quiet mostly, because they do not want to provoke people who won. The objective is to have a net benefit, but that does not mean that within that there are not winners and losers.

There is going to be controversy associated with these arrangements. Having effective and robust consultation now will help insulate the negotiating process and provide a rationale for all of you, the Members, to go to your constituencies and say, “Look, there is a reason why we are doing it this way. We have had an oversight process. Here is what the country will get out of this.” For those districts or constituencies that will be negatively impacted by a deal, you will be able to go to your constituents and say, “Okay, on this one we may not do so well, but we will do well on this and this and this, and the net benefit to all of us is positive.” The consultation process provides all of you with the ammunition you need to explain why at a real level—the firm level and the sectoral level—transitioning the arrangements in the way that they will be agreed is in your constituents’ interests and the national interest.

Without that dialogue, you do not have that ammunition. Every time you are hit with a news story, you will have to go and ask the Ministry concerned, “How do I counter this?” Being reactive all the time on trade policy has a very unhappy history of negative views of trade in general, and of deals in particular. Criticism does not have to be true to stick, as I am sure we are all familiar. I would say—Nick might disagree—that there was some criticism of TTIP and provisions that were alleged would be in the deal, such as things that affected NHS procurement, which were actually excluded from the negotiating mandate. The fact that those criticisms were levelled did not stop there being a political cost to the negotiation as a whole from the allegation that those provisions would be inbuilt. On a pragmatic basis, there is a very strong argument for a robust consultation process, but the negotiators themselves are going to need information that is in the private sector and in academia as part of their negotiating arguments, and without a robust consultation process they will not have access to those.

Can I say, before I go on to the next person, that I have at least six people who still want to ask a question and we have a maximum of 23 minutes, so can people bear that mind?

Q I would like to bring Mr Howarth into the conversation. Going back to the purpose of the Bill and the need for the continuity agreements with those countries that are covered by EU deals, how practical is it, in your opinion, to transfer those agreements into bilateral trade deals?

Christopher Howarth: It is important, getting back to the Trade Bill, that it only gives a power for existing trade agreements. These trade agreements are already in force and companies already rely upon them. When we talk about impact assessments, the biggest impact assessment is that these agreements are already in force or have already gone through a scrutiny process and may come into force, such as CETA. Obviously, in leaving the European Union, we are moving to a different scrutiny system. Before, they could be decided by the Commission, the European Parliament by qualified majority voting or, in the cases of mixed agreements, you would have to get unanimity, occasionally from devolved Administrations as well. We are moving to a new system, but these agreements are already in force.

The relationship with the European Union (Withdrawal) Bill is that we are keeping retained legislation and we are keeping the EU standards, so if there are any amendments to these agreements, they have to be in line with the regulations—the food safety and environmental standards—that are being retained in UK law. The scope for actually changing things is quite narrow. These have been through a scrutiny process. They are in force. This Bill is necessary, in my opinion, so that the people who rely on these agreements can be sure that they will be transferred over in time.

Q And the practicalities?

Christopher Howarth: Trade agreements do traditionally take a very long time. In this case, they are already in force and we already have texts. Small amendments may need to be made around quotas—in some of the agreements we need to agree with the European Union and the counterparty how to split the quotas up—but the texts by and large have been agreed. In the future we may wish to come back to them to improve them or to fit them more to UK interests, but these agreements do exist. Trade agreements traditionally take a long time. I refer you to Parkinson’s law: that trade agreements tend to expand to the amount of time available to negotiate them. If you give trade negotiators 10 years to negotiate an agreement, it will probably take 10 years. In this case we have a fixed deadline, and I assume both sides will want to fit the negotiations and the necessary functions to that.

Q You made an important point. Clearly we need to ensure that the trade we have with many of these existing partner countries continues. That is an essential focus, which I think is uncontroversial around this room, but when you are talking about the amendments that might be made—as these treaties cease to be simply EU treaties that we are part of and become bilateral relationships with these countries, new treaties and distinct legal entities, as the addendums to the Bill have made clear—do you agree that it would be a fine opportunity for many of these countries to say that they want greater access to our markets in return for having this new agreement with us, or that they might take the opportunity to protect their market a little bit more? Might one of the reasons why the Bill puts in place a Henry VIII power be precisely because it envisages a scenario where such amendments might be made and where we might have to accommodate them, and the Minister then adopts that power in order to do so?

