Delegated Legislation Committee
Draft European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Turkmenistan) Order 2017 Draft European Union (Definition of Treaties) (Enhanced Partnership and Cooperation Agreement) (Kazakhstan) Order 2017 Draft European Union (Definition of Treaties) (Comprehensive and Enhanced Partnership Agreement) (Armenia) Order 2018
The Committee consisted of the following Members:
Chair: Dame Cheryl Gillan
Ali, Rushanara (Bethnal Green and Bow) (Lab)
† Allan, Lucy (Telford) (Con)
† Bacon, Mr Richard (South Norfolk) (Con)
† Bardell, Hannah (Livingston) (SNP)
† Bradley, Ben (Mansfield) (Con)
† Clarke, Mr Simon (Middlesbrough South and East Cleveland) (Con)
† Courts, Robert (Witney) (Con)
Davies, Geraint (Swansea West) (Lab/Co-op)
† Duncan, Sir Alan (Minister for Europe and the Americas)
† Freer, Mike (Finchley and Golders Green) (Con)
Graham, Richard (Gloucester) (Con)
Hodge, Dame Margaret (Barking) (Lab)
Lammy, Mr David (Tottenham) (Lab)
† Mahmood, Mr Khalid (Birmingham, Perry Barr) (Lab)
Rowley, Danielle (Midlothian) (Lab)
† Smith, Nick (Blaenau Gwent) (Lab)
† Thomas, Derek (St Ives) (Con)
Leoni Kurt, Committee Clerk
† attended the Committee
The following also attended, pursuant to Standing Order No. 118(2):
Pound, Stephen (Ealing North) (Lab)
Fourth Delegated Legislation Committee
Wednesday 11 July 2018
[Dame Cheryl Gillan in the Chair]
Draft European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Turkmenistan) Order 2017
As it is quite warm, I am happy for hon. Gentlemen to remove their jackets if they wish. I will call the Minister to move the first motion and to speak to all the draft instruments before us. At the end of the debate, I will put the Question on the first motion and then ask the Minister to move the remaining motions formally.
I beg to move,
That the Committee has considered the draft European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Turkmenistan) Order 2017.
With this it will be convenient to consider the draft European Union (Definition of Treaties) (Enhanced Partnership and Cooperation Agreement) (Kazakhstan) Order 2017 and the draft European Union (Definition of Treaties) (Comprehensive and Enhanced Partnership Agreement) (Armenia) Order 2018.
It is a great pleasure to serve under your chairmanship, Dame Cheryl. The international agreements under consideration have all been negotiated between the European Union and its member states on the one hand, and third countries on the other. Each agreement provides an enhanced framework for regular political dialogue at ministerial, official and expert level.
The EU-Turkmenistan partnership and co-operation agreement will support reforms and help to build Turkmenistan’s economy in line with market principles. The agreement provides for EU technical assistance to reinforce democratic institutions, as well as encouraging economic reforms and strengthening protections for European investors in Turkmenistan. The EU-Kazakhstan enhanced partnership and co-operation agreement updates and augments the existing partnership and co-operation agreement agreed in 1996. It will contribute to modernising the commercial environment in Kazakhstan and increase the ease of doing business for UK and European firms. The EU-Armenia comprehensive and enhanced partnership agreement provides a foundation for enhanced political and economic co-operation, and will also support reform of the commercial environment in Armenia.
The agreements are an important tool for promoting British and European values and standards. Some have been under negotiation for a number of years, meaning that successive UK Governments have been involved in shaping the EU’s approach to the negotiations. The EU has numerous similar such agreements with other third countries around the world, all of which have passed through this ratification process in the House. Although this is an unusual time in our relations with the EU, this is a case of business as usual continuing in the UK’s and the EU’s interest.
Approval of the draft orders is a necessary step towards the UK’s ratification of these agreements, through designating them as EU treaties under section 1(3) of the European Communities Act 1972. The third countries concerned have all chosen to pursue closer ties with the European Union and its member states, which the Government welcome. We believe that, by bringing countries closer to the orbit of European values and standards, these agreements are firmly in our national interests.
The provisions of each agreement covered by the draft orders are not identical. They are the result of years of negotiation and reflect the differing priorities that we share with each partner country and the varying depth and maturity of the relationship that the EU and its member states already enjoy with them. For example, EU third country agreements with emerging democracies include a significant focus on supporting reforms and democratic institutions, whereas agreements with long-term partners focus to a greater extent on international co-operation to address broader global challenges.
I am conscious that right hon. and hon. Members may have questions about the impact of our departure from the EU on the status of these agreements and our ratification of them. If I may, Dame Cheryl, I will briefly clarify the process. As Members will be aware, until we leave the EU on 29 March next year, the UK remains a full member state, and all the rights and obligations of EU membership remain in force. During this period, the Government will continue to negotiate, implement and apply EU legislation. I am advised that the agreements before us are unlikely to enter into force before the UK leaves the EU.
After our departure in March 2019, we will no longer be able to ratify EU third-country agreements. However, the withdrawal agreement includes provision that during the implementation period, the UK will be treated as if it were an EU member state for the purposes of international agreements, with the effect that the UK will be bound by agreements that enter into force during the implementation period. If any of these agreements were to enter into force during the implementation period following UK ratification, the UK would not need to adopt further domestic legislation to ensure that it could apply and be bound by the agreement, in compliance with the terms of the withdrawal agreement.
Nevertheless, the impact of our departure from the EU is not the central issue for us today. I urge hon. Members to focus on why implementation of these agreements is firmly in our national interest. First, the agreements formalise positive relationships that the EU has developed with third countries around the world. They are designed to strengthen democratic values, the rule of law and environmental protections, and make trade and investment more predictable for businesses, including those in our own country. It is therefore in the interests of the UK, as a leading advocate of democratic values and a rules-based international system, to support the passage of the agreements.
Secondly, it is important, including for our departure negotiations, to deliver on my right hon. Friend the Prime Minister’s commitment to continue to be a supportive EU member state until we leave. Ensuring that the UK does not block, delay or disrupt EU “business as usual” is crucial to that commitment. Thirdly, as an EU member state, the UK has been a key driver of all the agreements. At a time when we are strengthening ties with countries around the world, it would be wholly counterproductive to be seen in any way to be hindering the aspirations of those countries to have closer relations with the EU.
With that, I hope, adequate explanation, I trust that the Committee will see fit to endorse the merits of the three orders.
The debate can last for up to one and a half hours, and it gives me great pleasure to call Mr Khalid Mahmood.
It is a pleasure to serve under your stewardship, Dame Cheryl. The Minister has rightly pointed out that these are EU agreements that will continue to bind us. Perhaps they would not be in position after Brexit; we will have to continue the relationship after that. He mentioned the three countries concerned; I would like to focus on Turkmenistan and Kazakhstan. He talked about strengthening democracy, and it is important to look at the support that we can give those countries in that respect. He also mentioned the rule of law, which is also important. The agreements must be binding on those two issues.
