Examination of Witnesses (Questions 80-99)
MR GARETH
THOMAS MP, MR
EDMUND HOSKER
AND MR
PIERS HARRISON
18 OCTOBER 2007
Q80 John Bercow: Do you have an office
in BERR as well?
Mr Hosker: Yes.
Q81 John Bercow: So your office in
DFID will be occupied one day a week and your office in BERR will
be occupied four days a week. Is that right?
Mr Hosker: That is probably roughly
right, but it will be flexible in the light of the way the unit
develops.
Q82 John Bercow: Just so long as
both of the offices are there on the particular days that you
want to be in one or other of them.
Mr Hosker: We already have hot-desking
in BERR and that is pretty much the way I will work.
Mr Thomas: Notwithstanding where
individual staff are based, I too have offices in both departments
and I spend probably more of my time in the Department for International
Development, albeit still a considerable amount of time in the
Department for Business, Enterprise and Regulatory Reform. Frankly,
meetings about trade policy take place in the most appropriate
area, depending on the particular needs at the time. At the moment,
given that we are running three-line whips, quite a few meetings
are taking place within the House of Commons and in neither department.
Q83 John Bercow: You will appreciate
that this is a relatively unusual set of questions. It is and
we are seeking to extract lots of little bits of information.
I do not intend to prolong it, but I do want to ask you just a
few more things very quickly. Does the Europe and World Trade
Directorate still exist as part of BERR and the International
Trade Department still exist as part of DFID?
Mr Hosker: The Europe and World
Trade Directorate does still exist as a part of BERR and in effect
there are overlapping circles. Most of the people within the Europe
and World Trade Directorate are now part of the Trade Policy Unit
but not all of them, which is why it continues to exist. The Europe
and World Trade Directorate also deals with European economic
performances, implementation of the services directive, export
controls.
Q84 John Bercow: I am just slightly
concerned that if something continues to exist as part of BERR
but several of its officials are functioning within the Trade
Policy Unit, which is part of DFID, there is quite a lot of potential
scope for confusion and uncertainty—to put it no more strongly—as
to lines of accountability. I choose my word carefully; it is
not necessarily lines of responsibility, when you might well say
you are the Minister and you know exactly who is responsible for
each area. To whom are such people accountable if they are still
part of a unit which reports to the Secretary of State for Business,
Enterprise and Regulatory Reform, but they are also functioning
within a unit which reports in the intermediate sense to Mr Thomas
and ultimately to Douglas Alexander? It has to be hoped that there
are extraordinarily good relations between all parties and a less
than usual human capacity for confusion, inter-departmental rivalry
and crossed wires.
Mr Thomas: I think you are seeing
plots and conspiracies where you do not need to. There are other
examples of cross-government units; you will be familiar with
the Sudan unit no doubt, where staff do come together to work
on specific issues, but still stay within their main departments.
My own experience of the functioning of the Trade Policy Unit,
in terms of the support I am getting to do my job, is that the
arrangements are bedding down very well. I take your point that
there is always the potential for some confusion, but there is
scope for confusion in a whole variety of other settings. The
arrangements are bedding down well and I have felt extremely well
supported by civil servants from both departments who are now
working in the unit.
Q85 John Bercow: I very much hope
that the record will justify your optimism. For the record, if
it is parliamentary to do so, I confirm that I am not a subscriber
to conspiracy theories, but I am a keen subscriber to the cock-up
theory of history. Sometimes problems can arise not because there
is a deliberate intention to mix it or to foster disillusionment
or rancour, but simply because there is an uncertainty. Very finally
I ask you, with the indulgence of the Chairman because we need
to get these facts on record, what the implication will be in
policy development terms in practice of the changes? For example,
the TUC[5]
feels in its submission that it is not yet clear how, under the
new arrangements, consultation will feed into decision making.
I welcome your thoughts about that and by implication presumably
so will the TUC. Can you just tell me whether the Trade Policy
Consultative Forum will be maintained and if so whether it will
operate broadly as now?