Christopher Howarth: I think it is true to say that the agreements the European Union made were fitted around European Union interests and that if the UK were starting from scratch, we may have had other interests. The EU interests would protect French farmers and the French audio-visual industry. You would get a price on the other side, say with Canadian agriculture. If the UK was doing it, we might do it differently. That is probably a discussion that would take longer and we would come back to later, and these agreements would probably stay exactly as they are. On the scrutiny side, we had a sort of mirror of this debate in the European Union (Withdrawal) Bill negotiation and discussions in Parliament. There may be some—

Q Sorry, I did not ask about the scrutiny. I asked about the Henry VIII power, because if, as you have just suggested, most of these things will simply be rolled over and there will not be changes, what is the point of the Henry VIII power? Why would the Government need that, unless they precisely envisaged that there would be changes that they required that power to accommodate?

Christopher Howarth: There may be some minor changes, potentially around the EU agreements and our relationship with the European Union. If there is an EU-agreed quota in an agreement with a third country—in terms of how we split that up, how we change that or the wording of the agreement—then there may be references that need changing in the agreements. There may be minor changes, but I imagine the substance of the agreements will stay pretty much as they are.

Q Why would a third-party country not take this opportunity? You took the issues of audio-visual in France, agriculture and so on. Why would a country not see this as an opportunity to get a better deal, as Nick Ashton-Hart has suggested they may well do?

Christopher Howarth: Indeed, it might be an opportunity for the UK to get a better deal, because if we are a more liberal economy and we have more to offer, we may be able to get better access.

Q Indeed, but we have the need for speed. We do not want to gum things up. We want this to be done as quickly as possible, but that may not happen. Knowing that we are between a rock and a hard place in terms of time, other countries might see a negotiating advantage and an opportunity to press their case. Is that not the case?

Christopher Howarth: Yes, but speed will probably be the overarching thing that dictates that they will remain as they are for the foreseeable future. We may come back to that at a later date.

Q To follow on from that question, the Bill contains a five-year sunset clause. How practical would it be to get substantial changes to existing arrangements in that timeframe?

Christopher Howarth: The timeframe that we are working on at the moment is that we will leave the European Union on 29 March 2019, so that will be two years, then three years after that. That is a substantial time in which to negotiate. The United States and Australia negotiated a full agreement in roughly two years. Some countries take longer, some less, but that would be a substantial amount of time to revisit and improve agreements.

Q May I also ask about the cost of not having those continuity agreements? What would be the impact on British business if we were not able to replicate the current deals, or something very close to them, at the point of leaving?

Christopher Howarth: The countries that the European Union has agreements with—South Korea, South Africa, Mexico—are major trading partners. Something that has not been mentioned so far is the plurilateral World Trade Organisation government procurement agreement, which gives British businesses access to over £1 trillion of Government contracts around the world. As a liberal country that tends to accept contracts from other countries, it is important that we get reciprocal rights for British businesses to other countries. Remaining part of that plurilateral agreement, which the Bill allows, would be important for British businesses when seeking Government contracts abroad.

Q I have a quick question for Mr Howarth and a longer question for Mr Ashton-Hart. Mr Howarth, you are a senior researcher at the House of Commons. Who exactly do you work for?

Christopher Howarth: I work for a group of mostly Conservative MPs.

Q Mr Ashton-Hart, can you tell us more about the Australian Parliament and Government and how they do trade? In your view, how effective is that?

Nick Ashton-Hart: I am not really an expert in how the Australian Government do their consultations, so I cannot describe them in detail. I can describe how the trade officials who I deal with view them. From my conversations with trade officials over the past six or seven years, most of them find the oversight process challenging. The Australians are no exception to that.

