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John Spellar (Warley) (Lab)
The Minister for Asia and the Middle East (Amanda Milling)
I am sure that the whole House will accept the apologies from the Foreign Secretary, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), who is otherwise engaged today.
The UK maintains a range of sanctions to constrain Islamic Revolutionary Guard Corps malign activity. Maritime interdictions in January and February 2022 led to the seizure of advanced conventional weapons travelling from Iran to the Houthis in Yemen. We support the strengthening of state institutions in Iraq and Lebanon, and work to end the conflict in Yemen and Syria.
John Spellar
Mr Speaker, you may recall that it was against considerable Whitehall resistance—it needed pressure from this House—that we got the Government to ban Hezbollah. I hope that the Minister will be more receptive to recognising that the IRGC is at the heart of destabilising proxy wars across the middle east and further afield, and that she will show more urgency in joining our allies in the United States in proscribing the IRGC.
Amanda Milling
The UK maintains a range of sanctions that work to constrain the destabilising activity of the IRGC. The list of proscribed organisations is kept under constant review, but we do not routinely comment on whether an organisation is under consideration for proscription.
Michael Fabricant (Lichfield) (Con)
The hostility with Iran has caused even greater friendship between the adjoining Arab countries and the state of Israel, so is not now the time to follow the US and some other countries by moving the British embassy from Tel Aviv to the capital of Israel, where its Parliament is, Jerusalem?
Amanda Milling
My hon. Friend is right to say that the UK and Israel share a thriving relationship, working together on bilateral priorities, as well as on regional issues of mutual concern. The British embassy in Israel is in Tel Aviv. I am aware of the possibility of a review but will not speculate further on this point.
John Cryer (Leyton and Wanstead) (Lab)
When we are talking about the people in power in Tehran and their proxies around the world, whom my right hon. Friend the Member for Warley (John Spellar) mentioned, we are talking about clerical fascists, who would probably have been on the same side as the Nazis if they had been around 80 years ago. Why can we not just get on with it and ban the IRGC, as we banned Hezbollah?
Amanda Milling
I have been clear in response to earlier questions on the IRGC and the range of sanctions to constrain its destabilising activity. I will not comment further on the possibility of proscription of this group.
Stephen Crabb (Preseli Pembrokeshire) (Con)
It is a mistake for the west to regard Iran’s sponsorship of proxies as somehow being a non-strategic irritant, as there is a continuous thread that links its sponsorship of terror with its ballistics programme and its march towards acquiring nuclear weapons capability. So does my right hon. Friend agree that we should not repeat the mistakes of the past and that any revised nuclear deal with Iran should be accompanied by very strong measures to discourage it from being the world’s largest sponsor of terrorism?
Amanda Milling
We have real concerns about the instability that Iran causes in the region. Its nuclear programme is today more advanced than ever. There is an offer on the table and Iran should take it urgently—time is running out and there will not be a better one. If this deal is not struck, and soon, the joint comprehensive plan of action will collapse. In that scenario, we will have to consider carefully the options with partners and allies.
Deidre Brock (Edinburgh North and Leith) (SNP)
The Minister for Europe (Graham Stuart)
The Northern Ireland protocol is not delivering the goals set out in it. First and foremost among those is ensuring peace and prosperity in Northern Ireland, and protecting the Belfast/Good Friday agreement. The protocol is also disrupting east-west trade, including by doubtless affecting businesses in the hon. Lady’s constituency. Northern Ireland is an integral part of the UK and we must resolve the very real problems it is facing, which is why we have introduced the Bill.
Deidre Brock
University College London’s chair of science and research policy recently said that the UK has “no pathway to association” with Horizon Europe and that
“leaving Horizon knocks us back both in reputation and in substance in terms of the UK as an international partner in research. It is fanciful to pretend anything else.”
Will the Government finally accept that as a truth? What does the Minister say to researchers and academics up and down the UK who are missing out on precious funding and collaboration with European partners in the name of the Brexit vanity project?
Graham Stuart
I am grateful for the hon. Lady’s passionate espousal of the need for us to be a member of Horizon, Euratom and the other programmes, all of which were agreed, as she will recall, in the trade and co-operation agreement. The EU has failed to implement our association with that, and there is no linkage. I would ask the hon. Lady, with the scientific community of this country, to stand up to the EU and say that inappropriate linkages should be resisted, that they are damaging them, damaging us and damaging our joint endeavours to tackle the greatest challenges facing mankind, and it is something that needs to change.
Mr Steve Baker (Wycombe) (Con)
I think we can all agree that the protocol, as it stands today, has become a thorn in the side of relations between us and Ireland, and indeed a thorn in Ireland’s side as it seeks to move things forward with the rest of the EU. Is it not time that we proceeded with the humility to recognise the legitimate interests of all parties to the protocol and the fierce resolve to say enough is enough and it is time to solve the evident problems that have arisen and to evolve the protocol in a negotiated way, if possible, but in any event to a solution that can last?
Graham Stuart
My hon. Friend is right. The protocol is not delivering the main objectives set out on its face. That is why something has to be done. I was delighted to spend Friday and Saturday at the British-Irish Association with the Taoiseach and the Irish Foreign Minister and, indeed, the vice-president of the European Commission. I believe, as I am sure my hon. Friend does, that our clear preference for a negotiated solution is the right one. I would further add that the Bill includes the facility to accelerate any negotiated agreement, and that is very much our offer to the EU. We prefer a negotiated solution. It is very important to put this right.
Sammy Wilson (East Antrim) (DUP)
Can the Minister assure us that in any of his discussions with his international counterparts he will robustly argue that the protocol cannot continue? Will he explain that it has ripped apart the Belfast agreement, it has undermined democracy in Northern Ireland, it has increased costs to consumers and businesses, it has disrupted Great Britain and Northern Ireland trade and displaced it with trade from the Republic, and it is being cynically used by the EU as a mechanism to punish the UK for leaving the EU, regardless of the cost to the people of Northern Ireland?
Graham Stuart
The hon. Gentleman makes very strong points. At the heart of the Belfast/Good Friday agreement is the idea of communities coming together, to have the Executive, to make sure that we put the war-torn years and all that tragedy behind us. It is clear that not just one party in Northern Ireland but the entire Unionist community has ruled out the protocol as a route to delivery of that. And, of course, there is disquiet in all communities, as can be found in the surveys of, for instance, the University of Liverpool’s Institute of Irish Studies.
Jerome Mayhew (Broadland) (Con)
I recently met a cross-party delegation of MPs from Tunisia, who are united in their opposition to the forced closure of the Parliament building with tanks by President Saied, and now his proposed rewriting of the constitution. To date, Tunisia has been the one spark of hope—
Mr Speaker
Order. That is not relevant to this question. I thought that there must be something somewhere, but I cannot spot it. Let us go to the shadow Foreign Secretary, David Lammy.
Mr David Lammy (Tottenham) (Lab)
We are facing a cost of living crisis in which bills are sky-rocketing and people across the country will face the choice between eating or heating. Instead of proposing a solution, the Conservatives have spent the summer ramping up the rhetoric on the protocol, to risk new trade barriers with Europe. This Minister has had a recent elevation. Will he take this opportunity to commit to scrapping the reckless Northern Ireland Protocol Bill so that the Government can begin serious negotiations with the EU to fix the protocol and avoid hitting the British public in their pockets?
Graham Stuart
I thank the right hon. Gentleman for yet again making it so crystal clear, both to the House and to the British public, that in any dispute he and his party will always side with the EU and not with the interests of the British people. [Interruption.] As he says, I am horribly new to this brief. The first thing I did on the first weekend after my appointment was to read the protocol. It does not matter how we look at it, the protocol is not functioning and it is not working. For him and his party to suggest that it is us and not the EU that needs to change tack shows that, yet again, he betrays the British people and shows why Labour now, in the past and in the future is unfit for office.
Alyn Smith (Stirling) (SNP)
I find myself in unexpected agreement with the right hon. Member for East Antrim (Sammy Wilson): I do believe that the protocol is being cynically abused. However, I do not think that it is being cynically abused by the EU; it is being cynically abused by the future Prime Minister. The Northern Ireland Protocol Bill is wrong in international law; wrong in politics, in that most MLAs support the protocol; and wrong as a negotiating tactic, because it has put backs up across the EU. There are ways of reforming the protocol within the protocol, but that has been ignored. The only way that the Bill makes sense to me is as a vehicle for the future Prime Minister to prove how tough she is on Europe. Now is the time to get rid of it. As we have heard, it is stymieing lots of constructive relations. Will the Minister please pass that on to the future Prime Minister?
Graham Stuart
As I have said, I am new to this, but I have looked at the protocol and it is not working. There are three main priorities. One is the protection of the single market—perhaps there is a tick. On the Good Friday agreement, peace in Northern Ireland and community consent, that is required by the protocol but it is not working, and neither is the prevention of unnecessary blockage for east-west trade. I would have thought that the hon. Gentleman, and even the shadow Foreign Secretary, might have put their constituents and the businesses that they represent first, and for once been prepared to recognise that it is the British Government who are correct. We are ready to negotiate. As the hon. Gentleman said, the protocol set out the objectives and said that it might need amendment, it might need replacement, but in any event it needs consent. That is what the protocol says. I suggest that he reads it, rather than insisting on the imposition—
Mr Speaker
Order. Minister, this might be your last outing, but do not overperform—save something.
Sam Tarry (Ilford South) (Lab)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Vicky Ford)
The British High Commission in Islamabad is closely monitoring the situation regarding the former Prime Minister of Pakistan, but any decision to progress charges would be a matter for Pakistan’s judicial system. At this time of terrible tragedy for the people of Pakistan, we do welcome the call from all across the political spectrum and divide to set aside their differences and work together on the flood response.
Sam Tarry
I welcome the Minister’s words, because this is a moment of real political upheaval amid one of the worst humanitarian disasters in Pakistan’s history—more than 30 million people are now displaced or impacted. I would like us not only to press all diplomatic channels for a fair and transparent process regarding the former Prime Minister of Pakistan but, more importantly, to increase the paltry £1.5 million of aid that we have committed to help Pakistan at a time of such disaster, given that we have such strong bilateral relations between our countries, and not just in constituencies such as Ilford South but right across the country.
Vicky Ford
This is a terrible tragedy with massive humanitarian consequences for the people of Pakistan. The UK was the first country in the world to announce its own financial assistance, and of course we increased that significantly in our announcement of a further £15 million on Friday. This means that the UK is already supplying more than 10% of the immediate assistance that the Pakistan Government and the United Nations have called for, and a further appeal by the Disasters Emergency Committee was launched on Friday.
Mark Eastwood (Dewsbury) (Con)
Following on from the point that the hon. Member for Ilford South (Sam Tarry) made about flooding, as the Prime Minister’s trade envoy to Pakistan—
Mr Speaker
Order. Although flooding matters, this question really is about terrorism. I know that we will have other questions on that, when I think Members will wish to catch my eye.
Mark Eastwood
I welcome the aid offered by the Government following last week’s tragic events—
Lee Anderson (Ashfield) (Con)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Vicky Ford)
Putin is using food and fuel as weapons of war. The UK has helped to facilitate the release of Ukrainian grain through technical advice, military assistance and practical equipment, as well as diplomatic efforts led by the Foreign Secretary, which I am sure she will continue as Prime Minister. We are supporting the vulnerable globally, both directly and through our influence in multilateral institutions, particularly in the Horn of Africa, where droughts are driving humanitarian catastrophe. We are also investing in research, development and innovation, as well as sustainable agriculture, which is boosting crop yields and improving food production in many vulnerable countries.
Lee Anderson
Now then, we have a chap in Ashfield whose name is Wade, who runs the only independent cheese counter in Ashfield. He tells me that Putin’s war in Ukraine is increasing food prices all over the country and affecting his prices so that he cannot keep the prices down. Does the Minister agree that instead of blaming the Government for food prices increasing, the Labour party should get behind us and help us get that grain out of Ukraine to reduce the price in the UK and the rest of the world?
Vicky Ford
My hon. Friend is spot on. It is Putin’s war that is driving up food prices right across the world, and this UK Government have been rolling up our sleeves to help, especially on getting the grain out of Ukraine. We have put in military assistance and practical equipment, for example to mend the railroads, and technical advice. There has been a massive diplomatic effort, which I know our new Prime Minister will continue. Some 90 ships of grain have left Ukraine since 1 August, and more is needed; 3 million tonnes are estimated to have been moved by land routes last month, which is 10 times as much as was moved last March. The grain is coming out, and the UK will continue in our work to support those food-vulnerable people across the world.
Mr Speaker
I call Sarah Champion, Chair of the International Development Committee.
Sarah Champion (Rotherham) (Lab)
The recent floods in Pakistan are devastating millions and having a severe impact on their food security, especially for women and girls. My Committee’s recent report found that, internationally, 50 million people in 45 countries are on the edge of famine. Climate change, fertiliser costs and conflict all pose a serious threat to food production and distribution globally. I welcome the Government’s reallocation of the £15 million of existing aid to Pakistan, but how will that contribute to the long-term food insecurity it faces, and what programmes were cut as a consequence?
Vicky Ford
The Government are very focused on the food vulnerable across the world. For example, we committed an extra £130 million to the World Food Programme, which was announced at the Commonwealth Heads of Government meeting earlier in the summer. We are also a major investor in research and development, especially in sustainable agriculture. The “Room to Run” guarantee, for example, which I signed with the African Development Bank earlier this year, will enable it to raise up to $2 billion, which it is investing in improving agricultural systems, including more advanced seed, across the continent of Africa. That is how we are helping to boost food production in those very vulnerable countries, as well as supporting humanitarian needs.
Mr Speaker
I call the Chair of the Foreign Affairs Committee, Tom Tugendhat.
Tom Tugendhat (Tonbridge and Malling) (Con)
I pay enormous tribute to the United Nations Secretary-General and all those who have been working on opening up the ports in southern Ukraine, and to the British Government for the work they have been doing alongside the Turkish Government to ensure that those shipments have flown. However, what work is the Minister doing with sub-Saharan Africa? Many of the countries we are talking about—not just Pakistan, which the hon. Member for Rotherham (Sarah Champion) rightly named, but many other countries in sub-Saharan Africa—are suffering very severely from the rise in food prices. The World Food Programme has done an enormous amount to make sure that food gets out there, and I pay tribute to its Nobel prize-winning efforts, but Her Majesty’s Government can do more too.
Vicky Ford
As ever, my hon. Friend is absolutely correct, and I thank him for raising the situation in sub-Saharan Africa. The ship that arrived in Djibouti last week with grain from Ukraine going to Ethiopia was welcome, but the situation in east Africa in particular is catastrophic, affecting more than 40 million people. We are a major donor to east Africa: we are expecting to spend £156 million this year, and we have already spent half of that. That money is going into the most urgent priorities, providing food, water, shelter and medicines for millions of people, but we are also leading efforts to bring in other donors, such as the $400 million that we helped to raise through the UN, and pushing the World Bank and others to do more too.
David Linden (Glasgow East) (SNP)
Many people in Malawi experience nutritional deficiencies, such as insufficient protein. Indeed, 37% of children there experience stunting. What further action will the Government take to support nutritional programmes in Malawi?
Vicky Ford
I visited Malawi earlier this year. We are a major donor to the country. There has been some fantastic work on the polio situation there, with more than 3 million children—all those in the target population—having been vaccinated. It is a very fragile country, which we continue to support closely.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
Earlier this summer, it was reported that the Treasury had blocked aid payments for the duration of the summer while the Conservative leadership contest ran. I immediately wrote to the Chancellor and Foreign Secretary, asking what that would mean for the world’s poorest and most vulnerable, and requesting an urgent response; 42 days later, I have heard nothing back. This at a time when someone reportedly dies every 48 seconds in the horn of Africa hunger crisis. By my estimation, that means that more than 75,000 may have died. Last night the World Food Programme issued a stark warning, saying that famine is “imminent” and Somalia has run out of time. Can I please finally get some answers today, and seek the Minister’s reassurance that the new Foreign Secretary will stop the block on aid payments as an urgent priority?