There are issues in relation to corruption in some of these places. To make the agreements binding, it is important that we continue to have close ties with those Governments and support them through the relevant structures, to enable better fiscal control and scrutiny of those in power.
There is very little disagreement with what the Minister alluded to in his statement. He also spoke about Armenia, with which we share a huge heritage of close ties. We want to continue those and the work that has progressed in our relationship with Armenia.
It is important that we continue to build these relationships and continue to build trade. Even more importantly, we must continue to build the definition of those democratic structures that we hold dear and support these countries to be able to do that.
One way to enhance all three treaty countries’ ability to move forward is through trade, but that comes by working together and allowing them to update their democratic structures. Those things must go hand in glove. That is the crux of the matter. These statutory instruments are not hugely contentious, and I thank the Minister for his comments.
It is an honour and a pleasure, as ever, to sit beneath your benevolent aegis, Dame Cheryl. May I apologise that although I notified the Government and Opposition Whips of my attention to speak, I neglected to notify you directly? I abase myself. I would do anything for you to allow me to speak.
Mr Pound, let me reassure you that it would be a pleasure to hear your words of wisdom on this order.
I wish to speak to the Armenian issue—I mean no disrespect to the other two nations—because the situation in Armenia is intensely and immensely important. My hon. Friend the Member for Birmingham, Perry Barr has referred to the long-standing emotional, business, social and cultural ties that we enjoy with Armenia. I would invite all hon. Members present, and anyone who is listening, to pop along to north Acton playing fields this Sunday afternoon, where the famous Armenian street festival will take place under the benevolent look of Bishop Manukyan. They would be very welcome, although I should warn everyone that there may be a speech from one of the local MPs at about half-past 12, so they may wish to avoid that particular time slot.
The date of 21 June 2018 will become very important in Armenian history, because that was the date of the first meeting of the partnership council under the EU-Armenia comprehensive and enhanced partnership agreement. A slight shadow overhangs my words, because as this nation foolishly appears to be turning its back on all that is great and good in Europe, Armenia, a sensible, modern, forward-looking economy, is moving towards it in the fields of good governance, a business-friendly economy, air transport and cultural exchange.
It is very significant that at that first meeting, Armenia and the European Union discussed many issues that show that Armenia is moving forward in those areas. Credit was also given to the democratic leadership in Armenia for the recent transition under the new constitution. Some people felt that they may not have been a success, but in fact it was a peaceful transition to an entirely new constitution. Armenia and the Armenians should be given credit for that achievement.
At risk of being too oleaginous, the Minister is a man of great reputation in the region and beyond. His personal commitment to Armenia and many of the surrounding countries has been noted, with an element of envy on my part, because wherever I go, he has been there before me, and whatever I do, he does far better, in many different languages. I pay tribute to him.
The hope of the first partnership agreement being ratified by us is being made flesh today. We can appreciate and work with many aspects of that agreement between Armenia and the EU, particularly with regards to visa liberalisation and creating a business-friendly environment. The European Union also committed €3 million under the Madad fund for the settlement of Syrian refugees in Armenia. Armenia has shown many of us the way forward in that area by welcoming people, particularly from Aleppo.
On 7 July, Simon McDonald, our permanent under-secretary, visited Yerevan to meet Foreign Minister Zohrab Mnatsakanian. Simon McDonald represents the finest tradition of the British diplomatic service. They had a very positive preliminary meeting in anticipation and advance of this Committee’s debate on ratification. It was an opportunity for a senior diplomat in the United Kingdom to gain first-hand knowledge on the ground in Armenia. I pay tribute to Simon McDonald for his work in that area. He was extremely well received. The Foreign Minister Zohrab Mnatsakanian, who is probably one of the busiest diplomats on the world stage, particularly enjoyed that meeting. It has been made known to us through the embassy how positive and productive that meeting was.
I hope that by ratifying the order we can enter a new phase of UK-Armenian relations, as I think we should. We have so many friends in Armenia, and there is much for us to gain from a closer association with that great country—not just the first Christian country on earth, but a country of emerging importance, particularly in the fields of IT and new technology. It is country whose time has come. I am glad that the United Kingdom is working closely with it. I am sad that Europe is leading that connection, but above all, as long as Armenia can look to its friends in Brussels and in London, I will be happy.
Thank you, Dame Cheryl, for your indulgence. I particularly thank the Minister for his greatly appreciated work, not just in the south Caucasus but beyond.
I warmly thank both Opposition Members, the hon. Member for Birmingham, Perry Barr and, in particular, the hon. Member for Ealing North (Stephen Pound) for the comments he has just made.
I have great affection for all three countries. I have visited them all, be it as a Minister in the Department for International Development or as the Foreign Minister. Relations between the UK and all of them are growing by the day, entirely in a good way. I fully take on board the comments from the Opposition Front Bench about the importance of encouraging democratic progress, bearing down on any corruption that may be in those societies, and enhancing trade. Those objectives are very much at the heart of the orders we are scrutinising.
Turning to Armenia in particular, there is a very close link, and genuine friendship on many layers, between the UK and Armenia. President Sarkissian has acquitted himself in a very special way over the last few months in finishing as ambassador here, becoming President, and then immediately having to handle serious demonstrations, which have, as the hon. Member for Ealing North said, seen a transfer of power in probably the best way anyone could have imagined. It is a great credit to the country, and the effectiveness of its constitution, that Prime Minister Pashinyan assumed authority and power as Prime Minister without any kind of violence on the streets or political upset. A lot of that is down to the very authoritative leadership of President Armen Sarkissian. The transfer of power was ceded, and then, as the hon. Gentleman said, the very effective visit of our permanent under-secretary of the Foreign Office, Sir Simon McDonald, to Yerevan cemented that in an effective and helpful way.
The agreements will support our values and objectives long after we have left the European Union. By ratifying them we are demonstrating our goodwill as a supportive partner to the European Union and to each of the three countries that are seeking to expand their relationships with the EU and with the UK directly. The agreements are fully consistent with our prospects outside the European Union. We are enhancing our co-operation with partners across central Asia and the south Caucasus as we leave the EU, all of which is in line with our ambitious vision for a global Britain following our departure.
Thank you, once again, Dame Cheryl, for chairing proceedings. I commend the draft orders to the Committee.
Question put and agreed to.
DRAFT EUROPEAN UNION (DEFINITION OF TREATIES) (ENHANCED PARTNERSHIP AND COOPERATION AGREEMENT) (KAZAKHSTAN) ORDER 2017
That the Committee has considered the draft European Union (Definition of Treaties) (Enhanced Partnership and Cooperation Agreement) (Kazakhstan) Order 2017.—(Sir Alan Duncan.)