For example, in the discussions on the flow of data that have taken place at the WTO and in the trade in services agreement negotiation, of which Australia is a part and which the US and Australia created, a significant portion of all the issues that delayed all the services parts—all the digital elements—of TISA were related to the flow of data and to the Australian negotiators’ view of what they could get their oversight processes to consent to in relation to it. A comprehensive change to their data protection regulation came into force about four years ago, and its structure made it impossible to evaluate how it would work in a plurilateral context because of how it applied liability when private information was given to non-nationals. That meant that they were unable to make an offer or respond to other offers for a considerable period of time—about 18 months, I think—as a result of their oversight process at home. That was in relation to just one part of the plurilateral negotiation.

That example has held true. I have seen it happen with probably half a dozen countries on various issues over time. If there is a political problem in one area, it generally gums up everything else because it is often not convenient for you to say, “I have a problem in Parliament at home, so I cannot talk to you about x and y.” Instead, you would say, “We are still consulting on that.” Meanwhile, you will ask for something impossibly difficult, knowing that the other party will then get stuck. Once your problem goes away, you can withdraw the thing that is causing things to stick over here, because this is the political economy. You do not want to be negotiating on your weaknesses. You want to negotiate on someone else’s, so you have to create them if you have a negotiating bloc.

Q You have mentioned that a lot of the existing deals are premised on the fact that you have got 28 EU countries and, therefore, are negotiating for a majority and compromise. Why would UK Ministers choose to just accept these deals and not be tempted to try and use Henry VIII powers to manipulate the deals or negotiate further? Why would they accept it is already a compromise?

Christopher Howarth: It is probably a matter of practicalities. There are a number of these around the world and starting negotiations with all of them at the same time is probably impractical. That is not to say that these agreements were not based on EU interests; UK interests are slightly different. There are things we would have prioritised to gain access for British companies and there were some defensive interests that were not relevant to the UK. Taking an example: citrus fruit or things we do not produce in this country. There were things we would have done differently.

These are probably questions to come back to at a later date. At the moment, it is about trying to make sure these agreements still exist when we leave the European Union, so it is the practicalities of getting these agreements moved over into the UK’s name and out of the EU’s name, putting the UK’s signature on them.

Q You also mentioned quotas. How did quotas get allocated in the new deals? How does that come across without effectively leading to a renegotiation of a whole lot of deals, because so many countries have got vested interests in different quotas?

Christopher Howarth: If one of the European Union’s agreements has a quota in it, as the UK leaves, the counterparty might wish to continue to be able to export the same amount into the European Union and the UK. So it would be a three-way negotiation, which would involve splitting the quota up, with different countries taking different views as to what the fair way to do that would be.

Q So it would still be a negotiation; there is no straight carry-over of quotas.

Christopher Howarth: Yes, it would need splitting up. You either do it with the counterparty via the WTO and you would need to discuss it with the European Union as well.

Q This is more for Nick Ashton-Hart. You outlined that you really think Government should be doing impact assessments—assessing risks and opportunities. In terms of risks and opportunities, am I correct in thinking that the Government also need to look at how they are shaping their future domestic policy? We have heard that part of Brexit is that it is supposed to give opportunities to replace the common agricultural policy, but surely if you are looking at existing trade deals—taking them over, risks and opportunities—you need to look at a whole raft of other policies that are going to replace current EU-agreed, Europe-wide policies and procedures.

Nick Ashton-Hart: It depends very much on the nature of the deals in question and how recent they are. All the deals tend to be more focused on tariffs and the like, whereas it is somewhat simpler. Where it involves services, yes, even though these agreements are in force now, as was explained, you still have to accept that what France wanted from that deal when it was negotiated, what Germany wanted, what we wanted: these are not the same as what we and the other party want now. There are things such as protections for certain industries that we do not protect, but the other party will say, “Can we take that out?” and we might say, “Okay, but then we want this over here.”

Human nature is such that, if you are given a chance to negotiate on something and it is of serious monetary value, you are going to ask for a better deal than you got last time. If we buy cars, we do this. We don’t go and buy the car and say, “We will pay full price”—although some people might—or a house or the like. Countries do not do this. So you have to assume that normal human behaviour is not going to be thrown out of the window simply because we are in a hurry to transition our arrangements over to someone else. You have to assume that human nature will still apply and the other country is still going to behave as a rational negotiating partner, which is to seek their advantage from our need for speed.