Vicky Ford
The UK remains one of the largest donors of official development assistance in the world. In Somalia in particular, the situation is tragic. We have been leading the way with our aid and to bring in other donors. The hon. Member knows that I announced further advancements of funding into Somalia from the UK just last week. We continue to prioritise Somalia, but it is important that we bring in other donors, which is why we have worked with the World Bank, encouraging it to accelerate the $30 billion that it is sending out across the world into the horn of Africa, which it is now doing.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Vicky Ford)
The UK has one of the strongest systems for combating international illicit finance—a system that, since Russia’s invasion of Ukraine, we have further strengthened under this Government through the Economic Crime (Transparency and Enforcement) Act 2022. Through the Russian elites, proxies and oligarchs taskforce, we work closely with international partners to ensure that there is nowhere for dirty money to hide overseas. For more detail on our approach to illicit finance, I refer the hon. Gentleman, who seems to be looking at his phone, to the Government’s response to the Foreign Affairs Committee’s recent report, which will be published shortly.
Mr Speaker
I think the Minister is referring to a different Member. [Interruption.]
Gavin Newlands
I accept the Minister’s apology.
It should be a source of national shame that it took a full-scale invasion of Ukraine for the Government to take our illicit finance problem seriously. Of course we welcome the sanctions against the Kremlin, but they do not address the UK’s serious and entrenched illicit finance problem. Will the Minister advise the new Foreign Secretary and Chancellor, whoever they may be—although it has been pretty well leaked—to establish an independent anti-illicit finance commissioner, who is tasked with strengthening the UK’s financial infrastructure in the interests of national security, to whom the Government are accountable?
Vicky Ford
I find it slightly difficult to accept the premise of the hon. Gentleman’s question, because the Financial Action Task Force’s previous review, which looked at 60 different countries, found that the UK had one of the strongest systems for combating money laundering in the world. We have introduced the Economic Crime Act, and will take further action through corporate transparency reform and the introduction of the economic crime levy. We are working in partnership with many countries across the world to tackle illicit finance, to hold those who have been part of this terrible crime to account and to restore the money.
Simon Fell (Barrow and Furness) (Con)
The Minister for Asia and the Middle East (Amanda Milling)
Cabinet Ministers regularly meet their US and Australian counterparts to progress our landmark AUKUS partnership, including recently in the margins of the G20 and Commonwealth Heads of Government meeting, and in outbound and inbound ministerial visits. Last month, I visited Australia and met Assistant Foreign Minister Watts, who reaffirmed Australia’s full support for AUKUS.
Simon Fell
I thank my right hon. Friend for her response. I was pleased last week to welcome to Barrow the Prime Minister and the Defence Secretary, alongside the Australian Deputy Prime Minister, for the commissioning of HMS Anson, in an important sign of the strength of our AUKUS partnership. Does my right hon. Friend agree that the future requires much more close working between like-minded countries to counter authoritarian regimes, not just in the physical domain but in cyber-security and intelligence sharing too?
Amanda Milling
I completely agree. The Government have been clear that we must build a network of like-minded countries and flexible groupings if we are to protect our interests globally. I was really pleased when last week the Defence Secretary hosted Australian Deputy Prime Minister Marles at the commissioning ceremony for HMS Anson in my hon. Friend’s constituency, demonstrating our deep defence ties, including through AUKUS.
Jim Shannon (Strangford) (DUP)
The Minister’s response makes clear the importance of all of us in the United Kingdom of Great Britain and Northern Ireland working together, and we in Northern Ireland want to be part of that, contributing soldiers, sailors and airmen. Can the Minister give some indication of whether our soldiers, be it the Irish Guards or the Royal Irish Regiment, will be part of this new security policy?
Amanda Milling
I am grateful to the hon. Gentleman for making sure that Northern Ireland has a voice in this. I am sure that my colleagues in the FCDO and the MOD have heard his pitch.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Rehman Chishti)
UK sanctions are aimed at undermining Putin’s war effort, inflicting cost at scale, and demonstrating strong support for Ukraine. Our response is in lock-step with allies and has inflicted a significant economic cost to the Russian economy. The IMF predicts that by 2026 the Russian economy will be 16% smaller compared with pre-invasion trends.
John Lamont
I know the sanctions have strong support across the House and in communities in the United Kingdom, but will the Government consider going further to ensure that additional pain is inflicted on President Putin and his cronies?
Rehman Chishti
I thank my hon. Friend and parliamentarians in all parts of the House for the united approach we have taken in applying maximum pressure on Putin for his aggression in Ukraine. We will continue to put pressure on Putin and his regime until Ukraine prevails, or Putin ends his war of choice. Nothing and no one is off the table. Although it is not appropriate to speculate on specific future designations, lest their impact is reduced, Russian aggression cannot and must not be appeased.
Chris Bryant (Rhondda) (Lab)
One of the people sanctioned in the UK is Roman Abramovich. His football club, Chelsea, was sold on 30 May, but the billions of pounds are sitting in his bank account because the Foreign Office still has not set up the fund to enable the money to be given to the people of Ukraine. Why is the Foreign Office taking so long, and when is it going to be sorted?
Rehman Chishti
Although I cannot comment on specific cases, I point out that measures have been taken against 1,100 individuals, including 123 oligarchs and their family members with a global net worth of £130 billion, more than 120 entities and all the subsidiaries owned by them; and against 19 Russian banks with global assets of about £940 billion—more than 80% of the Russian banking sector. In addition, acting in conjunction with partners, over 60% of Russia’s central bank’s foreign reserves have been frozen. That demonstrates our commitment to do everything we can, applying our criteria set by this Parliament, to bring these people to account.
Helen Hayes (Dulwich and West Norwood) (Lab)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Vicky Ford)
The catastrophic floods in Pakistan and appalling droughts across the horn of Africa are just two examples of where a destabilising climate is threatening the lives and livelihoods of tens of millions of people. In this context, the COP26 President, my right hon. Friend the Member for Reading West (Alok Sharma), Whitehall teams and our diplomatic network are working with Egypt as COP27 host, and with partners across the global south, to accelerate global climate action ahead of COP27.
Helen Hayes
The Minister references the deadly drought in the horn of Africa and the catastrophic floods in Pakistan, which clearly show the reality and urgency of the climate emergency. Last November, at COP26, developing countries across the global south were promised further discussions on loss and damage climate compensation. In the context that she has described this morning, why was the UK backtracking on the promises made at COP26 in the Bonn talks this summer? What message does she think that failure of leadership sends to our allies and partners in the global south?
Vicky Ford
At COP26 in Glasgow, we led a global commitment that kept 1.5° alive, and it is vital that countries across the world hold up the promises that they made there. We in the UK, and Ministers from across this Government, always raise climate change on every single diplomatic visit. I do not accept the premise that we are backtracking: just before recess, I went to South Africa to work on the just energy transition partnership, which is the landmark deal for the entire world in helping developing countries. We are leading that work and we are focused on that as a priority. As regards the work on the $100 billion delivery partner, our friends in Germany and Canada are also helping to lead that work, including on how to scale up on adaptation. It is a priority and we will continue to lead.
Mr David Lammy (Tottenham) (Lab)
As has been said, the appalling floods in Pakistan, which have affected more than 30 million people, show that the climate crisis is not a future problem—it is here and it is now. Despite the Minister’s bluster a moment ago, it is incredibly concerning that the new Conservative Prime Minister has said that she will impose a temporary moratorium on the green levies that we need to reach net zero. Will the Minister commit to doubling our commitments to net zero, so that the UK can lead from the front to build a green and secure future?
Vicky Ford
We have doubled our commitment to climate to £11.6 billion. That is helping people across the world to access clean energy, to reduce deforestation, to protect oceans and to build clean infrastructure. As the right hon. Gentleman is aware, when the new Prime Minister comes in, she will be announcing plans to help to tackle the issues with food prices and fuel prices in this country as a top priority, and also to look at the long-term needs of our energy security. He will need to wait, with the rest of us, for those announcements—but she has promised them as a top priority.
Chris Law (Dundee West) (SNP)
According to the UN Secretary General, people are 15 times more likely to die if they live in a climate crisis hotspot, which is what we see unfolding right now in Pakistan, with more than 6 million people in dire need of humanitarian aid and already more than 1,000 people dead. Last year, at COP26 in Glasgow, Scotland became the first developed economy in the world, led by our First Minister, to pledge dedicated loss and damage funding. Ahead of COP27, will the UK Government finally commit to establishing a similar loss and damage policy in line with the 2015 Paris climate accord?
Vicky Ford
We are working with countries across the world to ensure that everybody holds up the promises that they made at COP26. We understand the challenges that many countries are facing, including the terrible situation in Pakistan, where we have already donated more than 10% of what the UN and Pakistan have asked for to meet their emergency need. I think, however, that the hon. Gentleman should focus on the work that the COP26 President, my right hon. Friend the Member for Reading West (Alok Sharma), has been doing with more than 50 missions working across the world to ensure that we get action before the next COP in Egypt.
James Gray (North Wiltshire) (Con)
Central to our battle against climate change must be our relations with the Arctic countries and the Arctic circle in general. I understand that the Foreign Office Arctic policy update document is ready to be published. Can the Minister update the House about when that document will be published and perhaps even about what might be in it?
Vicky Ford
My hon. Friend is a true supporter of the Arctic region. Several of the Arctic states have published new Arctic strategies. My right hon. Friend the Minister for Asia and the Middle East, who is the Minister responsible, was able on her visit to the region very recently to talk about the UK’s intention to publish a UK Arctic policy. We are looking forward to publishing a refreshed UK Arctic policy later this year. That will be an evolution of the existing framework, which is called “Beyond the Ice”.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Peter Dowd (Bootle) (Lab)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Rehman Chishti)
The integrated review of foreign policy, defence and security sets out the Government’s vision for global Britain. We are delivering this though our diplomatic, economic, development and security partnerships, prioritising Euro-Atlantic security and the Indo-Pacific tilt. We have become an Association of Southeast Asian Nations dialogue partner, and we have provided £2.3 billion-worth of military support to Ukraine, published a new international development strategy and agreed the AUKUS deal.
The United Kingdom state pension is payable worldwide and uprated where there is a legal requirement to do so. This has been the policy of successive Governments for over 70 years.
Mr Sheerman
Do these Ministers actually understand? Do they read the world’s media? Do they not understand that we are alienated and isolated from all our traditional allies in Europe and from the United States? Do any of them think that the new Prime Minister’s comments about France and President Macron helped anyone?
Rehman Chishti
On what the hon. Member says about alienating the world, we should look at what really happened in practice. The United Kingdom led the world on stepping up and supporting the people of Ukraine. Whether militarily, economically, diplomatically or on a humanitarian basis, we have stepped up to the plate at every level in that regard. Whether with COP26, the summit on freedom of religion or belief, or the summit coming up on the preventing sexual violence initiative, the United Kingdom is leading the world and standing up for our values of democracy, liberty and open societies.
Peter Dowd
The job interviews have taken a long time today.
I cannot believe I am actually having to ask this question, but over the summer thousands of UK pensioners living in Canada had their pensions stopped as a result of proof of life forms not being sent to them and therefore not being able to be returned, pushing many of them into debt and having to borrow for basic bills. To reinstate their pension, they have had to phone an international number, with calls lasting up to an hour. What does it say about global Britain if we cannot even pay our pensioners living abroad? What support can the Department and the British high commission give to pensioners in Canada to ensure that their pensions are reinstated as quickly as possible, and can the Minister confirm that this issue—this debacle—has yet been sorted out with the Department for Work and Pensions?
Rehman Chishti
I thank the hon. Member for that question. I know he has had a written response from the Secretary of State for Work and Pensions, who leads on this matter, and had a conversation with a Minister at the DWP.
Let me answer specifically about pensions in Canada. I was recently in Canada, and this pensions matter was raised with me by my parliamentary counterpart in Canada, so let me answer that point specifically for the hon. Member. State pensions are uprated where there is a legal requirement to do so. The United Kingdom and Canada have two arrangements concerning social security, neither of which includes state pension uprating. The Government continue to take the view that priority should be given to those living within the United Kingdom when drawing up expenditure plans for additional pensioner benefits. That has been the position of successive Governments for the past 70 years.
Fiona Bruce (Congleton) (Con)
Implementing the Truro review is a manifesto commitment. The recent independent review on progress, which the Foreign Secretary has fully accepted, has confirmed that there is still much to do to implement Truro in full; will the Minister meet me to discuss taking this forward?
Rehman Chishti
I will be delighted to do that—and, as a previous envoy, I appreciate my hon. Friend’s brilliant work.
Richard Burgon (Leeds East) (Lab)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Vicky Ford)
International observers will monitor Brazil’s elections in October, including from the Organisation of American States. They are experienced and well regarded. The independence of Brazil’s supreme electoral court is recognised internationally and its electronic voting machines have been widely recognised for speed, efficiency and security, but, as in many elections around the world, there are concerns about how disinformation online can threaten the integrity of the democratic process so we welcome the supreme electoral court of Brazil’s efforts to call out disinformation online ahead of the elections.
Richard Burgon
On the importance of defending democracy, I want to express, as I am sure many others do, my best wishes to the Argentinian Vice-President Cristina Fernández de Kirchner, on whom there was an horrific assassination attempt last week.
I thank the Minister for her answer. The election in Brazil is the biggest election in the world this year and it is important that it takes place in free and fair conditions. Sadly, in recent months there has been targeted violence from supporters of President Bolsonaro against members of the main opposition party, including fatal shootings. Will the Government make a public statement ahead of next month’s vote that political violence and threats of coups have no place in this election?
Vicky Ford
I was also shocked by the assassination attempt on Vice-President Kirchner in Argentina. I am very relieved that she was not hurt and we strongly condemn hate and violence and stand firmly with Argentina in support of democracy and the rule of law.
On Brazil, democracy is under threat in many parts of the world and it is very important that Brazil continues to set an example to others on free and fair elections. Tomorrow, 7 September, Brazil celebrates the 200th anniversary of its independence and I congratulate the people of Brazil on that important milestone, but I also want to say that we all hope those celebrations are joyous and peaceful, because peace in elections is vital.
Fabian Hamilton (Leeds North East) (Lab)
Opposition Members join the Government in congratulating the Republic of Brazil on its 200th anniversary.
Reports that the Bolsonaro Government are attempting to reduce the number of official observers for the forthcoming presidential elections are extremely worrying. Given that the Foreign Secretary, who is shortly to become Prime Minister, has spent so much time cosying up to President Bolsonaro, rather than challenging on the destruction of the Amazon rainforest and the attack on fundamental human rights in Brazil, will the Minister use her diplomatic pressure to help ensure these elections are able to be independently observed, with all sides respecting the outcome and result afterwards?
Vicky Ford
I absolutely agree with the hon. Gentleman on the importance of free and fair elections, and I say again that it is very important that Brazil demonstrates to other countries across the world that it continues to support free and fair elections, and obviously election observers have an important role to play. I have had the opportunity to meet representatives of Brazil’s current Government and the Brazilian Workers’ party; I have discussed with them a broad range of issues, including the importance of free and fair elections. We also continue to be focused on the issue of the Amazon; indeed my right hon. Friend the Member for Reading West (Alok Sharma) the COP26 President, visited Brazil earlier this year on precisely that issue, and we—
Theresa Villiers (Chipping Barnet) (Con)
The Minister for Europe (Graham Stuart)
I pay tribute to my right hon. Friend; she is a great champion for the reunification of Cyprus. We are determined to find a negotiated settlement for the island, which is why I met Cypriot Foreign Minister Kasoulides in my first week in office to set out the UK’s commitment to finding a just and lasting settlement.