DRAFT EUROPEAN UNION (DEFINITION OF TREATIES) (COMPREHENSIVE AND ENHANCED PARTNERSHIP AGREEMENT) (ARMENIA) ORDER 2018
That the Committee has considered the draft European Union (Definition of Treaties) (Comprehensive and Enhanced Partnership Agreement) (Armenia) Order 2017.—(Sir Alan Duncan.)
Draft Contracts for Difference (Miscellaneous Amendments) Regulations 2018
The Committee consisted of the following Members:
Chair: Sir David Amess
† Antoniazzi, Tonia (Gower) (Lab)
† Badenoch, Mrs Kemi (Saffron Walden) (Con)
† Berger, Luciana (Liverpool, Wavertree) (Lab/Co-op)
† Brown, Alan (Kilmarnock and Loudoun) (SNP)
† Charalambous, Bambos (Enfield, Southgate) (Lab)
† Docherty, Leo (Aldershot) (Con)
† Duguid, David (Banff and Buchan) (Con)
† Griffiths, Andrew (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)
† Harris, Rebecca (Lord Commissioner of Her Majesty's Treasury)
Kinnock, Stephen (Aberavon) (Lab)
† Lopresti, Jack (Filton and Bradley Stoke) (Con)
† Reeves, Ellie (Lewisham West and Penge) (Lab)
† Robinson, Mary (Cheadle) (Con)
† Seely, Mr Bob (Isle of Wight) (Con)
† Smith, Nick (Blaenau Gwent) (Lab)
† Spelman, Dame Caroline (Second Church Estates Commissioner)
† Whitehead, Dr Alan (Southampton, Test) (Lab)
Mike Everett, Committee Clerk
† attended the Committee
Fifth Delegated Legislation Committee
Wednesday 11 July 2018
[Sir David Amess in the Chair]
Draft Contracts for Difference (Miscellaneous Amendments) Regulations 2018
I beg to move,
That the Committee has considered the draft Contracts for Difference (Miscellaneous Amendments) Regulations 2018.
The draft instrument makes three separate changes to the existing contracts for difference regulations. First, it amends the Contracts for Difference (Allocation) Regulations 2014 to establish remote island wind projects as a category of technology that is eligible to take part in the CfD scheme and compete alongside other less established technologies. In doing so, it delivers on a manifesto and clean growth strategy commitment.
Secondly, the regulations remove from the Contracts for Difference (Definition of Eligible Generator) Regulations 2014 the requirement for certain generators to intend to accredit their project under the combined heat and power quality assurance standard. That minor amendment will facilitate the delivery of future CfD allocation rounds and is not otherwise expected to impact on the operation of the CfD scheme.
Thirdly, the regulations update the definition of “waste” in the definition of eligible generator regulations. That ensures that generators are not incentivised to intentionally modify or contaminate biofuels in order to avoid the application of sustainability criteria that would otherwise apply.
We are proposing the legislative changes following a 12-week public consultation earlier this year, during which they received broad support. The CfD scheme is designed to offer long-term price stabilisation to new low-carbon generators, allowing investment to come forward at a lower cost of capital and, therefore, at a lower cost to consumers—something I think we would all welcome.
The scheme typically sees support contracts awarded in a competitive auction process, which ensures that costs to consumers are kept to a minimum. The technologies that are eligible to take part in the CfD scheme are categorised in two distinct groups or pots, as they are known. Pot 1 contains the more mature technologies, such as solar PV, which typically require less support, whereas pot 2 contains the less mature technologies, such as offshore wind, which typically require more support.
The scheme has been successful in bringing forward significant new investment in large-scale renewable generation. The two previous CfD auctions should deliver more than 5 GW of renewable electricity capacity by the early 2020s, helping us to meet our decarbonisation targets. We plan to open the next one in spring next year and are laying the regulations today to give certainty to businesses in advance of that.
I will briefly describe each of the three amendments in turn. The first amendment will make remote island wind projects eligible for pot 2 auctions. The Government confirmed in the clean growth strategy our intention that wind projects on remote islands that are expected directly to benefit local communities would be eligible for the next pot 2 auction.
Those projects have certain unique characteristics that set them apart from wind projects elsewhere in the UK, including higher costs. It is, therefore, appropriate for remote island wind projects to be recognised as a distinct technology within the CfD scheme; one that is subject to its own administrative strike price—a maximum price—and eligible to take part in pot 2 auctions, alongside other less established technologies.
The regulations set out the criteria that projects must satisfy to constitute a remote island wind project for the purposes of the CfD scheme. Those criteria have been carefully selected to ensure that remote island wind projects are sufficiently remote to be subject to more challenging operating conditions, as well as to increased network-related costs.
Allowing remote island projects to compete alongside other less established technologies in pot 2 would allow developers to build on the falling cost of onshore wind and provide a further boost to the supply chain. More than 750 MW of wind projects in the Western Isles, Orkney and Shetland could be eligible for the next auction. If successful, they could deliver long-term benefits to the UK.
I welcome those opportunities for the Scottish highlands. Will the Minister give us the timescale for when the next pot 2 auction will open?
Indeed, I will come to that in the course of my speech.
The second amendment will remove the requirement for certain generators to intend to accredit their projects under the combined heat and power quality assurance standard. The CfD scheme currently supports only two types of projects—dedicated biomass and energy from waste—if they are built with combined heat and power. The Contracts for Difference (Definition of Eligible Generator) Regulations 2014 require developers of such projects who want to be eligible to apply for CfDs to intend to accredit their projects under issue 6 of the combined heat and power quality assurance standard, usually referred to as the CHPQA. I have tried to eradicate TLAs—three-letter abbreviations—within the Department, Sir David, but they do creep into the speech. I am sure you will understand.
The Department recently launched and responded to a consultation on options to replace issue 6 of the CHPQA standard. The incoming replacement will include increased efficiency reference values against which future CfD-supported CHP projects will be assessed. The regulations will remove the requirement to intend to accredit from the legislation. Developers will still have to accredit their projects under the CHPQA standard to receive CfD support, but that will instead be specified in the contract terms with which developers have to agree and comply to receive CfD support.
The amendment will not have a practical impact on the CfD scheme’s operation, because in practice a developer’s intention to comply with the CHPQA’s requirements is not capable of being meaningfully tested at this stage in the CfD application process, long before a plant is built.
The hon. Member for Kilmarnock and Loudoun asked for the timescale for the next pot 2 allocation, which is of particular interest to him and his colleagues north of the border. We have put on record, and I am happy to confirm, that the next pot 2 auction will be held in spring 2019. That gives the industry enough time to be aware of the auction, put schemes together and make sufficient proposals. It also shows an urgency to support those remote islands with cheap renewable energy.