The only way then to proceed is to say, “Okay, let’s look at these deals as they apply to us now and let’s consider: what is the other side likely to ask for? What is it in their interests to ask for and is it in our interests to agree to it, because it is expeditious, or because it is in our interests, or both?” You have to treat this as a negotiation, not as a replication.

Q Would we be negligent if we did not take this opportunity to try to improve the economic benefit that we get out of these deals?

Nick Ashton-Hart: I cannot imagine that the constituencies of this country would see it any other way. This is a substantial portion of our GDP; it is a substantial portion of our export and import. How can you say to people that you passed up an opportunity to make things better, when that was part of the premise under which we are doing this whole exercise in the first place? And our other counterparties certainly will not see our need for speed as anything other than an advantage to them, because it is. We are the ones in a hurry. Japan is 1.8% of our exports or something like that.

May I just say that I have at least two, and possibly three people who still want to catch my eye, and we have a maximum of four minutes left? So perhaps a short question and a short answer would help.

Q You mentioned Australia and that example sounds truly horrendous, in terms of gumming up. By the way, I think that in Australia trade deals are signed and agreed by the Cabinet, not by Parliament. Bearing in mind that you are talking about whether we are really in a negotiation starting from scratch or a replication with minor changes, 18% of the world’s data is currently hosted in the UK. There are businesses right across Europe that are completely reliant on all of that trade working the day after. So do you not think that because there will be business pressure on things actually running practically, that will ensure that this negotiation does not go back to the beginning, because the business pressure is that it continues as efficiently as it runs today?

Nick Ashton-Hart: If people are trading with us now under an arrangement, there is an incentive for them to see that it continues. I am not suggesting that that is not true. What I am suggesting is that it is an opportunity for the other parties to ask for things that they wanted last time and did not get, or that the passage of time of those agreements—age—means that it is appropriate to ask now. I am saying that everyone needs to bring home some benefit for something.

Q If that benefit has a cost of businesses not running, that will not be seen as a benefit in their own countries. That is what you are weighing up here, is it not? The status quo operating as efficiently as it does—

Nick Ashton-Hart: I am saying that I have never seen or heard of a Trade Ministry not asking for some improvement when any deal is being renegotiated, because that is how you are seen to be doing your job.

May I move on finally to Anna McMorrin, because she has been waiting patiently, for probably the last question?

Q May I ask Nick Ashton-Hart a question? In order to continue with the same access for our companies and the same conditions for supply chains, will not these deals need to be trilateral rather than bilateral, with an aspect of co-operating with the EU?

Nick Ashton-Hart: It depends on the nature of the agreement. If it is a situation where a quota has to be split, then yes. We see this in Geneva now, where the quotas at WTO level are being split up, or even our closest trading partners are arguing over whether one plus one equals one. In other areas, it is not necessarily the case. It really depends on the way the original agreement was made, and who else might benefit from a change to it through an MFN clause, or the like.

Q I was particularly thinking about rules of origin and diagonal cumulation.

Nick Ashton-Hart: Where there are rules that we are accepting from the EU, then of course we have less flexibility to make a change if it is asked for by the other side; that would conflict, of course.

Order. That brings us to the end of the time allocated for the Committee to ask questions. I thank witnesses for their evidence, and I thank Nick Dearden and Nick Ashton-Hart for their written evidence; I am sure that we are all grateful for it.

Examination of Witnesses

James Ashton-Bell, Chris Southworth, Tony Burke and Martin McTague gave evidence.

Q We will now hear oral evidence from James Ashton-Bell, head of trade and investment at the CBI; Chris Southworth, secretary-general of the International Chamber of Commerce UK; and Martin McTague, national policy chairman of the Federation of Small Businesses. We were also due to hear from Tony Burke, assistant general secretary of Unite the Union, but I understand that he has been caught up in an evacuation and will get here as soon as he can.