Theresa Villiers
Will the Minister condemn the actions of the Turkish authorities in reopening parts of the beachfront town of Famagusta as this is causing great distress to the Greek Cypriots who were driven from those homes 48 years ago and have never been able to return? Such provocative actions make it harder to achieve a negotiated settlement.
Graham Stuart
My hon. Friend is absolutely right. The fact that the suburb of Varosha within Famagusta is being fenced off underlines the importance of reaching a comprehensive Cyprus settlement. The UK strongly opposes any destabilising actions. We support the UN Security Council resolutions covering Varosha, the latest of which calls for the immediate reversal of the Turkish course of action and of all steps taken on Varosha since October 2020.
Alex Cunningham (Stockton North) (Lab)
The Minister for Asia and the Middle East (Amanda Milling)
We have been clear about our concern over the Israeli Government’s decision in October 2021 to designate six Palestinian non-governmental organisations as terrorist organisations, and the subsequent raids on seven NGOs. We continue to engage with a number of these organisations and have raised the issue with the Israeli authorities, including, most recently, through our ambassador to Israel.
Alex Cunningham
I am grateful to the Minister for her comments. What assessment has she made of the impact of the listing and raids of Palestinian civic society and human rights groups on the prospect of that much-wanted and much-needed two-state solution and an enduring peace for Palestinians and Israelis?
Amanda Milling
Civil society organisations play a really important role in upholding human rights and democracy. They must be able to operate freely in the Occupied Palestinian Territories. During my recent visit to Israel and the OPTs in June, I met human rights defenders, journalists and civil society organisations to discuss the pressures that they face in the region. I emphasise the UK’s strong support for freedom of speech and media freedom.
Bambos Charalambous (Enfield, Southgate) (Lab)
Last October, Israel designated six Palestinian civil society groups as terrorist organisations, which has caused widespread concern. Accusations of terrorism must be treated with the utmost seriousness and must be grounded in evidence. As The Guardian reported in August, the CIA, which is known to be assiduous in these matters, said that no evidence had been presented to support the designation. Will the Minister press her Israeli counterpart for that evidence and, in the absence of such evidence, continue to support the Palestinian civil society that is so important to democracy and the goal of a two-state solution?
Amanda Milling
I agree with the hon. Gentleman, as I just said, on the importance of civil society and the role it plays in terms of human rights and democracy. The evidence that forms the basis of the designations is a matter for the Government of Israel. The UK maintains its own criteria for designation, and we continue to engage with many of those organisations. As I said, we have been clear about our concerns.
Robert Halfon (Harlow) (Con)
With Iran stepping up its terrorist activities in the middle east, supporting terrorist organisations carrying out attacks against Israel and developing its nuclear capacity, what plans does my right hon. Friend have to introduce sanctions against Iran and take up further punitive measures?
Amanda Milling
I am grateful to my right hon. Friend for his question. I am afraid that I will not be able to talk about future sanction designations on the Floor of the House as that would undermine their role.
Paul Blomfield (Sheffield Central) (Lab)
Afzal Khan (Manchester, Gorton) (Lab)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Vicky Ford)
I know that the whole House will want to join me in sending our deepest condolences to the people of Pakistan as they suffer the consequences of this devastating flooding. We in the UK stand shoulder to shoulder with our Pakistani friends and will continue to provide support as they respond to and recover from this disaster. We were one of the first countries to announce funding to respond to the humanitarian need, and we have now increased that to £16.5 million to support the flood relief efforts. The UK contribution is now 10% of the joint UN and Government of Pakistan emergency appeal.
Paul Blomfield
The Minister is certainly right about expressing the feelings of the whole House, but she will recognise that, in April, the International Development Committee reported that UK aid to Pakistan had been “reduced dramatically” after the Government’s overall reduction from 0.7% to 0.5% and has been cut by much more than we are now offering. Reports today suggest that a tragedy of already massive proportions appears to be worsening as attempts to stop Manchar lake overflowing have failed. What more will the Government do to help? Will she tell her new leader that tragic events such as this underline the need to prioritise action on climate change, not marginalise it?
Vicky Ford
We are one of the largest donors of international aid in the world and we focus on prioritising those most in need. As I said, we have already contributed over 10% of the joint UN-Government of Pakistan emergency appeal. We work with countries all across the world not only on immediate needs but on long-term strategy. The longer-term consequences of this terrible tragedy will become clear, but the World Bank, of which we are one of the largest shareholders, is already looking at a long-term needs assessment to help Pakistan to recover.
Afzal Khan
The recent flooding in Pakistan has plunged the country into a humanitarian and climate emergency, leaving a third of the country under water, huge loss of life and an estimated $10 billion-worth of damage. I hope the Minister will join me in applauding the diaspora community and non-governmental organisations that have already raised over £15 million to help the victims of this monster monsoon. I ask three things of the Government. First, will they urge the International Monetary Fund to review the conditionality attached to the loans given to Pakistan? Secondly, will they reverse the 75% cut to UK aid for environmental protection programmes in Pakistan? Thirdly, what further help will they provide to rebuild infrastructure in Pakistan?
Vicky Ford
I absolutely join the hon. Gentleman in praising and thanking the British people, especially the Pakistani diaspora across the UK, for the efforts they have made to support their friends and family, and those most in need in Pakistan. We worked with the Disasters Emergency Committee to get its appeal launched at the end of the last week. The UK Government are match funding the first £5 million, but I am really pleased to have heard this morning that the appeal has already raised over £11 million from public donations. That is a huge, huge effort. My hon. Friend the noble Lord Ahmad, who covers Pakistan as part of his brief, is in daily contact with Ministers, officials and those on the ground, as well as our own diplomatic team, to ensure we focus on helping with the immediate need. I hear him about the longer-term solutions. We are involved in those discussions as well.
Mr Robin Walker (Worcester) (Con)
I welcome my hon. Friend’s comments about the diaspora and the additional £15 million. In Worcester, our mosque raised £87,000 to support Pakistan after floods in 2010 and once again it is going out of its way to raise money. What more can the Government do to amplify and magnify the contribution from British Pakistani communities?
Vicky Ford
May I thank the members of my hon. Friend’s mosque in Worcester? Members of my mosque in Chelmsford have been engaged in similar activities. I encourage those who are concerned about the flooding to continue to support the DEC appeal. The response over the past few days has been absolutely outstanding. Supporting through the DEC appeal, which has match funding from the UK Government, will ensure that water, food and other emergency needs get to where they are needed most.
Mark Eastwood (Dewsbury) (Con)
As trade envoy to Pakistan, I am pleased that the Government have offered aid support to the country following last week’s tragic events. Will the Minister outline what action is being taken right now to assist the flood relief effort in Pakistan and whether there is likely to be any further welcome support in future? Will she also join me in thanking the people of Dewsbury, who have rallied around in huge numbers to support the humanitarian effort?
Vicky Ford
I absolutely join my hon. Friend in thanking the people of Dewsbury, and I thank him for his work as trade envoy in championing Pakistan. The money we are giving and the money being raised through the DEC appeal is going to people’s immediate needs: water, sanitation, shelter, protection for women and girls, and supporting people to repair their homes and maintain their livelihoods. That is why giving through the DEC appeal is the best way to get to those immediate needs. As I said, the World Bank is already looking at a needs assessment for the longer term.
Catherine West (Hornsey and Wood Green) (Lab)
Catastrophic scenes of flooding in Pakistan: 1,000 lost lives, 33 million people displaced and a third of the country under water. As we have heard today, the whole House has expressed its solidarity with the community, both there and here. In advance of COP27, will the Minister undertake to produce an urgent bilateral plan with Pakistan that looks at mitigation, loss and damage, and long-term plans to avoid this sort of climate catastrophe in future?
Vicky Ford
The flooding absolutely demonstrates how climate change is making extreme weather events more intense and more frequent. It underlines why the UK has committed to doubling the amount of climate finance that we give to support adaptation to the impacts of climate change and why the world must transition to clean energy sources as quickly as possible. That work is being led by the UK, through the COP26 President, in his endeavours to get support all across the world to tackle climate change.
Several hon. Members rose—
Steve McCabe (Birmingham, Selly Oak) (Lab)
The Minister for Asia and the Middle East (Amanda Milling)
I will try to keep this brief, Mr Speaker.
Since our last oral questions, we have continued to stand up against Russian aggression. We have provided Ukraine with further political, military and humanitarian support. We established a sanctions directorate in the FCDO, doubling the number of staff we have working, to ratchet up the economic pressure on Putin’s regime. As we heard, we have committed to a £15 million package of support for Pakistan following the devastating floods that have hit the country. In addition, I co-chaired the UK-ASEAN ministerial meeting as an official dialogue partner, where we agreed a joint plan of action for the next five years.
Steve McCabe
Further to the comments from the right hon. Member for Harlow (Robert Halfon), it is two years since the introduction of the Magnitsky legislation, which was designed to deal with designated persons guilty of human rights violations and other serious offences. Given the continuing abuses in Iran, why has that not been used against a single prison governor, Islamic Revolutionary Guard Corps commander or senior member of the regime, and when will that be remedied?
Amanda Milling
I am afraid that I cannot speculate about future sanction designations, but as I said in answer to an earlier question, we maintain a range of sanctions that work to constrain the destabilising activity of the IRGC.
Tom Randall (Gedling) (Con)
Amanda Milling
The Solomon Islands Government are reviewing the protocols for receiving naval vessels into their waters. We hope that the review will be completed shortly, delivering a smooth and swift approval process. Last month, I visited Vanuatu and attended the Pacific Islands Forum. As a long-standing partner and friend, the UK is working to support peace and prosperity for the people of the Solomon Islands and across the Pacific.
Jessica Morden (Newport East) (Lab)
Amanda Milling
We strongly condemn the detention of the Baha’i community in Iran as well as the reports of forced closures of its businesses and land seizures. The persecution of religious minorities cannot be tolerated. I confirm that my colleague, the noble Lord Ahmad, issued a statement calling out Iran’s treatment of the Baha’i community.
Mr David Davis (Haltemprice and Howden) (Con)
The Minister for Europe (Graham Stuart)
We must support Ukraine’s vision for rebuilding a sovereign, prosperous, democratic nation that is stronger than it was before Putin’s invasion. Significant support will be required. That is why, in early July, the Foreign Secretary presented our vision to support the Ukraine-led effort for recovery and reconstruction at the Ukraine recovery conference in Lugano. We will host that conference next year because we must not only support the Ukrainians now, but look ahead to a better future.
Several hon. Members rose—
Mr Speaker
Order. I am going to pull stumps. People will be upset and quite angry, but I want Front Benchers and everybody who has been asking questions to think about how long their answers are and how long they are taking to ask their questions. Please, let us get it right next time.
Sewage Pollution
(2 years, 3 months ago)
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Caroline Lucas (Brighton, Pavilion) (Green)
(Urgent Question): To ask the Secretary of State for Environment, Food and Rural Affairs if he will make a statement on sewage outflows into our beautiful waterways and on our beaches.
The Secretary of State for Environment, Food and Rural Affairs (George Eustice)
As a Cornish MP, I have long been aware of the challenges created for our aquatic environment by storm overflows. When I became Secretary of State in February 2020, I instructed officials to change the strategic policy statement for Ofwat to give the issue greater priority.
This is the first Government to set a clear requirement for water companies to reduce the harm caused by sewage discharges: we have set that in law through the Environment Act 2021. We are taking action now on a scale never seen before. Water companies are investing £3.1 billion now to deliver 800 storm overflow improvements across England by 2025. This will deliver an average 25% reduction in discharges by 2025.
We have also increased monitoring. In 2016, only 5% of storm overflows were monitored. Following the action of this Government, almost 90% are now monitored, and by next year 100% of all storm overflows will be required to have monitors fitted. This new information has allowed our regulators to take action against water companies. The Environment Agency and Ofwat have launched the largest criminal and civil investigations into water companies ever, at more than 2,200 treatment works, following the improvements that we have made to monitoring data. That follows 54 prosecutions against water companies since 2015, securing fines of nearly £140 million.
Water companies should consider themselves on notice. We will not let them get away with illegal activity. Where permits are breached, we are taking action and bringing prosecutions. Under our landmark Environment Act, we have also made it a legal requirement for companies to provide discharge data to the Environment Agency and make it available to the public in near real time: within an hour. This is what Conservative Members have voted for: an Environment Act that will clean up our rivers and restore our water environment; that has increased monitoring and strengthened accountability; and that adds tough new duties to tackle sewage overflows for the first time.
The Government have also been clear that companies cannot profit from environmental damage, so we have provided new powers to Ofwat under the Environment Act to modify water company licence conditions. Ofwat is currently consulting on proposals that will enable it to take enforcement action against companies that do not link dividend payments to their environmental performance or that are failing to be transparent about their dividend payouts.
Yesterday, I laid before Parliament the storm overflows discharge reduction plan. The plan will start the largest investment in infrastructure ever undertaken by the water industry: an estimated £56 billion of capital investment over the next 25 years. It sets strict new targets for water companies to reduce sewage discharges. Designated bathing waters will be the first sites to see change. By 2035, water companies must ensure that overflows affecting designated bathing waters meet strict standards to protect public health. We will also see significant reductions in discharges at 75% of high-priority sites.
Water is one of our most precious commodities. Water companies must clean up their act and bring these harmful discharges to an end. I commend our storm overflow report, which was published yesterday, to the House.
Caroline Lucas
I thank the Secretary of State for his response, but I am utterly staggered by his complacency. Following the news over the summer that raw sewage was being pumped into our waterways and along our beautiful beaches, I have received so many messages from constituents who are horrified that water companies are polluting in such a revolting way. Does the Secretary of State recognise that, after 12 years, people rightly hold his Government responsible for this risk to human and environmental health, and for allowing the twin failures of weak regulation and Government cuts, together with the continuation of a privatisation process that has lined the pockets of shareholders at the expense of investment in the infrastructure that we so desperately need?
Where is the urgency from Ministers? We have a so-called plan that allows water companies to continue polluting until 2035 in areas of significant importance to human and ecological health and until 2050 elsewhere, which means sanctioning nearly 30 more years of pollution. Is that genuinely what the Secretary of State considers to be an urgent response? Will he strengthen it to a 90% reduction in storm overflows by 2030 at the latest? Worse still, it was previously illegal for water companies to discharge sewage when there was no heavy rainfall, but under the Government’s new plan, that is now permitted until 2050. Why are this Government going backwards?
Our soon-to-be Prime Minister has claimed that she will “deliver, deliver, deliver”, but all that she did deliver when she was Environment Secretary were devastating cuts to the Environment Agency. Has the Secretary of State asked whether she regrets those cuts, and will the Government reverse them? Is the Secretary of State proud of a situation in which 24% of sewage overflow pipes at popular resorts have monitors that are faulty, or do not have monitors at all? Since privatisation in 1991, water companies have made a staggering £50 billion in dividends for their shareholders. Why does the Secretary of State’s plan include imposing costs on customers to pay for improvements—a bill that the companies themselves should be footing?
Coastal communities are still recovering from the pandemic. Local beaches are at the heart of these communities, and they are critical to our constituents’ wellbeing as well as to local economies. However, one local firm in Brighton told me that on the August bank holiday weekend, when it would normally see a 30% increase in business, it saw a 70% decrease. What compensation will there be for such businesses?