Mr Thomas: My understanding is
the TUC Consultative Forum will continue with pretty much the
same process involved. On the opportunities for consultation,
I would expect people wanting to contribute ideas on trade policy
issues to come in the first instance through me, albeit some will
no doubt want to write direct to the Secretary of State for International
Development and some I suppose may write to other ministers; some
will obviously write to the Prime Minister direct. That is the
way I would expect the arrangements to function.
Q86 Ann McKechin: In the evidence
we received from both the TUC and the CBI there seemed to be doubts
from both parties as to what the role actually is as between your
own office and the Secretary of State for International Development
and that of John Hutton, the Secretary of State for Business,
Enterprise and Regulatory Reform. Could you clarify which of the
two secretaries of state is the senior partner on the area of
trade issues? The TUC said that it remained unclear about the
decision-making structures between ministers and departments.
The CBI on the other hand expressed concern that the changes could
be a sign that the UK now views development as the engine of trade
policy rather than trade the engine of development policy. Could
you also indicate what discussions you have had since your appointment
with the major parties such as the TUC and the CBI to try to reassure
them about where policy stands?
Mr Thomas: I have met with both
the CBI and TUC on a number of occasions, as indeed have officials.
In terms of how the burden of responsibility falls between the
two secretaries of state, they are obviously equals. The Secretary
of State for International Development has been asked to chair
the newly established Cabinet committee which seeks to bring all
the interests in terms of trade around the table. As I indicated
in my answer to the Chairman, we would expect the Secretary of
State for International Development to be on all those trade negotiations
which had a very strong development focus, such as the Doha Round,
such as Economic Partnership Agreements, and indeed for the Secretary
of State for Business, Enterprise and Regulatory Reform then to
lead on those negotiations where the development component is
not quite so strong, such as some of the original trade agreements
and indeed the trade defence issues too. I have to say to you
that the Secretary of State for Business, Enterprise and Regulatory
Reform has been active in making the case for the Doha Round of
negotiations in various bilateral contacts that he has had as
indeed have a range of other ministers. That is in support of
and influencing strategy which the Cabinet committee has drawn
up and which we are seeking to take forward.
Q87 Ann McKechin: You will understand
that there can be concerns that policy can fall between two departments
and obviously your aim is to try to obtain better policy coherence
in Government on the issue of trade. How are the two departments
proposing to measure whether these changes are going to deliver
greater policy coherence?
Mr Thomas: It is effectively my
responsibility to make sure that a ball is not dropped between
the two departments in trade policy terms and that is one of the
reasons why, in the 106 days since my appointment to this job,
I have been consulting with a whole variety of stakeholders on
a number of different occasions. The Committee will be more than
well aware of the fact that we are very much in the business end
of the EPA negotiations and indeed that the Doha Round is at a
critical point. So it is trade policy matters which have dominated—apart
from select committee appearances this week—my work as a
minister since my re-appointment by the Prime Minister.
Q88 Ann McKechin: May I just clarify
the issue of departmental reports? The Committee is very familiar
with the DFID annual report and the traffic light system but I
am just wondering to what extent the BERR department will report
on trade issues in their annual submission. Will it be in the
same way or will it be differently?
Mr Thomas: I expect the Department
for Business, Enterprise and Regulatory Reform to report on trade
issues. You will be aware that as a result of the Tom Clarke International
Development Act, the Department for International Development
has a particular set of responsibilities in terms of reporting
on the coherence of cross-government policy and I expect that
to continue.
Q89 Sir Robert Smith: Part of that
coherence is meant to be established through Cabinet sub-committees
and the International Development Secretary chairs the sub-committee
on trade policy. According to the DFID evidence it is trade policy
and promotion, but when the Minister for promotion, Lord Jones
of Birmingham was giving evidence to another committee, he talked
about the fact that he was not involved in that sub-committee
because the International Development Secretary would chair the
trade policy Cabinet sub-committee but that it was only on the
trade policy side and not what he was doing. Can you clarify?
Is this sub-committee on trade policy or is it for trade policy
and promotion?