For this sitting, we have until 11.25 am. Would each of the witnesses please introduce themselves for the record?

James Ashton-Bell: I am James Ashton-Bell, head of international trade and investment at the Confederation of British Industry.

Chris Southworth: Chris Southworth, secretary-general of the International Chamber of Commerce here in the UK.

Martin McTague: I am Martin McTague, national policy director for the Federation of Small Businesses.

Q This is a question for Mr Southworth. Does the Bill as it currently stands have the support of businesses?

Chris Southworth: There are four key elements within the Bill that are broadly in the right direction of travel around setting up a trade remedies Bill, sharing data and so on, but there are missing elements—I think we agree with a much wider community of non-governmental organisations and unions—where we need a more inclusive approach to dealing with trade, more democratic oversight and more policy connectivity. We are speaking in a context of G20, where there is a very public commitment to developing a free trade model that works for everyone. That is missing in the current Trade Bill.

Q Mr Ashton-Bell?

James Ashton-Bell: I think we start from the place that the Bill does a lot of really important things for business, in terms of providing continuity. Continuity is absolutely key in all business leaders’ minds when it comes to our trade relationship with the EU, but also with third countries and the World Trade Organisation. The Bill goes a long way toward providing assurances with regard to the WTO on things like procurement, ensuring—as you have heard—that trade remedies are available and provisions for replication of free trade agreements that we currently enjoy through the EU.

I think business is looking for more in the longer term, and there is a broader question about whether or not this is the right vehicle to use to create the kinds of structure that they need around consultation. Any major trade country in the world has extensive and formalised ways of engaging with civil society to ensure that they get the maximum amount of input into trade policy that they need. The question of whether or not this is the right legislative vehicle to create such a structure and such a process is one that I will leave to Members, but business is looking for those kinds of structure, and if not now, when?

Q So you both agree that you would be looking for more consultation and more transparency. Is that fair?

James Ashton-Bell: Yes.

Q Mr McTague?

Martin McTague: Our clear priority is the transition process. It is vitally important that there is no cliff edge at this very early stage. Our members, and the small business community as a whole, see this as an enabling Bill, something that will help a smooth transition, so in principle we welcome it.

Q May I link to that and ask about your experience with other countries, where you may have visibility? How do they do this better and what should we be considering to include in the Bill?

Chris Southworth: There is a general recognition across the international community since the EU referendum—of course, that was followed by Trump and further issues across the G7—that the existing models for handling trade need to change. That is because there is a disconnect within society and over wider communities and regions, particularly in the lower-skilled areas, where they have not benefited from the growth of trade.

Everybody is looking for exemplars. Some countries have more structured set-ups, such as the US and New Zealand, where it is much less around the ad hoc consultation and engagement that we have in the UK. That is one key point to make. There are definitely lessons to learn from elsewhere, including the EU, I have to say. The propositions in the Trade Bill are a lesser option than what already exists within the EU. Although the EU itself can improve, there are elements of their structures that would work well for the UK, going forward. That is a key point to make.

May I interrupt to welcome Tony Burke, who is the assistant general secretary of Unite the Union? We are very grateful to you.

Tony Burke: Apologies for being delayed. St Pancras and King’s Cross tubes were closed. I have done some fleet footwork to get here.

Q Mr Ashton-Bell, would you like to comment?

James Ashton-Bell: I support everything that Chris has just said. For us, we look at the spectrum of different formal ways of engaging civil society. At one extreme you have the United States, which has an incredibly elaborate set of technical committees, numbering several hundred different members of civil society, to provide technical assistance to officials. At the other extreme there are less formalised systems for economies that tend to be a little bit less complex and tend to be significantly smaller than ourselves.

Business would come down somewhere along the lines of being closer to the US model than something less formalised for a less complicated economy that is also quite a bit smaller. Does that mean we need everything that the US model has? No, absolutely. We need a UK-specific bespoke model but it would probably be quite elaborate, to ensure that it takes in every business and wider civil society from across every region of the UK, across every size and shape of organisation and across all the different types of technical expertise, which crosses many different policy issues—everything from intellectual property to issues of data.