The third and final amendment concerns a minor change to the definition of the term “waste” in the Contracts for Difference (Definition of Eligible Generator) Regulations 2014. It is relevant only to technologies that may use waste as a fuel to generate electricity. The amendment simply makes it clear that substances that are deliberately modified or contaminated to try to bring them within the definition of waste will not constitute waste. That prevents the gaming of the system and will ensure that we do not inadvertently encourage generators to modify or contaminate biofuels to avoid the application of sustainability criteria that would otherwise apply.
The legislative changes in the regulations need to be made ahead of the next CfD allocation round, which is planned for spring 2019, so that developers have certainty as to who will be eligible to take part and on what basis. Subject to the will of Parliament, the regulations will come into force on the day after they are made. I commend them to the Committee.
It is a pleasure to serve under your chairmanship, Sir David.
As the Minister has set out, a number of amendments—some small, some large—have been gathered together under the heading Contracts for Difference (Miscellaneous Amendments) Regulations 2018. We have therefore already booked that title for this year, and should other portmanteau proposals come forward, presumably we will have to think of a different title for a future statutory instrument.
The miscellaneous amendments have different weights attached to them, and perhaps I can make progress if I apply very little weight to the two amendments that concern CHP plants and waste. To some extent we have discussed those amendments before, and they relate—among other things—to a desire to ensure that only the most efficient CHP plants obtain CfD arrangements, while at the same time enabling those CHP plants to distinguish between what they do for heat and what they do for power. Previously that balance was not quite right, and the amendments make a positive change in that direction. The amendment on waste makes a positive change by ensuring that what is done regarding sustainability criteria for fuel is properly carried out. Those amendments have two big ticks in the miscellaneous box and we need pay them no further attention, important though they are to the lives of future CHP plants.
The third amendment is a little less miscellaneous, and we need to understand what it seeks to do. The amendment would bring onshore wind back into place in the United Kingdom, and I suspect that that is the subject of rather more internal discussion on the Government Benches than on the Opposition Benches. Labour Members would love onshore wind to come back across the United Kingdom, as long as any concerns are addressed, there is community agreement to the onshore plants, proper planning arrangements are undertaken and proper value for money is obtained. We know, I think, that moves are afoot by the Government, and those who would take substantially the same position, to move such arrangements forward. As far as I can see, on this occasion it was decided to bring back some onshore wind where it was felt that such schemes were already in the pipeline. As the Minister said, a number of schemes could proceed rapidly and fruitfully, and if those schemes could be unleashed, we could have onshore wind in those areas.
The problem is that if we are trying to do that without actually bringing onshore wind back as such, we need a device to do it. The device used here is to say that those places where onshore wind might come back must be defined as a remote island. The problem that then arises is what constitutes a remote island. If a remote island is defined in a careless way, we might find that onshore wind is brought back in places where it was not intended.
Secondly, since onshore wind has for a long time been approved under state aid arrangements by the EU, bringing it back by creating a different category called remote island wind means that state aid clearance must, effectively, be applied for all over again. It would not be possible to apply specifically for onshore wind to come back on stream only on certain islands; that would certainly not get state aid approval, because area-specific arrangements cannot be declared for state aid clearance. It would be necessary to say that in principle it could be anywhere, and then define things to narrow it down to the desired result. In this instance, that result would be the Hebrides, the Shetlands and the Orkneys.
Things then get a little amusing, because on looking at the definition of what a remote offshore island is, we can see the wheels going round. It starts by saying, “It has to be an island.” Well, the hon. Member for Isle of Wight is in his place this afternoon; it might include the Isle of Wight. However, the Isle of Wight is of course in England, and the present policy arrangements probably would not include suddenly covering the Isle of Wight with wind farm applications.
The hon. Gentleman is kind to mention the Isle of Wight, but I hope he is not implying that we are remote.
The hon. Gentleman strikes the nail on the head, because the regulations progressively exclude the Isle of Wight from the definition. The first criterion is that the remote island needs to be connected by a cable to the mainland, but not by any old cable. It must be a 50 km cable to a main joining point for the national grid or the distributing grid and, furthermore, 20 km of that cable has to be under the sea. There is not a 20 km undersea cable between the Isle of Wight and where the interconnector to the Isle of Wight lands, near my constituency in Southampton. So that is the Isle of Wight out of the question.
The second criterion is that the remote island has to be 10 km away, along all of its coastline, from the mainland. That also eliminates the Isle of Wight, as well as Anglesey and a number of other places. So that is sorted out.
Gradually, by a process of elimination, the point that the Government wanted to get to is reached: the only qualifying islands happen to be the Hebrides, the Shetlands and the Orkneys. There we have remote island wind by definition, without saying what a remote island is. Well done to the Government for getting to that position—the introduction of onshore wind without actually introducing onshore wind. It is quite clever.
In order to make a separate category, however, it is necessary to compare the situation with what would be the case for onshore wind, which already has state aid, and differentiate the two. Indeed, the impact assessment does just that. In an interesting passage, it states:
“The Government considers that the higher costs faced by RIW projects mean that at present they would find it difficult to effectively compete with the more established technologies in Pot 1, including ‘mainland’ onshore wind projects”,
none of which exist, of course, because they are banned. An impact assessment has been carried out comparing remote island wind with onshore wind, when there is nothing to compare with at the moment because there is none, in order to justify a marginally higher administrative CfD than would be the case were it simply to be defined as a variant of onshore wind in general.
Consequently, what we have here is onshore wind coming back potentially at a higher cost than would have been the case had onshore wind come back with the variation, with the overall state aid approval being as it was for onshore wind as a whole. This move, smart though it is, is not without potential cost. I hope the CfDs that come forward under pot 2 will be very competitive; I am sure they will be, because onshore wind has come down to such an extent that there may even be a net nil cost for the administrative CfDs that will be put forward. We hope that that will be the case but, in principle, a mechanism has been put in place, because of this particular convoluted definition, to implant a little more expense in the process than would otherwise be the case.
The other thing I ought to mention in passing is that, smart though this mechanism is, it is not entirely perfect in terms of English onshore wind. Onshore wind is banned across England—I think we agree that that is the case—except, now, for one place, which is the Isles of Scilly. They have an undersea cable of more than 50 km—in fact, they have a cable of 55 km to the agreed connection—more than 20 km of which is under the sea, and they are 23 miles off the coast of Cornwall. We will have inadvertently restored onshore wind to England this afternoon. Admittedly, I should not be taken as advocating in any shape or form the placing of wind farms on the Isles of Scilly, but that is what we appear in principle to be doing.
As the Minister can gather, I am one-third delighted by this move, one-third amused by the hoops and reverse somersaults that we have had to go through in order to achieve it, and one-third concerned that the much easier process—to bring onshore wind back in one way or another, with proper constraints, planning arrangements and care—has not been undertaken.