Will the Secretary of State now cut the crap, commit himself to strengthening the Government’s plan, and bring our failing system back into public hands, which is where it belongs?
Mr Speaker
Order. Let me just say that that was a good joke, but it is not what we want to start this term with. Come on—let us have the Secretary of State.
George Eustice
The hon. Lady delivered her comments with characteristic passion, but she was wrong to say that the Government had not prioritised this issue. Had she listened to my response to the urgent question, she would have heard that when I became Secretary of State this was one of the first things that I prioritised in changing the strategic policy statement.
The hon. Lady would like immediate action to be taken on these matters, but the truth is that long-term infrastructure changes and investments are necessary. We have to take decisions now, and invest in the infrastructure and the capacity to prevent such discharges from happening. Were we to do what the hon. Lady would like, which is to stop using these arrangements immediately, sewage would literally back up into people’s homes, and I am not sure that that is something they would thank us for. We must therefore have a programme of investment, and we are the first Government to set this out. The hon. Lady is correct in saying that down the decades, since the Victorian era, Governments of all colours have failed to give this matter adequate priority. Ours is the first Government in history to do so, and that is what our plan sets out.
The hon. Lady made a point about costs. We are mindful of this. As we roll out our programme, we must prioritise the most harmful discharges in the near term, and that is exactly what we are doing. We are taking action right now, with a £3 billion investment that will reduce discharges by 25% by 2025, and we will then prioritise bathing waters and other priority sites with a target of 2035. Those measures will require that infrastructure investment, and will require some funding. As I said in my initial response, we are doing this in a way that will ensure that it is funded fairly and that companies cannot award dividends unless they are performing properly. Let me also point out that Ofwat regularly tries to drive greater value from water companies, to the extent that last year a number of them appealed to the Competition and Markets Authority to say that Ofwat was being too hard on them.
I disagree with the points that the hon. Lady has made. Ours is the first Government to prioritise this issue, but doing so requires us to make decisions now that will bring about long-term improvements, and that is what we have decided to do.
Mr Speaker
We now come to the Father of the House, Sir Peter Bottomley.
Sir Peter Bottomley (Worthing West) (Con)
Those of us who have been around for a long time do not believe that nationalised industries would allow the necessary level of investment to be continued. Can I ask the Secretary of State whether the companies, the regulator and the Environment Agency knew the scale of the discharges?
George Eustice
My hon. Friend raises an important issue, and it was only when this Government required increased monitoring that we discovered the scale of the problem. The reality is that this has been a problem for some time, but successive Governments down the decades have not had the right monitoring in place to recognise it. As soon as we recognised this, the Environment Agency started to bring record numbers of prosecutions against companies that appear to have been breaching their permit requirements. We are not sure whether that was an error that those companies were making, and that they did not realise they were making some of those discharges, or whether it was deliberate. There is a moot point about why the Environment Agency did not detect this earlier, and that is now the subject of an investigation by the Office for Environmental Protection, which was set up under our Environment Act 2021.
Mr Speaker
We now come to the shadow Secretary of State, Jim McMahon.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
The scenes over the summer have shown us again that the country is awash with Conservative-approved filthy raw sewage. Over the last six years, there have been over 1 million sewage discharge spill events, which on average means a spill taking place every 2.5 minutes. Just in the time that we will be in this Chamber for this urgent question, 18 sewage discharges will take place. The water companies are laughing all the way to the bank and the Government are complicit in treating our country like an open sewer, allowing raw human waste to be dumped on our beaches and playing fields and into our streams and bathing waters, where families live and holiday and where their children play.
This is the record and the legacy of a decade of decline, including from the new Prime Minister, who slashed the enforcement budget by a quarter when she was in the right hon. Gentleman’s post. There might be a new Prime Minister, but it is the same old Tories. In the Environment Secretary’s own backyard, he has subjected his constituents to 581 sewage discharges in the last year alone. The very people who voted for him and put their trust in him have been let down by him. This could have been avoided had Conservative MPs not blocked changes that would have ended sewage discharges and finally held the water companies to account.
The Government’s plan is not worth the paper it is written on. It is business as usual, giving water bosses the green light to carry out another 4.8 million discharges through to 2035. When will the Government finally step up to eliminate the dumping of raw sewage into our environment? I have a message for whoever may be in the right hon. Gentleman’s post as early as this evening: the Labour party is putting you on notice. We are taking this fight, constituency by constituency, from Cumbria to Cornwall to turn those neglected filthy brown seats into bright red.
George Eustice
The hon. Gentleman’s contribution is characteristically political—[Interruption.] Let me say that this is the first Government to increase monitoring so that we knew there was a problem. This is the first Government to set out a £56 billion investment plan to tackle this. No previous Government, not even Labour Governments, ever prioritised this issue in the way that we have. The hon. Gentleman mentions cuts to the Environment Agency budget, but he misunderstands how that budget works. The cost of monitoring water companies’ permits for the management of combined storm overflows is cost-recovered through the permit, and there have been no cuts to that. They can to recover those costs, and we have increased the grant in aid budget to enable them to do further enforcement action. That is why we have seen record numbers of prosecutions being brought under this Government’s watch.
Mr Speaker
We now come to the Chair of the Environment, Food and Rural Affairs Committee, Sir Robert Goodwill.
Sir Robert Goodwill (Scarborough and Whitby) (Con)
Before privatisation, every single gallon of Scarborough sewage was pumped into the sea untreated. Since privatisation, we have seen investment in the Burniston water treatment works, which has been upgraded with ultraviolet treatment to increase its capacity, and in a 4 million litre stormwater tank at the end of Marine Drive that captures the majority of heavy storms. Would the Secretary of State agree that the bathing water off the Yorkshire coast has never been cleaner, and that while there is more work to be done, particularly on some of our inland waterways, private sector investment is the way to deliver that?
George Eustice
My right hon. Friend is absolutely right. We have prioritised investments through the new strategic policy statement for Ofwat, which means that this issue is being prioritised for the first time ever. He is also right that private capital has helped to raise the money to lead to infrastructure improvements. Things were not perfect in the days of nationalisation. Indeed, we did not even understand the scale of the problem because there was not the monitoring in place, which we have now required, to recognise it.
Mr Speaker
I call the Chair of the Public Accounts Committee, Dame Meg Hillier.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
In 2019, the River Lea suffered a discharge for 1,000 hours. That was three years ago, and the ripple effect of it will be longer than just this summer. But the Environment Agency, in response to my questions, says—as the Minister said—“Well, it is okay, we are monitoring more.” But that monitoring does not seem to deter the water companies from repeating their action. So why does he think the threat of prosecution and fines is not delivering quicker and better investment to stop this happening?
George Eustice
Quite simply, because this is the first Government in history to require all of these 15,000 storm overflows to be properly monitored, and now that we have that data, this is the first Government ever to bring prosecutions against those companies, and they will respond to that. This is also the first Government ever to prioritise £56 billion of investment to improve infrastructure so that these storm overflows are not needed.
Dr Neil Hudson (Penrith and The Border) (Con)
May I thank the Secretary of State for his statement and his clarity on this issue? Does he agree that that is in stark contrast with the Liberal Democrats, who are pumping out alarmist, inaccurate and frankly toxic material into our constituencies through leaflets and social media? In stark contrast, this Conservative Government are the first Government ever to take action on this and hold the water companies to account and to stop these illegal and unacceptable discharges.
Tim Farron (Westmorland and Lonsdale) (LD)
rose—[Interruption.]
Mr Speaker
As a matter of interest, the hon. Member did put his name in on this urgent question, so I am taking his question and I do not need any barracking.
Tim Farron
Thank you, Mr Speaker; impeccable timing, as always.
Look, it is obvious to everybody watching that we have a colossal problem: 6 million hours of sewage being dumped legally into our seas, lakes and rivers in the last year. These are the specifics of it: in the last 48 hours, a sewage dump on the beach at Seaford in Lewes. In my part of the world, Morecambe bay, 5,000 hours of sewage discharges on to the sands, and 1,000 hours into Windermere. Juxtapose that with £2.8 billion of profits for the water companies, £1 billion in shareholder dividend and the executives giving themselves 20% pay rises, 60% in the form of bonuses. I do not know about you, Mr Speaker, but I thought bonuses were what you got when you do a good job. And all this is done legally, on the sanction of this Government. When will they make these discharges illegal and ensure that the water companies pump their profits into ensuring that they protect homes and businesses, and our seas and lakes?
George Eustice
Our Environment Act addresses all the substantive points that the hon. Gentleman raised. As I said in my statement, Ofwat is currently consulting on an ability to regulate the dividends that companies pay and to link that to their environmental performance.
I would simply repeat that this is the first Government to prioritise this issue. These are long-term challenges. We could argue that the coalition Government, and Governments before them, could have acted on this issue and had a different strategic policy statement. There were Liberal Democrats in that Government. They chose to prioritise other issues, such as the alternative vote and Lords reform.
Rebecca Pow (Taunton Deane) (Con)
I will cry in a minute! Does my right hon. Friend agree that it is this Government who have prioritised this issue of tackling sewage discharges, with the monitoring, the reporting and the big investigation under way; and that, contrary to what we have heard from some Members, the Liberal Democrats actually voted against all those measures in the Environment Act? So they could have helped.
Crucially, would my right hon. Friend, who has himself done so much on this issue in the Department, agree that what is important now is that the regulator uses the power it has and uses its new directions; that the EA takes forward prosecutions following this intensive investigation; and that the water companies do not pay huge salaries if they cannot demonstrate that their house is in order?
George Eustice
I commend my hon. Friend for her role in progressing this agenda and for the work that she did on the Environment Act, which sets out all the new powers that we need to address this challenge. She is absolutely right: we introduced powers under the Act to give Ofwat new abilities to scrutinise and to change dividend awards. It is consulting on measures to do that now. It is because of the work of my hon. Friend and others in government and in the Department that we have the powers under the Environment Act to finally tackle this long-standing challenge.
Rosie Duffield (Canterbury) (Lab)
Recently the Environment Agency branded Southern Water “appalling” and awarded it a one-star rating. Frankly, in the view of my constituents, that was one whole star too many, and many of them are considering not paying their bills. I have held two public meetings in Whitstable so that representatives from our sailing clubs, swimmers, fishers and residents could confront Southern Water directly. Will the Secretary of State—or one of the Ministers, because we do not know who it will be—come to my constituency and meet groups such as SOS Whitstable, and hear from them what damage this is doing to our economy on a daily basis?
George Eustice
Southern Water is one of the companies that were recently investigated, and was subject to a record fine of close to £90 million. That significant fine actually precipitated a change in ownership of that company. I know that the new owners are committed to addressing the historic problems that they have had. As for whether a Minister will visit the hon. Lady’s constituency, if she would like to write to me or wait and see who is around tomorrow, I am sure they will look favourably on her request.
Jesse Norman (Hereford and South Herefordshire) (Con)
As my right hon. Friend knows, the River Wye is a priceless national asset, threatened by phosphate pollution. He also knows that the Wye is unusual because it crosses the border between Wales and England and the majority of its phosphate does not come from sewage companies, and therefore it will not be as affected as other rivers by the thoroughly laudable measures that my right hon. Friend has taken. Will he make a note to his successor, if there is one, and to his officials now in the Box, that the next administration of DEFRA, if there is one, should take the matter up with great energy and authority, and press the cross-border issue, for the betterment of the Wye, the whole catchment and this country as a whole?
George Eustice
My right hon. Friend raises an important point, in that there are sometimes cross-border issues. While we are taking leading action in England, we obviously also need other devolved Administrations, including in Wales, to play their part to address the challenge, particularly in catchments such as the Wye. I am aware of the point that he makes on phosphates. We are consulting at the moment on reducing nutrient pollution—both nitrogen and phosphates—from both agriculture and sewage treatment works, and I am sure that when the results are published they will give the impetus that he requires and requests for agriculture to be tackled.
Maria Eagle (Garston and Halewood) (Lab)
Last week, I and 17 of my north-west colleagues wrote to United Utilities about reported significant sewage releases into the River Mersey. United Utilities has simply denied that it was responsible and cited Environment Agency estimates that it is responsible for only about 30% of pollution incidents in the river. What will the Government do, on a speedier timescale than the one that the Secretary of State’s plan sets out, to make sure that investment in infrastructure is brought forward? The companies seem to have got into a very bad habit of treating the money that they make as something to be given out in dividends and payments to senior executives, rather than invested in the infrastructure that will make sure that this stops in the future.
George Eustice
The next pricing review period starts in 2025, which is not soon enough for me. That is why I said to Ofwat, and to the water companies, that they should bring forward any investments that they are able to. That is why, as I said earlier, there will be £3.1 billion of investments up to 2025, on 800 overflows, which will significantly reduce discharges by about 25% by 2025—so in the near term.
Martin Vickers (Cleethorpes) (Con)
Last week, I met Anglian Water to discuss the situation that had developed in Cleethorpes. Notwithstanding what the Secretary of State has just said, I was left with the feeling that we could be harder on it in the targets that we set. Whether that is through my right hon. Friend, Ofwat or the Environment Agency matters not. Could we look again at the targets that we are setting? In his earlier response, the Secretary of State mentioned 2035. That is a long way away. Traders in Cleethorpes want people to come along and be confident that the waters are clean.
George Eustice
My hon. Friend raises an important point. We are mindful of the impacts on bills. The average increase in bills with the measures we outlined—the £56 billion package—will be about £12 per household per year by around 2030. However, we have said that we will review this in 2027, and if it is possible to accelerate more of that investment, we will do so and the Government at that time can consider that position. I repeat that it is not the case that nothing is happening until 2035; indeed, we are spending more than £3 billion out to 2025, which will lead to a 25% reduction.
Mrs Emma Lewell-Buck (South Shields) (Lab)
I have repeatedly raised the issue of sewage dumping on the beach in my constituency in this Chamber. The Government continually use the excuse that it would cost up to £660 billion to upgrade our sewers, but the actual cost, over 10 years, would be £21.7 billion. Since privatisation, £72 billion has been paid out in dividends, so why are the Government not making the water companies meet these costs?
George Eustice
We also published and laid before the House yesterday a report required under the Act on the feasibility of removing the storm overflows altogether. It is the case that the cost of completely removing them, as the hon. Lady would like, is up to about £600 billion. Reducing their use so that they are not used in an average year would, in itself, be in the region of £200 billion. We have chosen to spend £56 billion, a significant investment, to target the most harmful sewer discharges, and that will lead to significant change in the years ahead.
Virginia Crosbie (Ynys Môn) (Con)
River pollution and sewage discharge in Wales is the responsibility of the Welsh Labour Government and last year there were more than 3,000 discharge incidents in waters around Anglesey. I have received many letters from my constituents who are concerned about the pollution of beautiful beaches such as Benllech as a result of the actions of Welsh Water. Does my right hon. Friend agree that the Welsh Government need to take responsibility and urgently implement a plan?
George Eustice
We have set an important example with the storm overflow discharge reduction plan that we have published. We have committed to the investment and we are bringing record numbers of prosecutions in England against water companies. My hon. Friend is absolutely right to say that we need the Welsh Government and the devolved Administrations to play their part too.
Andy McDonald (Middlesbrough) (Lab)
We have an ecological disaster with massive numbers of dead crustaceans, porpoises and seals washing up on the beaches around the Tees bay, hammering what is left of our fishing industry. In addition to the foul sewage discharges, levels of pyridine have been detected that are off the scale and there are concerns about the dredging of the river and the bay releasing toxins. Will the Minister assure me that his Department will commit to securing a proper explanation for this disaster and insist that his Tory Tees Valley Mayor does not repeat his misleading of the public about the quantities of dredgings being disposed of at sea?