Q You see this as crucial to getting a good deal?

James Ashton-Bell: I struggle to understand how any Government, engaging in trade policy, be it at multilateral or bilateral level, would be able to get the best possible outcome for that negotiation unless they were using the full strength of their economy, pooling from the best minds that exist within and outside Government.

Q Mr McTague, do you have a view?

Martin McTague: It is difficult to draw parallels with any other country withdrawing from a 40-year relationship. The view that we have taken in the past is that consultation has worked well, inasmuch as the small business community, which we think is a vital part of the economy, has been listened to, and we would hope that that would happen in future. However, there is a temptation, because the bigger corporates sometimes have more access to Government, that small business does not really get listened to. This component, we think, is absolutely vital in the development of the policy.

Q Can I ask the witnesses about the Trade Remedies Authority? In your opinion, how effective do you think it could be, given that the Bill provides a framework? I appreciate there are lots of details to fill in later. How independent do you think that authority can be, given the way in which the Bill is currently drafted? I will start with FSB and work my way along.

Martin McTague: At the moment our view is that the early stages of development of TRA look encouraging, but we know they are a consultation. We know that they are looking at a variety of different options, and we are willing to wait for the consultation process before we get into a committed decision.

Chris Southworth: The principles are there in terms of setting up a trade role and it is as much to do with the speed around that. I would echo the same thoughts: there needs to be a lot more consultation around them and there needs to be clearer evidence of learning best practice from others. We are not the only country proposing a Trade Remedies Authority. I would start with the idea that having a trade remedies authority and the core concepts that exist in this Bill feel broadly right.

Q Do you feel that there is sufficient distance between the Secretary of State and the TRA?

Chris Southworth: Yes, I would have thought so. I do not think there should be any opposition to the idea that one may need to evolve in time. The UK has to re-learn how it does trade as an independent country, so we will not get it 100% right in the beginning. It should be able to evolve over time, and if there is a better way of doing it, then do it.

James Ashton-Bell: I take a slightly different view. As to what is in the Bill at present, our internal analysis of the Trade Remedies Authority is that there is a fundamental question, and we are looking for an answer to it: that question is about who makes the ultimate decisions about when to take action and when not to take action.

Having an independent organisation to advise on the data that exists—or does not exist, in many cases—is useful. The EU has found time and again that it does not have access to the kind of data information it needs to draw the kinds of concrete conclusions that it would like to draw. Given that scenario, it is useful to have an independent organisation to make those choices and to be clear about what information is and is not there.

When you have things like the economic interest test that is currently being floated as part of this authority, which in essence allows for the identification of particularly problematic trade behaviour from a third country and for it not to be actioned by the Government or authority, it means that there will be a decision at some point not to take action. If there is not enough information, then that in itself becomes a subjective decision about which parts of the economy are worth protecting using these particular tools, and it is argued that, if a subjective decision is going to be made, then it needs to most certainly be made by a Minister who is accountable for making those choices.

Tony Burke: Right from the get-go, the Manufacturing Trade Remedies Alliance, which consists of three trade unions and a number of trade associations including UK Steel, chemicals industries and ceramics among others, pressed strongly to get a trade remedies clause or a structure in there. We were able to put forward our proposals in advance of the discussions taking place at this level. One of the things that we would say from the trade union point of view is that it is absolutely essential that the TRA has a trade union voice—a worker’s voice—on it, particularly at non-executive level. We should also obviously be subject to International Labour Organisation conventions that protect workers in that remedies arrangement. We are supported by the employers on this. From our point of view, the situation in Unite is that we have many members in manufacturing who have suffered at the hands of dumping: steel, tyres, ceramic, chemicals and pharma. It is a big concern for us. We would see that we need a remedies authority that is transparent, and that has trade union and employer representation. At the end of the day, Parliament has to have consent over any decisions made.

Q You are happy that the authority is sufficiently independent at this point?