Mr Thomas: It is predominantly
for trade policy issues. So the items which have been on the agenda
thus far have been on the Doha Round, for example, and on Economic
Partnership Agreements and Lord Jones of Birmingham has attended
one of those sub-committee meetings. He will travel widely to
promote British business, as he has been appointed to do. In the
course of those visits there will be opportunities for him, as
indeed he has already, to make the case for progress on the Doha
Round. He is an important and valued colleague as a result.
Q90 Sir Robert Smith: So if he is
there, he can attend the sub-committee.
Mr Thomas: Yes.
Q91 Sir Robert Smith: It has met
and at the moment Doha and EPAs are on the agenda. Does it meet
frequently?
Mr Thomas: It has met twice within
the 106 days and Doha and EPAs have been the predominant issues
discussed because they are two of the very big issues which are
before us in trade policy terms at the moment?
Q92 Sir Robert Smith: Is he in the
loop then too that if there is a policy agenda on the development
round he does not promote business cutting across that government
agenda?
Mr Thomas: I am not quite sure
what scenario you are thinking of specifically, but he is a colleague
of mine within the Department for Business, Enterprise and Regulatory
Reform and we have regular ministerial meetings, so there is a
joining up in that process. He has attended the Cabinet committee
as such and has taken part actively in the discussion which took
place there. We work closely together, albeit in different areas.
Q93 Sir Robert Smith: Presumably
on the promotion side he can pick up concerns about where trade
policy is not working in the UK interests and feed that back in.
Mr Thomas: I have no doubt that
he will do so; yes. I would welcome that if that were indeed what
he were to pick up.
Q94 Chairman: As you can appreciate,
what we are striving for is to see how in practice the balance
between the promotion of British interests and the interests of
developing countries can be reconciled. Maybe it is perception
and not reality, but sometimes people see that when what was the
DTI, now BERR, is the lead then it tends to be jobs, investment,
exports and whatever it may be for the UK economy. When it is
the Department for International Development then it is more about
what is the real benefit to developing countries and the extent
to which they can use trade to lift their economy. The two things
are not mutually exclusive but the emphasis can make a difference.
That is essentially what we are trying to get out.
Mr Thomas: Your clarification
is very important because they are not mutually exclusive at all
and that has become very clear in the discussions I have had with
all sorts of stakeholders, that they recognise that. I appreciate
that it is a very new arrangement and I entirely understand the
Committee's interest. I suppose what I would ask the Committee
to dwell on is the fact that in particular not only has there
been a joint unit established across the two departments, but
also in a sense the job of minister for trade has been expanded.
There are two ministers focusing on trade issues: one purely on
trade promotion, the role Lord Jones of Birmingham has, and then
one specifically on trade policy, the role I have, albeit we both
report in to secretaries of state with interests in these areas.
Q95 Chairman: We will monitor the
situation with genuine interest to see how it works out. One particular
question on the anti-corruption strategy—we have some more
questions later—I was in attendance when Hilary Benn, after
he had been appointed as the champion for combating overseas corruption,
had a fairly high profile launch at the Foreign Office. It is
not entirely clear how that has changed. Transparency International,
in evidence to us said that it is understood that the role of
ministerial champion now falls to the Secretary of State BERR,
but nowhere is this set down. The TUC says that so far there has
been no announcement that John Hutton is the new ministerial champion,
although the evidence that the Government has given to this inquiry
states that the role has moved to BERR but does not specify the
Secretary of State. Who is the ministerial champion for overseas
corruption? Given that the establishment of that post was given
such high profile, why has the transfer to the current champion
not been given a similarly high profile?
Mr Thomas: The ministerial champion
is the Secretary of State for Business, Enterprise and Regulatory
Reform. It is a little unfair, if I may say so, to expect my Secretary
of State for Business, Enterprise and Regulatory Reform in a sense
to have advertised his responsibility in this area immediately.
I know that he is working very hard on the preparation of the
second anti-corruption plan for Government and I would suggest
that the launch of that would be an appropriate time for all sorts
of focus on his particular responsibility. I know he appreciates
having the responsibility but he has been concentrating on the
detail of work in that area rather than on seeking to advertise
the post.