George Eustice
The hon. Gentleman has raised this issue before and there was a tragic case of large numbers of crabs, in particular, being washed up on beaches in his constituency. We ordered an investigation by the Centre for Environment, Fisheries and Aquaculture, our leading fisheries science agency, supported by Natural England. Their conclusion was that this is most likely caused by a natural algal bloom event.
Derek Thomas (St Ives) (Con)
My local beach, Longrock, saw the highest number of combined sewer overflow notifications in this last bathing season, so I could not agree more that South West Water needs to do more. However, the Secretary of State will know that it is not just an issue for the water companies. For example, in a combined sewerage system, water from our roads, our farmland, our roofs and our own homes will eventually overwhelm this aged system. What can he do to encourage us all to act more responsibly in the way we use water, which will eventually overflow this system and go on to our beaches?
George Eustice
My hon. Friend highlights an important point: the origin of this problem links back to the Victorian combined sewer system we have, where street drainage systems are linked into the foul water drainage system. Since the 1960s, new housing developments have been required to be on a different drainage system, but I am sorry to say that all too often they have ended up plumbed back into the sewer. One key thing that water companies will be prioritising is, where possible, particularly on those later housing developments, ensuring that the drainage system is genuinely separated from the sewer system.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Last year, South West Water dumped 350,000 hours of raw sewage into the rivers and seas around the south-west. It has just been handed a one-star rating by the Environment Agency and a third of its sewage monitors do not work, according to the EA. Meanwhile, executive pay is up, dividends are up and it issued a special dividend to reward shareholders with even more money. Is it not time that South West Water published a full list of each and every raw sewage outlet that it is intending to close so that bill payers, such as the Secretary of State and I, can look at what it is intending to do and how these things are going to close? This will allow us to hold South West Water to account, just as we will hold the Tory Government to account for their failure to take faster action at the next election.
George Eustice
The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for St Austell and Newquay (Steve Double) has met South West Water to discuss some of these issues. I simply say to the hon. Gentleman that in 2016 only about 800 combined sewers were properly monitored and we have increased that to 12,000. Over the next year, we will increase it to 100% coverage. It is because of the action that this Government have taken to increase monitoring, something that no previous Government had done, that we have determined that there is a problem and we are bringing prosecutions against these companies.
Bob Seely (Isle of Wight) (Con)
On the island, we have persuaded Southern Water to undertake its most ambitious pathfinder project, which should, in time, see dramatic improvements. We need them, because in the past 24 hours we have had overflows at Bembridge, Cowes, Ryde, Seaview, Freshwater and Gurnard, which is unacceptable. I pay tribute to the work done by the Secretary of State and former Ministers in bringing in these new laws that have exposed the problem. We have seen the complacency and the failure in the water industry. Because of that failure and complacency, should we not now be bringing forward the legal timescales by which we demand action? We have exposed the problem, so can we not do more to demand that those water companies take the action that we all want to see?
George Eustice
It is important to distinguish between the failure of water companies to abide by their permit conditions, which is an issue and is the reason for the Environment Agency bringing multiple prosecutions on this matter—we must bring that to a speedy conclusion, seek immediate rectification and bring them back into compliance with their permit conditions—and the separate issue of the permitted use of storm overflows. That issue is about long-term investment in infrastructure, which is what our discharge plan addressed.
Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)
I hope you will excuse me for being slightly political on this matter, Mr Speaker. The Secretary of State continues to talk about the discharges and how he is trying to catch up with the water companies, but the reality is that we should be surcharging the water companies for the continuous abuse of our rivers, streams, play areas, seas and everywhere that this gets into. It ruins our environment for our rivers and our streams. If he wants to deal with this, he should surcharge the companies. If they cannot pay the surcharge, he should bring this back into public ownership—that is the answer to all of this.
George Eustice
As I said, we have brought many prosecutions since 2015 and levied fines of about £140 million on the industry. In one case, that precipitated a change in ownership of a water company. The right thing to do is bring prosecutions where a company is in breach of its permits, and that is what the Environment Agency is doing.
Huw Merriman (Bexhill and Battle) (Con)
Mr Speaker, thank you for granting not only this urgent question, but a 90-minute debate next Wednesday at 2.30 pm in Westminster Hall. Bexhill’s beach is red-flagged today, as it was yesterday, meaning that people should not enter the sea. It was the only beach in the area to be red-flagged and it is the only beach in the area whose bathing quality is not either “excellent” or “good”. I welcome the Secretary of State’s plan, but may I ask him to ensure that the areas that do not have good-quality bathing have a higher degree of prioritisation in the delivery of this plan?
George Eustice
I absolutely give my hon. Friend that assurance. Our discharge reduction plan absolutely prioritises bathing waters in those near-term investments.
Kate Osborne (Jarrow) (Lab)
While water companies such as Northumbria Water have made on average £2 billion profit a year since privatisation, filthy raw sewage is being dumped into our playing fields, our beaches and our waters. This included 1,248 sewage dumps across 48 sites in my constituency last year. Profits and shareholder dividends are up, at the expense of public health. I went to see for myself the River Don in my constituency a few weeks ago, and the stench alone made clear the scale of the issue. Will the Secretary of State and his Government act on this immediately, or is he content with this environmentally criminal behaviour?
George Eustice
I hope I have made it clear that we are not content with criminal behaviour, which is precisely why we are bringing record numbers of prosecutions, having discovered a problem as a result of the monitoring that the Government required. The hon. Lady mentions dividends. As I said earlier, the Environment Act 2021 gives us new powers, and Ofwat is currently consulting on new measures that will link dividend payments to environmental performance.
Tim Loughton (East Worthing and Shoreham) (Con)
At the hottest part of the summer, beaches from Hastings to Worthing were blighted by the discharges by Southern Water, even though the rain after the dry period was not particularly heavy. Many of our constituents and tourists just could not use those beaches. While I welcome the extra data and monitoring equipment, which is making the problem more transparent, what we really need is better inspection and enforcement by the Environment Agency, and better explanations from the water companies when these spills occur. If they are lacking, the companies need to be penalised. We also need better information for our constituents as to whether it is safe to go back into the water.
George Eustice
My hon. Friend raises an important point. As I said in my statement, we are now requiring water companies to make available to the Environment Agency all the discharge data from storm overflows, and to publish it in near real time for the public. We shall continue to bring prosecutions where there are breaches of licence conditions.
Mike Amesbury (Weaver Vale) (Lab)
Despite 12 years of Tory government and some of the tough and strong words in the Chamber today, in my constituency tonnes of sewage are discharged into the River Weaver, the River Mersey and the River Dane on a daily basis by United Utilities. The current system is not working. The future Secretary of State will need to step up, step in and get a grip of this situation. That is crystal clear right across this Chamber.
George Eustice
I am the first Secretary of State ever to publish a plan such as this. One of my first acts as Secretary of State in 2020 was to instruct officials to change the strategic policy statement for Ofwat, which for the first time prioritised reduction of storm overflows.
Mr John Whittingdale (Maldon) (Con)
May I thank my right hon. Friend and his Ministers for all that they are doing to tackle this issue. He will be aware of the importance of water quality in areas where oysters are grown such as the Blackwater estuary. What progress is being made to require the water companies to provide additional investment to carry out microbiological treatment to prevent things like E. coli contamination?
George Eustice
My right hon. Friend raises an important point. One of the actions that we are requiring water companies to take in some instances will be to use techniques that will disinfect water to prevent E. coli counts in the way that he describes, which can indeed affect shellfish sectors in aquatic environments.
Jeremy Corbyn (Islington North) (Ind)
Is it not obvious that all these years of privatisation, all the billions that have been paid out in dividends and profits and the massive levels of executive pay have meant that not enough has been invested in the infrastructure, and that there have been excessive numbers of sewage discharges, which are getting worse? Is it not obvious that we should do what every other country in western Europe does and bring our water industry as a whole into public ownership under public control so that we do not damage our water infrastructure in order to pay profits to distant billionaires?
George Eustice
The original vision of water privatisation was that we would have publicly listed companies on the London stock exchange and that water bill payers would also be shareholders. In the early 2000s, most of the water companies fell into the hands of private equity operators, and that was a change. The then Government took a decision to issue licences to operate in perpetuity rather than for fixed periods, which was the case previously. There have been some changes since privatisation, but I am afraid his central charge that nationalisation is the way to get investment is wrong.
Duncan Baker (North Norfolk) (Con)
Sometimes we forget in this place how we ended up here. We ought to recognise the work of the Environmental Audit Committee, a number of members of which are in the Chamber. The Chair, my right hon. Friend the Member for Ludlow (Philip Dunne), highlighted for the Chamber the entire situation in his water quality inquiry. Can the Secretary of State confirm that, without our work, we would never have highlighted the improper use of storm overflows, and we certainly would not have been in a position in which the Secretary of State has put together a plan to tackle this problem, which has gone on for years and years?
George Eustice
I am a great believer in the role of Parliament and always have been. It has been a team effort. When I became Secretary of State, I prioritised this long before it was an issue in the media and long before people realised it was an issue. Many Members, including the Chair of the EAC, my right hon. Friend the Member for Ludlow (Philip Dunne), played a crucial role in making sure that we got the legislation right.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
It is pretty obvious to most of my constituents that water privatisation has been a miserable failure. Most of our water companies are owned by foreign investment companies, and we have lost that link. I went campaigning for better water in the Colne, the Holme and the Calder some years ago, and Yorkshire Water said to me, “I don’t know what you are complaining about, Mr Sheerman; there is no river in England fit for humans to swim in.” That is the truth of the matter. I would not prioritise public ownership for this particular thing; I would use that for other sectors. But the fact of the matter is that the regulation has not worked, and it has got to work.
George Eustice
I agree, which is why the Government have changed our legal powers through the Environment Act 2021 to strengthen the regulation, and to require improved monitoring. On the basis of that monitoring and the evidence that it has revealed, we are now bringing record numbers of prosecutions. So the hon. Gentleman is right that there have been regulatory failures in the past. We have addressed those legal deficiencies through the Environment Act.
Sir Bill Wiggin (North Herefordshire) (Con)
Thank you for allowing the urgent question, Mr Speaker. My right hon. Friend will be aware that Herefordshire has been under a moratorium for several years now. Herefordshire Council has spent millions of pounds of council tax money buying land around Welsh Water’s sewage works to work as soakaways, yet now I learn that Natural England wants to extend the moratorium to the rest of the county. Please will he use his time in office to stop Natural England from pursuing this pointless and ineffective policy?
George Eustice
This issue is linked to a separate but associated challenge around nutrient pollution. We published our proposals to make some changes to deal with this issue on a strategic level before the summer recess, and we may well indeed need some legislative changes as the challenges that he highlights are a legacy of EU law.
Clive Efford (Eltham) (Lab)
The Secretary of State talks as if he is the first Conservative Secretary of State under this Government. The Conservatives have had 12 years to deal with this issue. Now we are seeing images of raw sewage being pumped out into our coastal waters at the height of the summer season. We have had 12 years of freebooting, when chief execs have paid themselves unearned bonuses and billions have been paid out in dividends. It is 33 years since privatisation. We were told that privatisation was the answer to problems like this. Why has the situation got worse, not better?
George Eustice
I am afraid that the failure to address storm overflows goes back much further. This is a legacy of the Victorian infrastructure that we have in place, and no Government down the decades in the 20th century properly grasped it. Successive pricing reviews under the Labour Government prioritised price reductions over investments to tackle this challenge. The same was true of the coalition Government. This is the first Government ever to prioritise this issue.
Robbie Moore (Keighley) (Con)
Constituents of mine along Rivadale View in Ilkley—indeed all of Ilkley and I—are getting fed up with Yorkshire Water’s underground apparatus and infrastructure failing in Ilkley. We have one scenario where a manhole cover has burst nine times in the past 12 months. Every time it bursts, sewage flows into the River Wharfe. We have passed the landmark Environment Act 2021, which, dare I say it, the Opposition did not vote for. Does the Secretary of State agree that Yorkshire Water needs to get its act together and sort this out, so that my residents are not having to suffer the consequences of sewage getting into the River Wharfe from this manhole cover bursting time and again?
George Eustice
As I said earlier, thanks to the evidence that has been gathered as a result of the new monitoring that we required, we are now bringing investigations into around 2,200 sewage treatment works. I cannot comment on the specific manhole cover that my hon. Friend refers to, but I can reassure him that the Environment Agency is prioritising all of these sorts of challenges.
Mr Clive Betts (Sheffield South East) (Lab)
A couple of weeks ago, heavy rainfall in Sheffield resulted in sewage flowing into the garden of my constituent Perri Bradbury and on into her home, so it has damaged the carpets, the floorboards and furnishings. She has young children. I do not think that we can imagine the awfulness of this situation. When I asked Yorkshire Water about compensation, it did a bit of a clean-up and then said that, under the Water Industry Act 1991, because this was due to exceptional weather, it was not obliged to pay any compensation and would not do so. Is it not time that we changed this out-of-date legislation and made sure that the cost of the consequences of sewage overflows falls on the water companies and not on residents, who have completely no responsibly for this?
George Eustice
The episode that the hon. Gentleman describes is probably linked to a failure somewhere in the sewage infrastructure rather than storm overflows per se, and that is a slightly separate issue. If he would like to write to me, I will look at the specific case he raises.
Tom Hunt (Ipswich) (Con)
On the topic of dirty waterways, more and more constituents have been getting in contact with me about the River Gipping over the summer. The river is full of algae and shopping trolleys and is distinctly unloved. Can the Secretary of State advise me and my constituents on how we can go about turning this situation around and potentially securing some extra funding? Ultimately, though, is it the Environment Agency or Ipswich Borough Council that is most responsible? Ipswich is not just about the waterfront on the River Orwell, which is lovely; it is also about the River Gipping. We have to love it and raise it up.
George Eustice
A number of agencies have a role in the situation that my hon. Friend describes. Typically, local authorities are responsible for most of the street drainage infrastructure and the schemes to address that, while the Environment Agency deals with fluvial flood risk, but the two often work together in partnership to tackle these challenges.
Richard Foord (Tiverton and Honiton) (LD)
This summer, people visiting east Devon had their health put at risk by greedy water companies. Executives at South West Water have been paid £2.2 million in bonuses over the past two years. A sewage pollution alert has been issued today in Seaton, and last year South West Water discharged water for more than 1,100 hours across Beer and Seaton. How comfortable is the Secretary of State with the size of the bonuses that have already been paid to South West Water executives while that company has received from the Environment Agency a rock-bottom one-star rating?
George Eustice
As I said earlier, the issue that the hon. Gentleman raises has been addressed through the Environment Act 2021. We have taken new powers to give Ofwat the ability to link dividend payments to environmental performance, and we are addressing the challenge of storm overflows through the plan we set out yesterday.
Cherilyn Mackrory (Truro and Falmouth) (Con)
I commend the Secretary of State—a fellow Cornish MP—for being the first Secretary of State so far to grasp this nettle and take robust action. As those on the Front Bench will understand, this is a serious problem in Cornwall, especially on the River Fowey, affecting our shell fishermen. It is also something that I raised more than two and a half years ago. Does he agree that enough is enough and that, if water companies are found not to be complying with their obligations, they should face unlimited fines, which I would like to see ringfenced so that we can invest back into the system to fix the problems, and even criminal penalties? If he does agree, will he set out how these will be implemented?
George Eustice
My hon. Friend raises an important point. As I have said, we are bringing a record number of investigations and prosecutions against water companies for potential breaches of their permit conditions. In addition, in the River Fowey, there is also a challenge around agricultural diffuse pollution, which contributes to the issue for the mussel and oyster fishery in that particular part of the world. That is something that we are addressing through our new targets in the Environment Act 2021.