Tony Burke: As it stands, but we do not see the transparency that we would like to see, and we also have a view about what appears to be an ability for the Minister to appoint people. We believe that working people and companies should have an opportunity to have a say, and also for trade unions to bring a case. This is important. We have learned from America. We have worked closely with the steelworkers’ union in the United States. They as a trade union in America do bring cases to protect their members in steel, rubber, paper making and industries like that.

Q Mr Ashton-Bell, can I pick up on something you said because I noticed that you were nodding when Mr Burke was saying that. You said you struggled to understand how we could get the best deal without engaging every part of society in the debate. You also posed the question of who makes the fundamental decision. Do you therefore agree with Mr Burke that it would be helpful to have, in the nine places available on the TRA, statutory representatives perhaps of small business, the trade unions and producers? At the moment, the Bill has it as a blank sheet for those nine spaces, and nobody is really quite clear who might be appointed. Perhaps you could all comment on that, starting with Mr Ashton-Bell.

James Ashton-Bell: My organisation does not have a defined position on that blank sheet of paper you have just described, but to follow your rationale, and consistent with what I have said so far, bigger organisations do not have a monopoly on understanding how trade impacts the economy. In anything where you are making choices about trade and how it will impact the wider economy, you should have a wide and balanced group of people advising Government, or an independent authority, about how to make those choices. That means, indeed, that small business are very much equal to big business, and workers also, because workers are just as impacted as the businesses themselves.

Chris Southworth: I just want to clarify my point. It is exactly the same: the representation is a critical point. An independent body, yes, but there must be representation within that independent body to represent all the important voices, which includes all those here, but I would also include NGOs and civil society, who have equal interest in the implications of trade. They must be at the table and that has to be in everyone’s interest, including business—big, small and medium.

Martin McTague: Barry, it will not come as a massive surprise to you that, yes, I do agree that small business should be a serious voice on this. It is nice to know that James supports me. That is a welcome change. [Interruption.] It is something that we have clearly got unanimity on.

Q Speaking about the representation on the Trade Remedies Authority, there have been suggestions that Parliament should have a greater role on this board. What impact would that and other stakeholders have on the impartiality, accountability and timeliness of decisions? Could the panel tell us what they feel about having various nominations to non-executive membership? What impact would that also have on the independence and impartiality of the Trade Remedies Authority?

Chris Southworth: Ultimately, it is about having a rounded decision made by an independent body. That political oversight is critical—James is completely right. Ultimately, it is going to come down to a political decision whether a decision is made one way or the other. If you operate in an organisation like the World Trade Organisation, then all these voices come into play. It is incredibly important that the decisions prior to any engagement in a global environment are made in a good way that is inclusive. The role of Parliament is critical in that too.

Q You don’t think that that would slow things down?

Chris Southworth: Trade is slow, it is technical, and it is difficult. It involves implications for people’s lives and for businesses of all shapes and sizes in every region. There isn’t a component of public or professional life that is not impacted by trade. It is important that everyone has their say, so that when the negotiations begin, the negotiators and all the stakeholders are confident on what those positions are. It is equally important that, during the negotiation when important points come up that are difficult and tricky, which they always are at that stage, there is also an opportunity to come back and say, “What do you think? Do you agree with this, because we are going to have to make a compromise?” That could mean an implication for Welsh farmers, businesses in the midlands, or local communities in Sheffield. It could mean all of those things.

Q I am asking because I have had messages, particularly from farmers in my constituency, about remedies being very slow to be enacted. That is a real issue, so I would be looking for a very efficient remedies authority. I hear what you are saying, but I can also see a situation where the conversation goes on and on and no remedy comes forth. Justice delayed is justice denied.

Chris Southworth: Again, you need to come down with a political decision at some stage on whether or not it is right in terms of timing. The key point is: has there been proper consultation beforehand and has every stakeholder had the chance to voice their views in a proper structured format, not throughout the consultations, but in a proper structured way? That is the important point. Ultimately, there is always a sensibility around trade remedies, particularly if you are talking about things such as steel dumping. That has huge implications for a lot of people, particularly in geographies that tend to be vulnerable, so there is a difficult decision to be made. It is important that everyone has a chance to have their say about what that decision should be.