In that context, I ask the Minister one question on the whole process. I do not expect him to stand up and agree with my analysis of exactly why this has been done, but it is the case that state aid approval was applied for, I think, for this particular subset definition. I think it is also the case that the European Commission has informally told the UK that it would not object to this being put in as a sub-definition. I am not clear whether anything formal has yet come from the EU to the UK saying, “Not only will we not object, but we will stamp this as far as state aid approval is concerned.” I would be grateful if the Minister confirmed whether that is the case.
After all that, we will not seek to divide the Committee this afternoon. I merely place on the record the recommendation that the next step, should there be a further statutory instrument containing miscellaneous amendments, should be to bring onshore wind back properly, with proper community protections, to ensure that we get the benefits and savings from onshore wind that many of us in this Chamber want to see and find that we are prevented from enjoying.
It is a pleasure to serve under your chairmanship, Sir David. We certainly welcome the changes, particularly to remote island wind, which the Scottish National party has been calling for for a while. I am pleased that the Government have listened and are taking action on that. If I were churlish, I would say that it is not before time, but anyone who knows me knows that I am not churlish, so I will not complain about the timeframe.
The Minister explained how the evolution of technologies has brought down the costs of capital, and I completely agree. It has been great to see the cost of onshore and offshore wind decrease dramatically, but we have to look at that in the context of Government policies on nuclear and its astronomical costs. In a Westminster Hall debate this morning, I highlighted that we are stuck with £120 billion of decommissioning costs, of which £91 billion are at Sellafield. We have got the Hinkley Point C project, which has a strike price of £92.50 per megawatt-hour for 35 years. That compares with a strike price of £57.50 for a 15-year CfD at the last offshore auction. It is clear that renewables are much more cost-effective and are completely green, rather than just reducing carbon, as nuclear does.
The hon. Member for Southampton, Test certainly worked his way around his assessment of the remote island wind definition. I am not too fussed about that, so long as the Scottish highlands get a bite of the cherry. That is all I care about, and I look forward to that. I certainly do not have any concerns about state aid. If Hinkley can pass EU state aid rules, I am sure the islands can. In the long run, it would be good to see Government assistance on and investment in additional interconnector cables between the remote islands and the mainland, because that would free up additional opportunities and help support the mainland national grid.
I have one question for the Minister. At Scottish questions this morning, I asked about onshore wind in Scotland being able to bid in future auctions. The response I got was that there would be an announcement soon. Can he provide some clarity? I welcome the changes and look forward to the remote islands benefiting.
I often think that when all sides of the House agree on something it is time to be concerned, but in this particular case I think not. All sides of the House agree on the importance of renewable energy, the importance of the Government investing in its provision and the importance of providing people, particularly those on remote islands, with access to cheap renewable energy. We come together in this Committee to support the Government’s intention to deliver that.
I am grateful to the hon. Member for Southampton, Test, who has yet again demonstrated his vast knowledge and experience. There are few in this House who have paid more attention, done more study or are as informed as him. I am grateful to him for the points he raised. He paints a picture of some elaborate ruse being the reason for bringing forward the SI today. If he can concoct conspiracy theories in that way, I would be interested in his views on who shot JFK, whether Elvis is still alive and whether there is a world war two bomber on the moon. Those are the kinds of conspiracy theories we need to address. I reassure him that the Government’s intention with this SI is to introduce practical remedies to ensure the provision of renewable energies to remote islands across the country.
I assure the Minister that if there is any conspiracy in this, as I sought to set out in my remarks, it is the most benign of conspiracies. If it is one, it is one that we can support in a conspiratorial way.
I thank the hon. Gentleman not only for his comments, but for his wholehearted support for these measures.
He raised some important questions. He asked whether we will need state aid approval for remote islands. I am the Minister responsible for competition policy in the Department for Business, Energy and Industrial Strategy, and I confirm that we have state aid approval for the inclusion of remote island wind as defined using this criteria. He asked whether the Commission had granted that. It has granted that state aid approval; that was published by the Commission in February of this year. I hope that reassures the hon. Gentleman on any concerns he has about the approval process for state aid.
The hon. Gentleman also asked about the definition of remote islands and whether that excludes English islands. As he will know—I am sure he has seen the map in the consultation document published in December—a small number of remote islands off the coast of England and Wales could satisfy the criteria, but we do not envisage at this stage more projects coming forward. In practice, the only planned projects that we are currently aware of that might meet the definition of remote island wind are in Orkney, Shetland and the Western Isles.
The hon. Gentleman alluded to pot 1 and onshore wind. No decisions have been taken on running another allocation round for pot 1 technologies at present.
The Minister is saying that no decision has been made about pot 1 future auctions. Does that mean that the response I got at Scottish questions today about possible onshore wind in Scotland being eligible for future auctions was not correct?
I am not saying that at all; I am saying that I am not in a position at this stage to give the hon. Member for Kilmarnock and Loudoun the reassurances he seeks. I absolutely understand why he asked the question, and his aspirations in relation to those projects, but I am unable to give him the solution he seeks at this present time.
Successful remote island wind projects will require the construction of new transmission links. The point that the hon. Member for Kilmarnock and Loudoun makes about interconnectors is a salient one. It is one that the Department is well aware of and it is looking at. Transmission links that wave and tidal projects would also be able to use are important. Establishing new transmission routes could therefore help unlock the potential of other innovative new technologies. The Government clearly have to be the catalyst to bring on those disruptive technologies.
For brief clarification on new links being developed, my understanding is that Shetland does not currently have an established interconnector link but shortly will have. Until such a link is finally established, Shetland does not technically qualify as a remote island under the headings put forward in the text of the SI. However, when that link is built, it will qualify, but the link may be built because it has some wind that has qualified. There appears to be a potential chicken and egg problem there. I am sure that the Minister is on the right side of the egg or the chicken, but might he clarify that point?
That is absolutely right. The phrase that the hon. Gentleman used is most apposite: “shortly”. We hope that the facility will be in place quickly, and that will allow the completion of such projects to proceed.
Finally, the independent energy regulator, Ofgem, assesses the need for transmission investment based on a proposal developed and submitted by the relevant transmission owner. The transmission owner for the relevant part of Scotland has already submitted its proposal for Orkney to Ofgem, and we understand that it will submit proposals for the Western Isles and Shetland later this year. Remote island wind is a key part of the needs cases.
The Government are committed to cutting emissions, increasing efficiency and helping to lower the amount that consumers and businesses spend on energy across the country, in conjunction with supporting economic growth as part of our modern industrial strategy. The draft regulations implement changes to the contracts for difference scheme to enable it to continue to support new renewable generation and to provide best value for bill payers in the coming years. I commend the regulations to the Committee.
Question put and agreed to.
The Committee has considered the draft Contracts for Difference (Miscellaneous Amendments) Regulations 2018.