Valerie Vaz (Walsall South) (Lab)
That is clearly not enough. This is a public health issue. Will the Minister consider making it a strict liability offence to dump sewage anywhere and give the Environment Agency more immediate powers, such as cease and desist, because clearly it is being ignored?
George Eustice
The real challenge is that the Environment Agency was not fully aware that these breaches were occurring. That is why, as I said earlier, the Office for Environmental Protection is investigating why the Environment Agency was not aware that permits it had granted were, it appeared, not being followed in all cases. None the less, the Environment Agency has all the powers it needs to prosecute, to bring fines and to require immediate changes.
Selaine Saxby (North Devon) (Con)
Does my right hon. Friend agree with me about the importance of having accurate facts and data in this area? Pollution incidents in my North Devon constituency are actually down by 83% this year compared with last year. The increase in monitoring means that macro data between years is not comparable. Furthermore, when storm overflows discharge, frequently that is not raw sewage. Does he also agree that misinformation from the Opposition and the media on this topic is potentially damaging businesses along the coast, especially when their water is clean?
George Eustice
My hon. Friend raises a very important point: we need to have accurate data, which is why we have required new monitoring to be put in place and new disclosures to be made by water companies both to the public and to the Environment Agency. She is also right that some storm overflows are discharging storm water from drains and not foul water—sewage—at all, and we need to make that distinction. That is why we are prioritising environmental harm rather than the total number of discharges, because we need to recognise that some are more harmful to the environment than others.
Mary Kelly Foy (City of Durham) (Lab)
Water companies must clean up their act. Last year, Northumbrian Water allowed 615 days’ worth of raw sewage to be dumped into rivers at 92 sites across Durham, including the Wear, the Browney and the Deerness, making a lovely home for the dead ducks, the traffic cones, and the used drug kits filling up the Wear. Does the Minister believe that the new Prime Minister regrets her savage cuts to the Environment Agency’s monitoring and enforcement work?
George Eustice
As I have said, there has been an increase in the grant in aid for the Environment Agency since 2010. More importantly, the work done on monitoring is cost recovered through the licences and permits that are issued. On a wider point, yes, we recognise that this is a challenge. I recognised that on becoming Secretary of State in 2020. Our plan addresses all of the issues that the hon. Lady highlights.
Scott Benton (Blackpool South) (Con)
Contrary to the absolute nonsense peddled by the Opposition, it is this Government who are the first in history to bring forward a comprehensive plan to tackle sewage discharges. At a time when household budgets are under immense pressure, does my right hon. Friend agree that it would have been incredibly reckless to have agreed to Labour’s plans to eliminate sewage discharges, which would have landed the taxpayer and consumers with a £600 billion bill and left consumers paying thousands more per year for their water?
George Eustice
As I said earlier, we have chosen to prioritise the most harmful sites and to prioritise them quickly, with £3 billion of investment until 2025 and £56 billion of investment across the programme. My hon. Friend is right: to eliminate all storm overflows in their entirety would be a huge undertaking, costing £600 billion, with a major impact on the bills of water bill payers.
Fleur Anderson (Putney) (Lab)
Our sewage pollution is packed with wet wipes, and wet wipes that are made of plastic just never break down. Last week, I was on the banks of the River Thames visiting a wet wipe island, which was the size of two tennis courts and a metre deep. In February, the Government consulted on eliminating plastic from wet wipe production. It can be done, but the results have not been revealed. Can the Secretary of State say when the consultation results will be revealed and when the Government will ban plastic in wet wipes?
George Eustice
This Government have taken relentless action to remove plastics from the ocean, banning plastic stirrers and cotton buds and, as the hon. Lady says, consulting on the next steps to deal with non-biodegradable wet wipes. The consultation has now closed and it is the convention that they are typically replied to within nine to 12 months.
Alex Chalk (Cheltenham) (Con)
For decades—indeed since the Victorian era—sewage has been discharged into the River Chelt. That is, of course, completely unacceptable. Now Severn Trent Water has given me a cast-iron guarantee that it will cut discharges by 85% by the end of 2024. Does the Secretary of State agree that companies such as Severn Trent need to abide by those commitments, and that if they do not, my constituents and others like them will conclude that these water companies are the unacceptable face of capitalism?
George Eustice
It is important that we have worked closely with the water companies, many of which recognise that there is a challenge. As my hon. Friend says, many have now said that they want to bring forward investment planned for the late 2020s to much sooner and are discussing that with Ofwat. We recognise and welcome that; it is good that those water companies are finally waking up and recognising and dealing with this challenge.
Liz Twist (Blaydon) (Lab)
It must be apparent from the response to the news of the combined sewer overflows that the public, our constituents, do not believe we are doing enough to stop that happening. Last year, the Government had the chance to go further in the Environment Act 2021, but did not do so. People are concerned about the impact on their health and the environment. What assessment has the Secretary of State made of the health impact of CSOs, and will he look at speeding up the timetable for stopping them? I pay tribute to Surfers Against Sewage, which has done so much to highlight this issue.
George Eustice
The Environment Act addresses those issues, and this Government and Conservative Members voted for the changes that put in place the legal powers that we need to address this challenge. The hon. Lady asks whether we can speed things up; as I have said, we are already talking to water companies about bringing forward investment into the current pricing review period. We will have more than £3 billion-worth of investment up until 2025 and we will review in 2027 whether we can accelerate the plan further.
Fay Jones (Brecon and Radnorshire) (Con)
I am very proud to have the Rivers Usk and Wye in my constituency but, as has already been said, the Wye flows from my constituency into England and back again. Last year, I asked the then Environment Minister, my hon. Friend the Member for Taunton Deane (Rebecca Pow), to chair a roundtable of all parties with her counterpart in the Welsh Government. She kindly agreed to that, but the Welsh Labour Minister told me there was no value in such a meeting. Can the Secretary of State advise me on how we can drag the Welsh Government to the table and engage with them on this issue?
George Eustice
My hon. Friend raises an important point. As I have said several times, we are taking clear and assertive action in England to tackle the problem. We need the devolved Administrations, particularly Wales, to play their part as well, and it is disappointing if what she says is correct and Ministers have declined a meeting. I would advise her to work with Members of the Welsh Assembly to try to bring matters to a head and address the issue.
John Cryer (Leyton and Wanstead) (Lab)
Could the Secretary of State send a copy of the statement he has made today to those people who claim to run Thames Water? So far in their correspondence with me they have refused to give any undertakings about keeping drains and overflows clear. They also refused to attend two public meetings in Leytonstone in my constituency on the flooding—in fact, getting a papal audience would be easier than getting constructive information from Thames Water. I hope I am wrong about this, but despite the Secretary of State’s best efforts I suspect that Thames Water, one of the most powerful companies in the country, will continue to treat elected representatives and consumers with contempt.
George Eustice
That is very disappointing, if what the hon. Gentleman says is right. In my constituency I have regular engagement with South West Water and I am sure many other hon. Members have regular engagement with their own water company. I would simply say that the key role of Government is to ensure that we have the legal powers to bring prosecutions where they are necessary, and to set in place the strategic plan to require the investment necessary to deal with this particular problem.
Steve Brine (Winchester) (Con)
Countries around the world and other parts of the UK are battling historical infrastructure constraints that mix storm water with foul water. Does the Secretary of State agree that what we need in this debate is some cool, some balance and to deal in the facts? There has been some deeply grubby, irresponsible scaremongering over the summer from some of the usual suspects. In the spirit of honesty and truth—I appreciate that 2035 is a long way away; too long for many of my constituents—can the Secretary of State tell the House the cold, hard choices that he and his potential successor face, and I suppose therefore water bill payers in our constituencies face, to speed things up significantly?
George Eustice
It is not the case that nothing will be done until 2035. Indeed, investments are happening right now to improve more than 800 priority storm overflows. We will see a reduction in discharges across the country of around 25% by 2025, and then we will go further out until 2035. The estimated average increase in water bills for those actions, the £56 billion package that we have set out to 2030, will be in the region of £12 per year. Were we to go further, it would be around 10 times higher than that every year.
Ben Lake (Ceredigion) (PC)
We have heard this afternoon of the ecological impact that many of these sewage discharges have on rivers and coastal areas, as well as the public health concerns that arise from them. It bears repeating, of course, that there is also an impact on local communities and businesses, especially in coastal communities. Does the Secretary of State agree that, as part of his plans to tackle the problem, perhaps compensation should be considered for those communities impacted, which might well prove an incentive to those water companies to speed up some of their work?
George Eustice
Obviously, the issue is devolved; the action we have taken is in respect of England and it is for the Welsh Government to tackle some of the challenges they have in their own area. The approach we have taken is essentially to require and allow unlimited fines against companies that breach their permit conditions. We are bringing record numbers of prosecutions and we believe that that is the right way to bring those water companies back into compliance.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
My beautiful South West Hertfordshire constituency has the River Chess going through it. Jon Tyler is the last watercress farmer along the River Chess. Can my right hon. Friend give me assurance that the Environment Act, as is, is the best way to ensure that his business remains successful in the years to come?
George Eustice
My hon. Friend makes an important point. The Department is also working on a new horticulture strategy, and I invite him to write with details of the particular watercress grower he refers to, to ensure that the challenges they face are properly reflected in the new strategy we are developing.
Olivia Blake (Sheffield, Hallam) (Lab)
I did not realise that the Government’s plan for biodiversity net gain was simply to boost the level of E. coli and Campylobacter in our rivers and waterways. That is a serious point, because earlier this summer the chief medical officer, Ofwat and the Environment Agency set out that they have real concerns about the spread of antimicrobial-resistant bacteria in our waterways, not just because of sewage from storm overflows, but because of normal sewage treatment works. What is the wait? Why have we been waiting 28 years to ban that outright?
George Eustice
The hon. Lady is wrong. The environment targets that we are currently consulting on will set ambitious targets to improve bathing water quality, addressing issues such as E. coli counts. She is also wrong to say that the issue of breaches of permits from water treatment works is not being addressed; it is being investigated right now at 2,200 facilities and, where appropriate, prosecutions will be brought.
Mims Davies (Mid Sussex) (Con)
My constituents in Mid Sussex have rightly been very concerned by social media’s inferring that the Government are not taking significant action. As confirmed today, that is both irresponsible and alarmist. We all enjoy the seaside in Sussex and across the country. People are acting today as if they do not bear any blame themselves, but we are all contributing to this problem. We should be allaying fears. DEFRA should be working to give my constituents and those across the land a clearer insight into the positive changes, and to ensure that we keep our resorts busy and our bathing water safe. Will the Department provide more clarity so that people understand that the situation is improving significantly?
George Eustice
I have been grateful for today’s opportunity and I hope to do precisely that. We all know that one should not believe everything one sees on social media. I tend not to participate on Twitter and social media for precisely that reason; in my view, it is best not to have a Twitter account. The important thing is that we parliamentarians focus on the substantive issue. That is what I have done as Secretary of State and it is what the report that we published yesterday does.
Layla Moran (Oxford West and Abingdon) (LD)
This was the first summer that Oxford West and Abingdon could enjoy the fact that the River Thames in Port Meadow had been granted bathing water status, and it was enjoyed by many, but it is the second of only two such sites in the entire country. I know that the Government want more locations to be granted the status, but that is difficult because of the huge amount of work that needs to be put into the bids, and the fact that no money is allocated in the Department to help communities and councils to put the bids together or to put in the extra resources. Will he consider a fund to help communities and councils to gain bathing water status for our rivers?
George Eustice
If the hon. Lady writes to us about her proposal, we will look at it. DEFRA has a target under the Environment Act 2021 to increase the number of bathing waters that are in good and favourable condition, and the Environment Agency and others work to ensure that the designations can be processed.
Jerome Mayhew (Broadland) (Con)
We need to establish the real scale of the problem. It has been estimated that providing a full solution to storm overflow discharges will require the replacement of 100,000 miles of combined sewers, so the Government have it absolutely right with increasingly onerous targets for Ofwat backed by unlimited fines, and £56 billion of infrastructure investment year after year. Does my right hon. Friend agree that to pretend that we can call for an immediate ban does a huge disservice to the general public and takes them for fools?
George Eustice
My hon. Friend is absolutely right. It is important to take the right long-term decisions now on investment, monitoring and bringing prosecutions in order to ensure that the issue improves over the next 25 years and, indeed, that it improves significantly between now and 2025; that is exactly what our plan sets out.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his answers. He has mentioned on three occasions the need for the devolved Administrations to play their part. Sewage impacts on all the seas around the United Kingdom of Great Britain and Northern Ireland. Taking into consideration the fact that 7 million tonnes of raw sewage are pumped into Northern Ireland’s seas and waters, and more than £1.5 billion of investment is needed to repair that situation, does the right hon. Member agree that there must be a holistic approach to tackling sewage pollution across the whole United Kingdom of Great Britain and Northern Ireland?
George Eustice
As I said, responsibility for water quality is devolved, but of course we work closely with all the devolved Administrations. DEFRA will share all the policy thinking, work and analysis that we have done in respect of England with any devolved Administration who would find it useful.
Anna Firth (Southend West) (Con)
There are two pollution warnings on our beautiful beaches of Southend West today, because of the use of storm overflows. I welcome all the work that the Government are doing and their plans to reduce the problem, but does my right hon. Friend agree that the payments of dividends and capital buy-backs must be directly linked to Anglian Water’s performance in preventing sewage discharges in my constituency?
George Eustice
Yes, I agree that dividend payments should be linked to compliance with permits and environmental performance, and we have taken the powers in the Environment Act to ensure that that happens.
Madam Deputy Speaker (Dame Eleanor Laing)
Last question—the prize for perseverance and persistence goes to Anthony Browne.
Anthony Browne (South Cambridgeshire) (Con)
The discharge of sewage into waterways, including the beautiful chalk streams of South Cambridgeshire, is clearly completely unacceptable, which is why I welcome the package of measures the Secretary of State talked about earlier finally to tackle the problem. Enforcement is a lot more effective if we hit owners and senior executives where it hurts most: in their pockets. That is why I welcome the fact that, as the Secretary of State has mentioned, including in response to the previous question, Ofwat is consulting on linking dividend payments to environmental performance. Does he also agree that the Government should consider going further and banning water companies that are fined for illegally dumping pollution from paying any bonus to their senior management team or dividends to their owners for one year? When bankers break the law, they lose their bonuses. Should not the same happen to water company executives?
George Eustice
As I said, Ofwat is consulting on a package of measures, using the new powers that we have given it under the Environment Act. I am sure that it will study this urgent question carefully and take on board my hon. Friend’s policy proposal.
Point of Order
(2 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Holly Lynch (Halifax) (Lab)
On a point of order, Madam Deputy Speaker. I hope that you can help me. Earlier this morning, we were notified that today’s planned line-by-line scrutiny session of the National Security Bill, which was due to start at 9.25 am, would be adjourned. That followed a tweet from the Minister for Security, the hon. Member for Stevenage (Stephen McPartland), late last night, announcing his intention to resign from the post. However, he committed to continuing to serve as the Security Minister until a new Minister could be appointed. Despite the fact that no new Security Minister has been appointed, the Minister was not in the Bill Committee this morning and the Whip moved to adjourn.
This is the second time that a Security Minister has resigned immediately before a Committee sitting on this Bill was due to start. We have now had three Ministers and acting Ministers over the course of the Bill Committee, as well as some very late substantial additions to the Bill. In order for us to have scrutinised the Bill in accordance with the programme motion, a new Minister will have to be in place for Thursday’s sitting, but that means that someone will likely have less than 24 hours to familiarise themselves with the complexities of the legislation, making a mockery of the process. This is literally national security; the security services need this new provision. We will be up to four Ministers by the end of the week, which means that so far we have had more Security Ministers on the Bill than there have been days of scrutiny.
