The Trade Bill and Legislative Consent

Published 23/03/2018   |   Last Updated 27/05/2021   |   Reading Time minutes

The Trade Bill

The Trade Bill was laid before the House of Commons by the UK Government on 7 November 2017. It completed Committee Stage in the House of Commons 1 February 2018. A date for the Report stage has not yet been set. The Bill is the third in a series of Brexit related Bills introduced by the UK Government. The Bill closely relates to the Taxation (Cross Border Trade) Bill currently awaiting Report Stage in the Commons and the European Union (Withdrawal) Bill currently undergoing Committee Stage in the House of Lords.

Trade is an exclusive competence of the European Union (EU) meaning that the EU conducts all trade negotiations on behalf of its Member States and that Member States are not allowed to pursue individual trade agreements with non-EU countries. The Trade Bill and the Taxation (Cross Border Trade) Bill seek to provide UK Ministers and, in some circumstances, devolved Ministers with framework powers to establish a standalone UK trading regime after the UK leaves the EU.

The UK Government has stated that Legislative Consent is required from the devolved legislatures for the Trade Bill but not for the Taxation (Cross Border Trade) Bill as this relates to powers over customs and excise duties, external quotas and trade remedy investigations.

The Trade Bill has 12 clauses. In summary, it provides:

  • Regulation-making powers to ensure that the UK can implement any procurement obligations arising from the UK becoming a member of the GPA (Agreement on Government Procurement) in its own right.
  • The implementation of agreements with partner countries corresponding to the EU’s Free Trade Agreements and other trade agreements in place before the UK’s exit from the EU. The Bill includes regulation-making powers to implement any changes to domestic law which will be necessary for the UK to meet obligations flowing from these agreements.
  • Establishing the Trade Remedies Authority (TRA) to deliver the new UK trade remedies framework.
  • Enabling the TRA to provide advice, support and assistance to the Secretary of State in connection with the conduct of international disputes and other functions of the Secretary of State relating to trade and functions of the TRA. The TRA may also provide such advice, support and assistance to other organisations on its own initiative.
  • Power for HM Revenue and Customs (HMRC) to collect data on behalf of the UK Government to confirm the number of exporters of goods and services in the UK and to be able to identify those exporters for trade promotion purposes.

Legislative Consent

On 7 December 2017 the Welsh Government laid a Legislative Consent Memorandum in relation to the Trade Bill before the Assembly. It considered that Part 1 of the Bill and its associated Schedules would require consent on the basis that they are making provision for a purpose that is within the Assembly’s legislative competence. It concluded that as currently drafted it could not recommend that the Assembly give consent to the Bill:

As we have already set out in response to the European Union (Withdrawal Bill) it is vital any powers given to UK Government Ministers to make secondary legislation in devolved areas must only be used with the prior consent of Welsh Ministers. The Trade White paper suggested such consent from Devolved Governments would be sought and we believe this should be included on the face of the Bill. Further, as currently drafted, there are a number of restrictions placed on devolved Ministers’ use of the powers provided for in the Bill which are not placed on UK Ministers. We believe, as a matter of principle, that devolved Ministers should have the same powers in respect of matters falling within devolved competence as UK Ministers are being given.

Committee Reports

The Legislative Consent Memorandum has been subject to scrutiny by the External Affairs and Additional Legislation Committee (EAAL) and the Constitutional and Legislative Affairs Committee (CLA) of the Assembly. The two committees held a concurrent meeting on 12 February 2018 where they took evidence from the Cabinet Secretary for Economy and Transport, Ken Skates AM, on the Bill.

The EAAL Report was published on 9 March. It contained one Recommendation that “The Assembly should not grant its legislative consent to the provisions of Trade Bill identified as requiring the Assembly’s consent at this time.” Some other points covered in the Report were:

  • powers proposed for Welsh Ministers are framed too widely. EAAL’s preference would be to see them amended to restrict them to only making provision that “is essential”.
  • it supports the Welsh Government’s call for the use of powers held concurrently between Welsh Ministers and Ministers of the Crown to require consent. Whilst the Welsh Government’s proposal to require executive consent for the use of these powers is preferable to the current absence of consent arrangements, it would prefer to see the Trade Bill amended to also require the Assembly’s consent for the use of these powers.
  • Trade Bill should be amended to state that the powers it proposes cannot be used to amend the Government of Wales Act 2006.
  • Trade Bill amended to require the consent of the Assembly before an extension is made to the five-year period, insofar as it relates to the powers of Welsh Ministers.

The Report also stated the Committee’s intention to write to the UK Minister for Trade Policy to seek clarification of his comment that the proposed appointment of non-executive board members by devolved Ministers would undermine the independence of the Trade Remedies Authority.

CLA’s Report was published on 16 March 2018. Its conclusions included:

  • the National Assembly’s consent is required for clauses 1, 2, 3 and 4 and associated Schedules 1, 2, and 3. This is because those clauses and Schedules make provision in relation to Wales for any purpose within the legislative competence of the National Assembly for Wales.
  • The Bill gives the Welsh Ministers powers to make regulations as they consider appropriate. If the Welsh Ministers consider it appropriate, they can make regulations under clauses 1 and 2 in respect of any subject area that is within the Assembly’s legislative competence. Therefore, the National Assembly’s consent is required.
  • the use of concurrent powers by UK Ministers to make regulations that amend primary legislation in devolved areas should be subject to consent by the National Assembly.
  • it is probable that amendments to the Trade Bill will be necessary before the National Assembly will be in a position to provide its consent.

Article by Alys Thomas, National Assembly for Wales Research Service