Draft European Union (Definition Of Treaties) (Association Agreement) (Central America) Order 2018 Draft European Union (Definition Of Treaties) (Political Dialogue And Cooperation Agreement) (Cuba) Order 2018
The Committee consisted of the following Members:
Chair: Sir Henry Bellingham
† Bradshaw, Mr Ben (Exeter) (Lab)
† Brereton, Jack (Stoke-on-Trent South) (Con)
† Courts, Robert (Witney) (Con)
† Debbonaire, Thangam (Bristol West) (Lab)
† Double, Steve (St Austell and Newquay) (Con)
† Duncan, Sir Alan (Minister for Europe and the Americas)
† Freer, Mike (Finchley and Golders Green) (Con)
Gethins, Stephen (North East Fife) (SNP)
† Goodman, Helen (Bishop Auckland) (Lab)
† Grant, Bill (Ayr, Carrick and Cumnock) (Con)
Hoey, Kate (Vauxhall) (Lab)
† Killen, Ged (Rutherglen and Hamilton West) (Lab/Co-op)
† Morris, Anne Marie (Newton Abbot) (Con)
† Rowley, Danielle (Midlothian) (Lab)
† Sobel, Alex (Leeds North West) (Lab/Co-op)
† Stewart, Iain (Milton Keynes South) (Con)
† Swire, Sir Hugo (East Devon) (Con)
Claire Cozens, Committee Clerk
† attended the Committee
Sixth Delegated Legislation Committee
Wednesday 11 July 2018
[Sir Henry Bellingham in the Chair]
Draft European Union (Definition of Treaties) (Association Agreement) (Central America) Order 2018
It is certainly in order for right hon. and hon. Members to remove their jackets if they so desire. I will now call the Minister to move the first motion and then to speak to both draft orders. At the end of the debate, I will ask the Minister to move the second motion formally.
I beg to move,
That the Committee has considered the draft European Union (Definition of Treaties) (Association Agreement) (Central America) Order 2018.
With this it will be convenient to consider the draft European Union (Definition of Treaties) (Political Dialogue and Cooperation Agreement) (Cuba) Order 2018.
It is a pleasure to serve under your chairmanship, Sir Henry. I thank all right hon. and hon. Members for attending the Committee, particularly my right hon. Friend the Member for East Devon, who I think was the first Minister to visit Cuba after a gap of more than a decade and is therefore well informed for the purposes of our deliberations.
The international agreements under consideration have all been negotiated between the European Union and its member states on the one hand, and third countries on the other. Each agreement provides an enhanced framework for regular political dialogue at ministerial, official and expert level. The EU-central America association agreement will enhance co-operation in areas of common interest, including counter-terrorism, human rights and migration. It also makes extensive provision for future trade relations, with an estimated net benefit to the UK of between £714 million and £1.1 billion. Increased exports by UK manufacturers are expected to account for 80% of that projected benefit, with the remaining 20% coming from increased agricultural exports and reduced tariffs on UK exports to central America.
The EU-Cuba political dialogue and co-operation agreement commits the EU and Cuba to co-operate on a range of issues, and promotes trade through enhanced exchanges of information and technical assistance to reduce non-tariff barriers. The agreements are an important tool for promoting British and European values and standards. Some have been under negotiation for a number of years, meaning that successive UK Governments have been involved in shaping the EU’s approach to the negotiations. The EU has numerous similar agreements with other third countries around the world, all of which have passed through this ratification process in the House. Although this is an unusual time in our relations with the EU, this is a case of business as usual continuing in the UK’s and the EU’s interest.
Approval of the draft orders is a necessary step towards the UK’s ratification of these agreements, through designating them as EU treaties under section 1(3) of the European Communities Act 1972. The third countries concerned have all chosen to pursue closer ties with the European Union and its member states, which the Government welcome. We believe that, by bringing countries closer to the orbit of European values and standards, these agreements are firmly in our national interest.
The provisions of each agreement covered by the draft orders are not entirely identical. They are the result of years of negotiation and reflect the differing priorities that we share with each partner country and the varying depth and maturity of the relationship that the EU and its member states already enjoy with them. For example, EU-third country agreements with emerging democracies include a significant focus on supporting reforms and democratic institutions, whereas agreements with long-term partners focus to a much greater extent on international co-operation to address broader global challenges.
I am conscious that right hon. and hon. Members may have questions about the impact of our departure from the EU on the status of these agreements and our ratification of them. I will briefly clarify the process. As Members will be aware, until we leave the EU on 29 March next year, the UK remains a full member state, and all the rights and obligations of EU membership remain in force. During this period, the Government will continue to negotiate, implement and apply EU legislation. I am advised that the agreements before us are unlikely to enter into force before the UK has left the EU.
After our departure in March 2019, we will no longer be able to ratify EU-third country agreements. However, the draft withdrawal agreement includes provision that during the implementation period the UK will be treated as if it were an EU member state for the purposes of international agreements, with the effect that the UK would be bound by agreements that enter into force during the implementation period. If any of these agreements were to enter into force during the implementation period following UK ratification, the UK would not need to adopt further domestic legislation to ensure that it could apply and be bound by the agreement, in compliance with the terms of the withdrawal agreement.
Nevertheless, I believe that the impact of our departure from the EU is a peripheral issue for us today. I urge hon. Members to focus on why implementation of these agreements is firmly in our national interest. First, the agreements formalise hugely positive relationships on which the EU is embarking with third countries across the world. They seek to strengthen democratic values, the rule of law and environmental protections, and make trade and investment more predictable for businesses, including our own.
If the Minister has the time and the inclination, could he address the means by which the agreements can help to enforce human rights in Nicaragua, for example, which are a great concern to a number of hon. Members at the moment? Nearly 300 people have recently been murdered by the regime there, and a delegation in Parliament this week raised concerns with us. It would be helpful if the Minister could explain that point.
The right hon. Gentleman is absolutely right to raise the issue of Nicaragua. The manner in which we can diplomatically do as he suggests is much more through our bilateral day-to-day relations and the representations we make at a diplomatic level through our excellent embassy in Nicaragua, and the sort of efforts and dialogue we have on all levels, working with our international partners, be that in the United Nations, the EU or anywhere else. Although there is a general climate of improvement, which I hope these agreements will enhance, when it comes to specific immediate issues—it is absolutely right to raise them today—that is much more me talking to a fellow Minister, officials talking to officials, an ambassador making representations and us working within the United Nations to make sure that pressure is properly applied wherever there is an unacceptable display below the sort of standards we would like to see.
I cannot exaggerate how important the right hon. Gentleman’s question is. Nicaragua, Venezuela, the peace process in Colombia for example and the way in which Cuba is going to step out of its past into a much more realistic future are all part of these agreements, but also of our continuing diplomatic efforts, which you, Sir Henry, will have fully appreciated from your time as a Minister in the Foreign Office. We believe very strongly that it is in the UK’s interests, as a leading advocate of democratic values and a rules-based international system, to support the passage of the agreements.