Chairman: I shall not extend it now,
because we have some more questions later, other than to say that
the reason we have been trying to have this meeting ever since
we did our conflict report, which is nearly 18 months, is because
we had a concern that the output from the DTI on tackling corruption
seemed to be rather less robust than was the case in the Department
for International Development. Therefore you can understand if
the transfer of the champion goes from one department to the other,
frankly we are entitled to ask questions about whether there is
significance to that. However, we have other more detailed questions
which we will pass onto later.
Q96 Sir Robert Smith: You have already
mentioned in your evidence and certainly in the written evidence
that between the two secretaries of state, in trade negotiations
such as Doha and EPA, where there is a predominant development
focus it will be the International Development Secretary and where
it is more on a trade/business focus it will be the Secretary
of State at BERR who would take the lead in those negotiations.
I just wonder whether you could clarify what would happen if they
are tending towards the trade side rather than development but
are with developing countries. For instance, who will lead the
bilateral free trade agreements which might be negotiated with
India, South Korea and ASEAN?[6]
Would that be International Development?
Mr Thomas: I would expect to be
leading on those in myself but reporting in to both secretaries
of state. That is one of the purposes of the Cabinet sub-committee,
to be able to have the discussions about what our approach should
be on regional trade agreements, indeed other areas around the
table, so that all the different interests are being aired in
that room as we formulate our policy and strategy.
Q97 Sir Robert Smith: Would that
be the same with the EU-Mercosur negotiations involving Brazil
and so on?
Mr Thomas: Indeed; yes.
Q98 John Bercow: Do you believe that
development-focused Economic Partnership Agreements can still
be signed by the end of this year? With about 10 weeks to go might
it now be time seriously to consider a Plan B?
Mr Thomas: We are still seeing
a lot of work from the Commission and indeed from the negotiators
in the six regions to try to complete Economic Partnership Agreements
and we would want to encourage that as much as is possible.
Q99 John Bercow: That is a gloriously
unspecific, dare I say very ministerial reply. On 2 October Commissioner
Mandelson stated that he would reach an interim goods-only deal
with the Pacific ACP[7]
region, leaving services, investment and procurement for a second-stage
deal and he has reportedly offered the same to the West African
region. How do you respond to the statement from one of the ACP
regions, ECOWAS[8],
early this month that they will not be in a position to sign the
goods-only agreement by the end of this year and that they have
instead called for a legal derogation to WTO[9]
rules to allow for time to make the agreement work better for
their region. That is their view whatever Peter Mandelson thinks.
Do you back their case? If so let us hear it. If not, why not?
Mr Thomas: May I pick up your
first point? In order to be compliant with the rules of the World
Trade Organisation it is goods-only agreements which have to be
concluded, and this is something we have been consistently pointing
out as the UK Government, that if developing countries, through
their ACP regions, do not want to negotiate on the so-called Singapore
issues, then they should not have to do so. Indeed we welcomed
Commissioner Mandelson's comments in March or April when he said
that he would be willing to see a focus only on the goods-only
part of an Economic Partnership Agreement by the end of this year
and then return to negotiations on the so-called Singapore issues
at a later date. In terms of picking up your comments about ECOWAS,
we have seen the ECOWAS comments and are seeking to have conversations
with them about what exactly their difficulties are in completing
their market-access offer and we are obviously in discussion with
the Commission. I have received a letter from Dr Chambas who is
the lead negotiator for ECOWAS and I am hoping to have a further
conversation with him shortly. The other point I should probably
make at this point is that we think all six regions will see different
agreements. By definition the nature of the products produced
and for sale through to the European Union is very different and
therefore there will be different dimensions. The Caribbean, for
example, are interested in negotiating on some of the Singapore
issues and we support their right to do so. Other regions are
not and we believe their right not to negotiate in those areas
should be respected too.
5 Trades Union Congress (TUC) Back
6
Association of Southeast Asian Nations (ASEAN) Back
7
African, Caribbean and Pacific (ACP) Back
8
the Economic Community Of West African States (ECOWAS) Back
9
World Trade Organization (WTO) Back
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