Madam Deputy Speaker, have you been notified of the Government’s plans to get the vital National Security Bill moving again to plug the serious gaps in our national defences?
Madam Deputy Speaker (Dame Eleanor Laing)
I thank the hon. Lady for her point of order. I am sure that the whole House agrees with her that the National Security Bill is an extremely important piece of legislation and it is vital that it should be properly scrutinised by the Committee, but I have to say that I am little surprised at her surprise that there is a ministerial reshuffle going on. I do not think that is a surprise to anyone, not just in the Chamber, but across the country or indeed the world. When a change of Government is occurring, there is by necessity a change of Ministers. It is unfortunate that this important session of this important Bill Committee happened to be taking place this morning—the day on which there is a changeover of Prime Minister.
The hon. Lady says that the situation makes a mockery of the system. I would say to her that this is how our democracy works. It is true, as somebody once correctly said, that democracy is the most inefficient form of government, but I think that we would all agree that it is still the best and fairest. I have every sympathy with the hon. Lady’s frustration at not being able to get on with this important piece of work, but I am pretty certain that within 48 hours, if not 24, there will be a Minister in place—[Interruption.] Sorry, is the hon. Member for Llanelli (Dame Nia Griffith) interrupting me when I am answering a point of order? Would she care to make another point of order? If not, would she please not interrupt me while I am answering this one?
Clearly the Bill needs to be scrutinised. Nobody disagrees with that. While I understand the frustration felt by the hon. Member for Halifax (Holly Lynch), this is how our democracy works. I am sure that there will be a Minister in place in very short order. I hope that if perchance there is no Minister in place within the next two days, the hon. Lady will come back to the Chamber, so that we can address what by then will be a situation that needs to be addressed by the Chair.
Mr Kevan Jones (North Durham) (Lab)
Further to that point of order, Madam Deputy Speaker. I am grateful for your explanation, but may I inform you that what we discovered in the Committee this morning is not what has been presented to you. The Minister said that he would resign but stay in place until the new Minister was appointed, so in effect we do have a Minister. We asked the Government to explain the position, but the Whip did not provide an explanation. The Committee sits again at 2 o’clock, because we objected to the process, and we will try again, but the Government must explain the current status of the Minister for Security.
Madam Deputy Speaker
I do not think the right hon. Gentleman needs me to explain to him that there are certain duties that fall to the Security Minister, which means that it would be unwise to have no Security Minister. What he has explained fits with that important duty, but he is obviously of the opinion that the Minister ought to be present in the Committee. Clearly, the Government have a different view. That is not a matter for the Chair. I take the right hon. Gentleman’s point, but that is not a matter for me to adjudicate. I have given the hon. Member for Halifax a proper answer.
Bill Presented
Energy Costs (Domestic Customers and Small Business) Bill
Presentation and First Reading (Standing Order No. 57)
Ed Davey, supported by Wera Hobhouse and Sarah Olney, presented a Bill to prohibit Ofgem from increasing the energy tariff cap above the level set for the period 1 April 2022 to 30 September 2022 before 31 December 2022; to require the Secretary of State to report to Parliament on the merits of the Government providing funding to energy providers to mitigate the impact of this measure and on the merits of extending and backdating the Energy Profits Levy in order to pay for such funding; to require the Secretary of State to report to Parliament on the merits of the Government providing grants to small businesses equivalent to 80% of the expected increase in their energy costs for the period 1 October 2022 to 30 September 2023, and on the merits of maintaining the rate of the Corporation Tax Surcharge on banks at 8% in order to fund such grants; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 16 September, and to be printed (Bill 150).
Criminal Appeal (Amendment)
Tuesday 6th September 2022
(2 years, 3 months ago)
Commons ChamberRead Full debate Criminal Appeal (Amendment) Bill 2022-23 View all Criminal Appeal (Amendment) Bill 2022-23 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I beg to move,
That leave be given to bring in a Bill to amend the Criminal Appeal Act 1968 to allow leave to appeal an unspent conviction where there has been a material change in the law, notwithstanding the date of conviction; and for connected purposes.
I declare my interest as a co-chair of the all-party parliamentary group on miscarriages of justice and chair of the future of justice commission. Before I begin, I would like to pay tribute to the wonderful volunteers in JENGbA—the Joint Enterprise Not Guilty by Association group—for their tireless work campaigning against miscarriages of justice for so many years. It is great to have many of them in the House today, and I thank them for joining me yesterday for our launch event. I would also like to thank my good friend and colleague Glyn Maddocks, who has been unwavering in his determination to see these injustices put right. There is a great coalition of people campaigning for justice in this respect.
Way back in 1992, when I was shadow Home Secretary Roy Hattersley’s deputy, it was the time of the Guildford Four and the Maguire Seven. I became very much involved in those controversial cases, and since then fighting miscarriages of justice has been a core passion of mine. Through the APPG, we started a commission that produced a leading report on the Criminal Cases Review Commission. That report’s recommendations have been well received and are being used as far afield as Canada, and the Law Commission is now reviewing the real possibility test in this country.
For those who suffer a miscarriage of justice, the consequences are truly devasting, not only for them but for their family, their neighbours and their community. It is vital that we as parliamentarians do everything we can to ensure that quick and effective mechanisms are available to right wrongs when they occur in our criminal justice system. No criminal justice system is perfect. One cause of miscarriages of justice is the legal doctrine of joint enterprise. Joint enterprise is a wide legal doctrine, so I will focus on one aspect of it: parasitic accessorial liability, or PAL.
PAL arises where two or more people commit a criminal offence, and during the commission of this crime another individual goes on to commit a further, usually more serious, offence. All those who committed the first crime will also be liable for the second crime if they foresaw the possibility that the offence would occur. It was formulated in 1985 by the Privy Council and brought into English law by the House of Lords in 1999. It has since received much criticism from legal academics and practitioners for being both unclear and unfair.
One of the reasons for this criticism is that the doctrine has resulted in the anomaly whereby it is easier to convict the accessory than the individual who physically committed the crime. In addition, the law has disproportionately impacted on marginalised people: for example, young, black, working-class men are severely over-represented in convictions under joint enterprise according to a study by Manchester Metropolitan University. JENGbA says that around 80% of the people who contact them are black or minority ethnic, and almost all are working class.
Additionally, it is often individuals on the autism spectrum who are impacted by joint enterprise. I am closely involved in the Westminster Commission on Autism, so this aspect of joint enterprise is of particular concern to me. The way in which the criminal justice system has dealt with autistic people in joint enterprise cases is nothing short of a travesty. Names such as Alex Henry and Osime Brown will be familiar to anyone who has taken an interest in this area. Alex’s sister Charlotte is here today, I believe. She has been a fearless campaigner for justice. Autistic individuals, because of their condition, often do not have the cognitive ability to foresee a crime taking place and so are particularly vulnerable, yet time and again they have been convicted using this law.
In part because of the criticisms, in 2016 the Supreme Court handed down a judgment in the case of Jogee. In doing so, the Court departed from precedent, stating that the law relating to joint enterprise had taken a wrong turn. This meant that people could no longer be prosecuted for the possibility of foreseeing a crime taking place, but only if they intended to assist in committing it. That was a genuine moment of legal history. The Supreme Court recognised that a colossal error had been made and that many people had been prosecuted under an incorrect interpretation of the law.
The House would expect that after such a significant change, there would be a wave of successful appeals, but that has not been the case. By last year, only two out of 103 appeals made with reference to Jogee had succeeded. In part, that is because of the restrictive approach used by the courts in out-of-time appeals. Leave to appeal in these types of cases is granted only if the applicant can demonstrate that they have suffered a “substantial injustice” because of the change in the law, and the current interpretation of substantial injustice is uncertain at best.
Courts have identified a changing range of factors that applicants have to meet to demonstrate that they have suffered a substantial injustice. At present, it seems that the definition of substantial injustice in joint enterprise cases is be found in a notorious case, also from 2016, in which the court decided that appellants would have to prove that they would have been found not guilty in their trial. For example, for murder cases, someone would have to satisfy the Court of Appeal that they would not have been convicted of murder. This test is higher than the mere “safety” required for an in-time appeal, and even higher still than a “significant possibility” that a jury would acquit the appellant.
When the proportion of miscarriages of justice is so high in this area of law—it is reckoned that 1,000 people, mainly young men, are in prison as a result of this law—I fail to see the policy justification for dealing in absolutes as the Court of Appeal has done. I understand the need for finality in criminal appeals, but it cannot come at the cost of the right to access a court for a fair retrial. At present, the process places a disproportionate burden on the appellant.
In my view, 30 years of erroneously applying the common law should amount to a substantial injustice, and the people who have been convicted under this law deserve to have their appeals heard. The courts have failed to provide a mechanism for people who have been convicted under the pre-Jogee law to appeal their convictions, and we cannot continue to wait for the courts to assist these people. It is time, and it is right that we as parliamentarians act to right this injustice.
That brings me quickly on to the substance of the Bill, which would amend the Criminal Appeal Act 1968 by inserting a new subsection in section 18. It would give leave to appeal against a criminal conviction for an offence that no longer exists, or if the offence has changed in a way that is material to the applicant’s conviction. That includes the availability of a defence that did not previously exist.
As I have said, a key principle in criminal appeals is finality. I accept that there are legitimate policy reasons for restricting appeals: I agree that we cannot have appeal after appeal; that to maintain trust in the criminal justice system, cases must be settled; and that unfettered appeals must not be permitted. Because of that, my Bill includes a clause that would create conditions for using the new avenue of appeal. The application must be served before the conviction is spent or there must be some other compelling reason why it is in the interests of justice to allow the appeal.
The Bill, if passed, would permit those convicted under the pre-Jogee joint enterprise law to appeal their convictions without having to pass the high bar set by the substantial injustice test. It would also remove the 28-day time limit for change of law cases if they met those conditions.
Although you might not think so, Madam Deputy Speaker, this is a simple Bill that would have a great impact on a large number of people. Because the Ministry of Justice does not hold figures on those convicted under joint enterprise, we do not know how many people that would be, but from estimates by JENGbA and others, we know it is in the thousands. If passed, my Bill will help to provide them with the access to justice that we all deserve in a democratic society. Strengthening our justice system does not just benefit those who interact with it; it makes our entire society stronger and ensures protection for every one of us, whenever we may need it.
Today, I hope that all right hon. and hon. Members will join me in fixing a major flaw in our justice system, making amends and taking a big step to guarantee the right to justice for every citizen. The law was wrong for 30 years and it is now time for us to give the courts the chance to put it right. I commend my Bill to the House.
Question put and agreed to.
Ordered,
That Mr Barry Sheerman, Sir Robert Neill, Kim Johnson, Mr Andrew Mitchell, Yasmin Qureshi, Julie Elliott, Janet Daby, Dan Jarvis, Hilary Benn, Jim Shannon, Valerie Vaz and Kim Leadbeater present the Bill.
Mr Barry Sheerman accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 20 January 2023, and to be printed (Bill 151).
Trade (Australia and New Zealand) Bill
Tuesday 6th September 2022
(2 years, 3 months ago)
Commons ChamberRead Full debate Trade (Australia and New Zealand) Act 2023 View all Trade (Australia and New Zealand) Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
18:00 - The House divided: - Ayes: 309 / Noes: 56 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Eleanor Laing)
The reasoned amendment has not been selected.
The Secretary of State for International Trade (Anne-Marie Trevelyan)
I beg to move, That the Bill be now read a Second time.
Just over two and a half years ago, the UK set out as an independent trading nation and began a new future outside the European Union. That future would be shaped by rekindling old partnerships, striking up new ones and harnessing the power of free trade to create prosperity for every corner of the UK. The free trade agreements that we have signed with Australia and New Zealand represent the first significant successes on this journey, and they are the first from-scratch trade deals that the UK has signed in 50 years.
Caroline Lucas (Brighton, Pavilion) (Green)
I am grateful to the Secretary of State for giving way so promptly. I appreciate that it is a bit unusual to intervene so soon, but I wonder if she accepts that the process by which we are having this debate utterly undermines this House. It is deeply undemocratic that there has not been any way for us to have a full vote on the objectives of each future trade deal or access the negotiating texts, for example; there are no guarantees for the House on any of those things. Will she take away the anger that is felt certainly on the Opposition side of the House about that, and look to change the process in future?
Anne-Marie Trevelyan
I thank the hon. Lady for her comments. I hope that as we progress the discussions today, we will be able to look at them.
Mr Steve Baker (Wycombe) (Con)
Is it not the case that negotiations directly between Parliaments—that is the effect of what the hon. Member for Brighton, Pavilion (Caroline Lucas) says—on any international agreement would be an absolute nonsense and would never get us anywhere? The right way is to use plenipotentiary powers in the name of the Crown to negotiate the deal and then have a serious engagement with Parliament, as this is.
Anne-Marie Trevelyan
I thank my hon. Friend. Both hon. Members highlight what is important about what we are doing today, which is bringing to the House, as part of our new free trade agreement powers, the opportunity for the UK to negotiate and complete really great deals with our important trading partners that will help us to grow our economy. That is the power and the freedom that our departure from the European Union brought us in trade, and I have been proud to drive that forward in the last year. The Australia and New Zealand trade deals are two of many that are now in train that will help our businesses to export more widely to the rest of the world.
These free trade agreements will eliminate tariffs on 100% of all UK exports to Australia and New Zealand. As I say, that will open up new trade opportunities for businesses of all shapes and sizes, and that is an important aspect of the opportunities that our free trade powers bring us for our businesses to take advantage of.
Mike Freer (Finchley and Golders Green) (Con)
While Opposition Members focus on process, does my right hon. Friend agree that professional services’ ability to trade without requalification is a massive export opportunity for the sector in the whole of the UK?
Anne-Marie Trevelyan
I thank my hon. Friend for his intervention and, indeed, for his incredible work in the Department over the last year to help us to grow our export opportunities for businesses. He is absolutely right: one of the key opportunities for our service sectors is negotiating that mutual recognition of qualifications, which removes a market access barrier to enable businesses to share their expertise more widely. Not only in the Australia and New Zealand trade deals, but as we work in places such as Canada and the USA, those are key areas where we can genuinely rocket-boost what our businesses will be able to do in taking their expertise across the world.
John Spellar (Warley) (Lab)
The right hon. Lady is talking about businesses, but is this not also about individuals in these jurisdictions who have the qualifications and skills? There will be a greater mutual benefit, not just a benefit to the UK. This will grow the economies of the free world and enable our citizens, and those of Australia and New Zealand, to develop their careers and opportunities.
Anne-Marie Trevelyan
The right hon. Gentleman is absolutely right. A key element of the Australia and New Zealand trade deals is the improved mobility arrangements, which will not only give those under 35 much more flexibility, but will mean that those with professional skills can move much more easily between our countries, for exactly that reason: to help their skills as individuals, as he says, and as part of businesses to grow those economies mutually. Our trade deals are all about mutual benefit and picking countries with which we have strong ties and want to grow our economies together.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
In evidence to the Senedd’s Economy, Trade, and Rural Affairs Committee, the Welsh Government, the farming unions and the Welsh Local Government Association expressed concern that there was no published data about the impact on specific Welsh economic sectors and subsectors. Will the British Government publish that data—they must have it to have come up with the cumulative data that they have published—or are they guilty of hiding the impact of these trade deals on sectors such as Welsh hill farming?