Secondly, it is important, including for our departure negotiations, to deliver on the Prime Minister’s commitment to continue to be a supportive EU member state until we leave. Ensuring that the UK does not block, delay or disrupt EU “business as usual” is crucial to fulfilling that commitment. Thirdly, as an EU member state, the UK has been a key driver in all these agreements. At a time when we are strengthening ties with countries around the world, it would be wholly counterproductive to be seen in any way to be hindering the aspirations of those countries to have closer relations with the EU.
With that explanation, I very much hope that hon. and right hon. Members on the Committee will endorse the merits of these two orders.
It is very nice to see you in the chair, Sir Henry, on this warm, sunny, summer afternoon. I am grateful to the Minister for his explanation. I have a number of questions for him about both the substance and the process.
In general, Her Majesty’s Opposition welcome any arrangements that allow for the further integration of Latin American countries into the global economy. Arrangements to co-operate with them to encourage improvements in human rights, democracy, good governance and regional political relations, and to strengthen regional integration are all welcome. However, the Minister told us that the trade benefits to the United Kingdom from the draft central America order will amount to £700 million, but it was not clear over what period we would get that benefit.
According to one civil society group, ACT Alliance EU, and the Copenhagen Initiative for Central America, some civil society organisations in central America are opposed to ratification of the association agreement. As the Minister said, it was first signed in 2012, and since then events in those countries have moved on, not all in a positive direction. As my right hon. Friend the Member for Exeter said, Nicaragua has particular problems, and recent national unrest has so far led to the deaths of 300 people. The risk is obvious.
This would be a good opportunity for the hon. Lady, who is speaking on behalf of Her Majesty’s loyal Opposition, to condemn, on behalf of Her Majesty’s loyal Opposition, what is going on in Nicaragua at the moment and in Venezuela, which poisons the region.
Of course. Her Majesty’s Opposition condemn all human rights abuses. I shall confine my remarks to Nicaragua, because that is what the draft order is about, but if the right hon. Gentleman is interested in my views on Venezuela, they were set out very fully in a Westminster Hall debate last September.
With Nicaragua, it is essential that the international mediation that has begun is followed through. We are extremely pleased that the United Nations is now on the ground and able to make a proper and full assessment of the problems and every single episode of violence that has taken place in the past three months. We do not, however, support calls from some parts of the American Administration to see a non-democratic change of Government. I would be interested to hear from the Minister whether he supports such calls from those parts of the American Administration.
The situation in Nicaragua is worse than it was when the documents we are considering were drafted. The situation is also extremely bad in El Salvador, where there is a lot of gender-based violence, which we are very concerned about. Hon. Members are probably aware of what Pope Francis said about what is happening in El Salvador, where, at the moment, women who have had abortions, even if as a result of being raped, are tried for murder. Some of them have consequently faced the death penalty. I am most concerned for the Minister to take seriously the human rights elements of the association agreements. No monitoring mechanisms seem to be set out to deal with violations. Will the Minister explain how violations will be monitored?
The explanatory memorandum highlights the importance of working with those countries on counter-narcotics. I remind the Minister that the value of illegal drugs smuggled into the United Kingdom peaked at £3.2 billion in 2016—more than double the imports of the previous year. Co-operation is covered in the association agreements, but what co-operation is being undertaken to address the international drugs trade, which is as much a problem for us as it is for the central American countries, with which we obviously have a shared interest?
The hon. Lady makes an extraordinarily important point about the fact that the UK is the recipient of many of the drugs that are smuggled through the region. Will she take it from me, as a former Minister for the region, that the UK is involved disproportionately in trying to assist those countries, but that my right hon. Friend the Minister will be unable to go into much detail about the nature of that assistance?
The right hon. Gentleman is demonstrating what an excellent Foreign Office Minister he was, but I am directing my questions to the current Minister to see who is in charge of steering this through.
Equally good, I would like to think.
We will find out whether the Minister is equally good at answering these questions, rather than seeing them deflected via Devon.
A related concern is the human rights of migrants from central America. This agreement contains a commitment to ensure the effective employment, protection and promotion of human rights for all migrants. I am interested to know from the Minister what representations have been made to the American Government with respect to the human rights of migrants from central America.
On the process, the Minister explained that if the association agreements are in force after our departure from the European Union, the United Kingdom will be bound by them during the implementation period. I want to ask him three questions about what happens once the implementation period comes to an end in December 2020, which is quite soon. These documents were drafted six years ago, and that date is only two years ahead of us. After the implementation period, if the association agreements are in place, is it the Minister’s intention to roll them over for what we might call the proper post-Brexit period? If it is not his intention simply to roll them over, what is his plan? What is his plan if they have not been implemented by December 2020?
The impact assessment provided to the Committee for this afternoon is outdated, as it was prepared in 2015. Is the Minister confident that there have been no significant changes in the intervening three years that might affect the assessment of the impact on British businesses? The explanatory memorandum says that the Government have committed to agreeing a transitional arrangement to ensure continuity in trade. Will he produce a new explanatory memorandum with a new impact assessment in 2019, once we have left the EU?
We are extremely pleased that Cuba is making progress in being integrated into the global economy. Again, the Cuba document was drafted and written some time ago. It would be helpful to know from the Minister how the outlook for trade with Cuba and the operation of this agreement are impacted by President Trump’s decision to reinstate restrictions on Americans travelling to Cuba and United States business dealings with Cuba. At the moment we have yet another rift between the policy approach of the European Union and that of the United States. What are the Ministers intentions with respect to continuing dialogue with Cuba alongside our European partners as we move forward?
This is a tricky issue. We have still not heard how the Government intend to co-ordinate common, foreign and security policy with the European Union post Brexit, which is highly relevant to what the rollover arrangements will be for both statutory instruments. It would be extremely welcome if the Minister updated us and gave some insight into that issue.
I was not seeking to refer back to my time as the Minister in the area or to laud myself, but merely to point out some pretty obvious facts: that the Minister cannot go into detail on much of the security support we are providing in the region. I would have thought that was patently obvious.
I welcome this set of agreements, particularly in relation to Cuba. The hon. Member for Bishop Auckland makes a valid point about the relationship between the United States and Cuba, which I believe is currently regrettable, there having been much progress made in the last few years, before President Trump. Will my right hon. Friend the Minister say what progress we are making on trying to undertake bilateral trade with Cuba? Is there still any reluctance to get involved, on the part of the banks in particular, because they are worried about the wide reach of the Americans? I believe Cuba is on a path—perhaps not a path to democracy, but certainly a better path than it has been on. It has been held back for the best part of the last century by a repressive, totalitarian left-wing regime, which is unfortunately replicated elsewhere in the region.
Lord Hague of Richmond, when he was Foreign Secretary, made a speech at Canning House about British re-engagement with the region. I am particularly pleased that my right hon. Friend the Minister has been there so often. The Opposition spokesperson talked about El Salvador. During my time, we opened a small embassy there—when I say “small”, I think it was one room in San Salvador. The hon. Member for Bishop Auckland is absolutely right to draw attention to the human rights abuses in El Salvador, but she will be equally aware of the terrible gang culture that emanates in Los Angeles and the rest of the west coast of America of Salvadorians coming back to El Salvador, and the disruption that that is causing in that country. They are due as much support and assistance as they can possibly ask for, in my opinion.
I hope that after the United Kingdom has exited the EU we will give a priority to bilateral treaties with the region, to continue the work that many of us have undertaken there. With that in mind, I hope that the Minister will update us on where we are with organisations such as the Community of Latin American and Caribbean States and the Organisation of American States, which is still run by Luis Almagro.
The situation in Nicaragua is deteriorating. I hope that the British Government will also talk to the OAS in particular about what is going on there, as well as in Venezuela. The Committee will be aware that in April the Guatemalans finally held a referendum on the border dispute with Belize. Belize is close to us, as a Commonwealth country. That was hugely supported by the British Government—with some opposition, I would say, from our EU partners—because we of course care passionately about that part of the world. I wondered whether there was any update on bilateral relations between Her Majesty’s Government and Belize, in terms of trying to persuade Belize where we go next after the referendum, encouraging Belize to do its bit and ensuring funding if the EU is not there.
The region views the EU with, I am sure, a certain degree of interest, but it views the British with a historical emotion, really. Countries there are keen for better bilateral relations, for more visits and for British business and British goods to do more there. We have a huge opportunity to do so, and I very much hope that my right hon. Friend the Minister will continue the good work he has started and the cracking pace at which he is conducting our affairs in the region.
I am grateful to the right hon. and hon. Members who have contributed this afternoon. As I outlined in my opening speech, these agreements will support our values and objectives long after we have left the European Union. By ratifying them, we are demonstrating our good will as a loyal and supportive partner of the European Union and to each of these countries seeking to expand their relations with the EU. These agreements do not detract in any way from our own prospects outside the EU. We are enhancing our co-operation with partners across Latin America as we leave the EU, in line with our ambitious vision to have a global Britain.
In response to the question from the hon. Member for Bishop Auckland about the financial benefits that we hope will ensue from these agreements, a figure of between £700 million and £1.1 billion was quoted. In answer to her question over what period, the trade benefits of the EU-central America association agreement are expected to be realised over a 10-year period. That is the calculation that has been applied, but that means by 2023, following the start of the provisional application of all this in 2013. That is set out in the impact assessment attached to the order. We are working to transfer the agreement to a UK-central America association agreement, which will result in our gaining equivalent benefits once we have left the EU.
I say to my right hon. Friend the Member for East Devon, a former Minister, that Cuba is very important. It is going through a significant transition and is a country with which we wish to develop a close association, to help it to transfer from being the preserve of the Castros into a country that looks more widely across the world and therefore serves the economic interests of its citizens. My right hon. Friend is absolutely right to say that one of the major obstacles to that is the constraint on dollar transactions that is applied to any kind of business in or around the country. That is a problem that we would like to see overcome, because a prosperous Cuba is more likely to be a free and co-operative Cuba. We hope that we can, in a benign way, without being over-didactic or instructive, help Cuba to move from the past into the future in a way that is of benefit to everybody.
As for what we have heard otherwise today, I hope, Sir Henry, that it is not inappropriate for me to point out that we are discussing a pair of very specific orders, rather than having a debate on the current affairs of the region, notwithstanding important issues in Guatemala, Nicaragua and, perhaps more than anywhere else, Venezuela, where many people are fleeing the country, because the President has basically destroyed its economy and people are being forced away for fear of being unable to buy the most basic goods, in a climate of hyper-inflation. This is not a debate about current events; it is a debate about these two orders. The agreements will do things such as enhance political dialogue and further co-operation in areas such as climate change, the environment, counter-narcotics, counter-terrorism, human rights and migration.
In the context of Cuba, which has been raised specifically, five annual dialogues are being established, on human rights, sustainable development, non-proliferation, the illicit trade in arms and unilateral coercive measures. The agreements are a framework within which good can be achieved, rather than a day-to-day narrative, which is more the preserve of the Foreign and Commonwealth Office and our diplomacy.
To conclude, I note that the hon. Member for North East Fife, the Scottish National party spokesperson, is absent. In a parallel Delegated Legislation Committee this morning, in which we considered three similar orders on EU-third country agreements, the SNP Member tried to vote no. When I inquired why, they said that they did so on the grounds that the devolved Administrations had not been consulted. I would like to put it on record that although the UK’s foreign affairs policy is totally a reserved matter, the devolved Administrations were consulted during the preliminary stages of consultation on each of these agreements. All the devolved Administrations confirmed that they did not anticipate any legislative changes as a result of the agreements, and no specific concerns were expressed, so the argument put by the SNP in relation to this morning’s Committee was utterly erroneous, specious and unmerited.
On the issue of Scotland, I notice that the trade section of the impact assessment for the order relating to central America shows that one of the benefits that will flow to us is that our geographical indications on Scotch whisky will be protected in central American markets. In return, there will be a reduction in the tariffs that they impose on Scotch whisky. I have already asked the Minister how the rollovers will operate, but it is not clear how geographical indications on food and drink will be preserved post Brexit. Will that not be an issue in this context, as well as more widely?
May I apologise to the hon. Lady? I did not properly answer her point about process, although I meant to. We are content that the orders will come into force within the implementation period, so her concerns will not apply.
I am grateful to the hon. Lady for pointing out the strength of the logic that I have put to the Committee, because what we are proposing will benefit Scotland. It is ironic, not to say illogical and absurd, that the Scottish National party should consider voting against something such as this, when its primary industry of Scotch whisky is likely to benefit. We find that the SNP is anti-Scotch whisky exports and that, had it been here, it would have perhaps voted against these orders, as it tried to this morning, on the grounds that it was not consulted, when it has been. The irony of the SNP position, added to its absence today, will not be lost on either side of the Committee. I thank you again, Sir Henry, for presiding over our proceedings, and I commend the orders to the Committee.
Question put and agreed to.
That the Committee has considered the draft European Union (Definition of Treaties) (Association Agreement) (Central America) Order 2018.
draft European Union (Definition of Treaties) (Political Dialogue and Cooperation Agreement) (Cuba) Order 2018
That the Committee has considered the draft European Union (Definition of Treaties) (Political Dialogue and Cooperation Agreement) (Cuba) Order 2018.—(Sir Alan Duncan.)