Anne-Marie Trevelyan
We have done a great deal of economic assessment across any number of layers. I am very happy to share with the hon. Gentleman some of the detail in due course, and the team will pick that up with him.
It is important to remember that one key area, as we look beyond sectors and to the other side beyond business, is that the consumer will be able to enjoy many more Australian and New Zealand brands coming to the UK, in the same way as the UK will be able to share our brands with other countries. I was in Australia and New Zealand last week, and it was very charming to see which British products people were excited to have more of. I was also able to say that I would help personally to ensure that Australian wine is drunk more often at my own table as a result of this trade deal.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Further to the point made by my Welsh nationalist friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards), I understand from the Department that it has not granularly broken this down, but has made assumptions in the modelling across the regions of England and the nations that make up this current Union. I would be surprised if the Secretary of State has the data, which I think would give figures that were quite alarming to people in Wales, Northern Ireland and certain areas of Scotland, particularly those involved in livestock production.
Jim Shannon
The Secretary of State will be aware that the Northern Ireland beef and lamb sector is worth some £1.3 billion, employs 5,000 staff in processing and has some 29,000 farmers, and 70% of that produce goes to the UK. Her own Department has reported:
“If large local economic effects occurred, this could…result in a net GVA loss for Northern Ireland.”
May I ask the Secretary of State—it is the same question as others have asked, but about Northern Ireland—what steps can be taken to ensure that, if this is the case, Northern Ireland is not left behind in trading with Australia and New Zealand? I know it is an interest for the Secretary of State, and it is a big interest for me in my constituency.
Anne-Marie Trevelyan
The concerns that the farming community has raised are ones we have addressed many times, but I am happy to address them again. As part of the trade deals, and acutely aware of the sensitivities of our changing farming communities as we have left the European Union, we have built in—after quite a lot of negotiating effort with our Australian and New Zealand partners—a three-layered set of safeguards to ensure that there cannot be any unexpected surge of agricultural products coming in that would disrupt our markets, tapered over a 15-year period. That will give all the markets the chance to adjust to the opportunity to share goods, moving in both directions. The Under-Secretary of State for International Trade, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith) will set out in more detail, if necessary, what those safeguards are, but they are there to show that we have been absolutely cognisant of this and determined to ensure that our farmers will not have the risk of a surge of produce.
Fay Jones (Brecon and Radnorshire) (Con)
The Secretary of State will know that I represent a large beef and sheep farming constituency, and there is nervousness in the farming community about what will happen over the next 15 years, but also a broad welcome for the deal, and I congratulate her on her efforts so far. Can she say a little more about what she and her Department can do across Government, working with the Department for Environment, Food and Rural Affairs, to make sure that there is real confidence in this sector over the next 15 years?
Anne-Marie Trevelyan
I thank my hon. Friend for her comments. To give her reassurance, all our trade negotiating teams have Department for Environment, Food and Rural Affairs teams within them. They are the experts from the UK Government, and they are absolutely at the heart of our negotiating teams not only for these deals, but for those we are working on now.
Part of the challenge—I understand the anxiety that has appeared, about which I hope the safeguards for these two deals have provided reassurance—is that these are of course the first two of a large number of trade deals. We are looking to accede to the comprehensive and progressive agreement for trans-Pacific partnership, under which we will have enormous opportunities for our agriculture producers to export to something like a £9 trillion marketplace. The Australian and New Zealand trade deals are the first two of many that will afford great opportunities for some of the finest products in the world. I think we are all concerned in standing up for our constituents and ensuring the opportunity to find new export markets for those goods.
Victoria Atkins (Louth and Horncastle) (Con)
My concern is not for the enormous farming conglomerates that we see across swathes of the countryside, but for the small tenant farmers in my constituency. They are a critical part not just of my constituency—which, incidentally, helps feed the country—but of our farming heritage. I think it is those smaller farmers that colleagues across the House are so concerned to understand, support and, if necessary, protect.
Anne-Marie Trevelyan
My hon. Friend is absolutely right, and that is why we have built into these first two of our trade deals these very clear and robust safeguards, so that there cannot in the early years be the sort of surges that could risk the success of our important tenant farmers. That is also why the work that the National Farmers Union and the National Farmers Union of Scotland do is so important in helping our farming communities.
I too have many small tenanted farms in my constituency, and this is the opportunity for them to work together and to work in the new markets that will be appearing thanks to the continuing new trade deals we will strike. This is about how we can get the maximum benefit not only as they produce for our own domestic markets, but, if they choose to do so, as they export some of the finest meat in the world to new and growing markets across the world.
These two trade deals are very much the first two anchor points, as it were, of a broad and wide set of trade deals that will afford such opportunities to all our farmers, from the large farmers that are very good at fighting their own corner through to—exactly as my hon. Friend points out—our small but incredibly important farmers across our rural communities. Their importance is not only in the food they produce, but in land management and, indeed, in the wider community, so that is at the heart of the plan.
As I say, the negotiating teams that the Department for International Trade take to these negotiations have at their heart teams of experts from the Department for Environment, Food and Rural Affairs, as well as from other Departments as required for each of the chapters in the trade deals.
Caroline Lucas
The Secretary of State is very generous in giving way. On that point, does she not recognise that the bottom line is that if we are rightly asking farmers to lead the way on more sustainable farming methods, yet at the same time allowing imports to come in that will undercut them—because they are not having to meet the same standards and are therefore cheaper—we are essentially handing farmers a knife to cut their own throats? It is simply not sustainable. Notwithstanding all her nice words about safeguards, do we not need to make sure that there are much stronger environmental regulations in these trade agreements so that we do not actually cut off the livelihoods of our own small farmers?
Anne-Marie Trevelyan
We have not only built in safeguards for that, but of course all the safety regulations in our own domestic requirements remain clear barriers to entry, so we are very clear that there will no dilution of or risk to any safety requirements on food.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
Is my right hon. Friend not surprised by the point made by the hon. Member for Brighton, Pavilion (Caroline Lucas), since New Zealand is led by a Labour-Green coalition that puts enormous weight on environmental sustainability? Therefore, the suggestion that this trade agreement would undermine those standards seems very odd.
Anne-Marie Trevelyan
My right hon. Friend raises an important point, which is that we have done trade deals with two partner countries that are very much of the same view as us on food safety standards, and we will continue to work with them. One of the beauties of these new trade deals is that they are very broad-ranging and much more ambitious, but are also cross-cutting in many areas. They are not static but have built into them the opportunity for dialogues in any number of areas. Where any business sector here or in those countries either has anxieties or wants to work together to grow those markets, we have factored such dialogues into the trade deals so that they will be able to do that.
To get on, if I may, over the long run our UK-Australia agreement is expected to increase annual trade by over £10 billion. This means a £2.3 billion boost to our economy and a £900 million increase in household wages. Beyond this, the agreement supports the economy of the future thanks to the first ever innovation chapter of any trade deal in the world. In addition, professional workers and those under 35 will enjoy new opportunities to live and work in Australia.
Turning now to our agreement with New Zealand, it will increase overall bilateral trade by 60%, providing an £800 million uplift to the UK economy on top of the £2.5 billion a year in bilateral trade we already do with our Kiwi friends. UK services and tech firms will gain deeper access to New Zealand’s markets, sustaining jobs in this country while also growing the high-value businesses of the future. Our analysis shows that this deal will provide real economic rewards to the 6,000 UK small and medium-sized businesses that already export goods to New Zealand, while opening new opportunities for those that have not yet begun that journey. Northern Ireland, Wales and Scotland will enjoy an annual economic boost worth over £50 million.
This Bill relates to a key element of our Australia and New Zealand deals: their measures to widen access to procurement opportunities for firms in both our countries. To give the House a sense of the possibilities on offer for UK businesses, the Australia deal will mean our companies can bid for Australian Government contracts worth around £10 billion a year, including major infrastructure projects such as road upgrades and railway constructions. The Railway Industry Association trade body recently praised the deal’s procurement aspects, saying that they will make it easier for our rail businesses to invest and operate in Australia. This Bill will ensure that our businesses can seize these opportunities as well as the free trade agreements’ broader benefits by putting us on the path to ratification.
Turning to the detail, this Bill is narrowly focused on enabling the Government to implement their obligations under the agreements’ procurement chapters. It will give the Government the specific powers they need to extend duties and remedies in domestic law to Australian and New Zealand suppliers for procurement covered by the free trade agreements and to amend our domestic procurement regulations so that they are in line with commitments in the Australia free trade agreement. The Bill will also give effect to potential changes over the free trade agreements’ lifetimes. They include implementing agreed modifications and rectifications to coverage and updating the names of Government entities
I assure the House that my Department has engaged constructively with the devolved Administrations throughout the Australia and New Zealand trade deal agreement negotiations, and I thank them for working so collaboratively with the Department. I am pleased that the devolved Administrations have indicated that they are satisfied with the outcome of the negotiations on the procurement chapters in both agreements. As procurement is a partially devolved matter, this Bill seeks a concurrent power. I remind the House that such powers are included in the Trade Act 2021, to allow the UK Government to make secondary legislation on behalf of Northern Ireland, Wales and Scotland when it is practical to do so.
Jonathan Edwards
I am glad there has been some progress. My understanding is that the Welsh Government were calling for concurrent-plus powers; have those been conceded by the UK Government?
Anne-Marie Trevelyan
I can update the hon. Gentleman: those discussions are continuing and our officials are continuing to work out the best way forward, and I will make sure they give him an update in due course. I also stress that we are committed to not normally using the concurrent power in this Bill without the devolved Administrations’ consent, and never without consulting the Administrations first.
While technical and narrow in nature, the Bill’s measures will help our businesses and citizens enjoy the enormous benefits offered by our Australia and New Zealand trade deals. Without this Bill we cannot bring these two landmark agreements into force. We want to unlock new trade for our businesses, support thousands of jobs throughout the country and provide a boost to our economy worth billions of pounds as soon as possible, so that we can strengthen both the bonds of commerce between our businesses and Governments and the bonds of friendship our countries share.
The Australia and New Zealand free trade agreements demonstrate in the most practical way what global Britain means to this Government and what we know the UK can achieve as an independent trading nation. This Bill is an essential step towards turning these FTAs’ extraordinary promise into firm reality. I commend it to the House.
Nick Thomas-Symonds (Torfaen) (Lab)
It is a privilege to open this Second Reading debate on behalf of the Opposition—in what is evidently the biggest political event of the day.
I welcome the fact that we are finally here for a longer debate on trade, albeit after the ratification of the two deals we are discussing, and let me say at the outset that the Labour party is in favour of securing trade deals with countries around the world that deliver for communities up and down the country. We are in favour, too, of deepening our trade links with our friends in Australia and New Zealand, and I want to put on record my thanks to the high commissions of Australia and New Zealand for their openness to dialogue and to providing information throughout the process.
The trade deals are of course significant in themselves, but they are also crucial because they set precedents not only for what other countries can expect when negotiating with us but for the process of scrutiny provided by this House, and, frankly, that process has been wholly inadequate. Ministers have hidden away rather than answer to this House for what they have negotiated. Ten months after the Australia deal was signed and seven months after the New Zealand deal was signed, the Bill in front of us today is only a short Bill that gives the Government the power to implement the procurement chapters in the Australia and New Zealand deals along with the associated provisions about regulations and the devolved authorities. So today’s debate is not about ratification, as the Government have avoided that.
In respect of the New Zealand trade deal, no Minister from the Department even came to the House to speak about it and open themselves up to questions; instead, they just issued a written statement, so no questions could be put. The cross-party International Trade Committee has rightly been scathing about the way the Government have handled scrutiny of the Australia trade deal and their premature triggering of the 21-day Constitutional Reform and Governance Act 2010 process without full Select Committee consideration being available to Members. When pressed on that, the Government then refused to extend the process. The current Secretary of State has by my count swerved eight—eight—invitations to attend the International Trade Committee.
The Government’s failure to be open to parliamentary scrutiny and make parliamentary time available for debate is both a completely unacceptable way to treat this House and a clear breach of the Government’s own promises.
Angus Brendan MacNeil
I am grateful to the right hon. Gentleman for mentioning the International Trade Committee, which I chair, and he highlights our frustration. Committee members have different political views, but they were united about the Government’s disappointing attitude to scrutiny. If we get these things right, more people win, but if we are slipshod and slapdash, more people lose.
Nick Thomas-Symonds
I completely support what the Chair of the Select Committee says. It is a cross-party Committee, so this is not a partisan point. Whatever has been negotiated by Ministers, they should be willing to open themselves up to scrutiny from this House.
As I said, this is also a breach of the Government’s own promise. Lord Grimstone wrote in May 2020:
“The Government does not envisage a new FTA proceeding to ratification without a debate first having taken place on it.”
But that is precisely what has happened, and I think we are entitled to ask why.
Why are the Government so worried about being held to account on their own trade policy? Could it be because the 2019 Conservative manifesto promised that 80% of UK trade will be covered by free trade agreements by the end of this year when the reality is far short of that mark? Could it be because that same manifesto promised a comprehensive trade deal with the United States by the end of this year and it is nowhere in sight?
Or is it because Ministers have been letting down farmers? Members need not just take my word for that; the right hon. Member for Richmond (Yorks) (Rishi Sunak), the former Chancellor—and, as of yesterday at least, a Tory Leadership candidate—made exactly the same point over the summer. No wonder the now Prime Minister failed to attend a hustings with the National Farmers Union last month; as the former Chancellor put it, that
“raises questions about her willingness to listen to the needs of farmers and the wider food industry.”
I agree entirely with the former Chancellor; I could not have put it better myself.
Anthony Mangnall (Totnes) (Con)
I congratulate the right hon. Gentleman on his book, which was a page-turner. Will he not take comfort, as I do, from what was said by the Prime Minister a few days ago to the National Farmers Union about wanting to see an improved scrutiny process?
Nick Thomas-Symonds
I thank the hon. Member for his congratulations on my biography of Harold Wilson; that is greatly appreciated. On scrutiny, if only the Prime Minister had held the trade brief in the past and been able to do something about it then.
Is not the truth perhaps that the Government are running away from scrutiny because they are failing to support exporters properly? The Opposition have been arguing that the Government are not doing enough to support exporters, and over the summer that became clear. The former Minister for exports, the hon. Member for Finchley and Golders Green (Mike Freer)—he intervened on the Secretary of State but is no longer in his place—appears to agree. He argued that the trade access programme is underfunded and said of it:
“We support too few shows, we don’t send enough business, our pavilions are often decent but overshadowed by bigger and better ones from our competitors.”
Perhaps it is therefore no surprise that there has been failure in the Department for International Trade.
We then have what the Secretary of State said about her own Minister for Trade Policy, who I think is still the Minister for Trade Policy today. She said:
“There have been a number of times when she hasn’t been available, which would have been useful, and other Ministers have picked up the pieces.”
The former Chancellor says that Conservative trade policy is letting down farmers, the former Minister for Exports says that the Government are not supporting exporters as they should be, and the Secretary of State is criticising the performance of one of her own Ministers. This is not the good ship Britannia delivering trade for global Britain; it is more like “Pirates of the Caribbean”, with a ghost ship manned by a zombie Government beset by infighting, mutiny and dishonesty. The calamity might have been mildly amusing were it not so serious a matter for our country’s future, with people across our nation needing a trade policy that delivers for them.
In other negotiations and future negotiations, countries will look at what was conceded in these negotiations and take that as a starting point. We already have a UK-Japan trade deal that benefits Japanese exporters five times as much as UK exporters. On the Australia deal, the Government’s impact assessment shows a £94 million hit to our farming, forestry and fishing sectors and a £225 million hit to our semi-processed food industry. On the New Zealand deal, the Government’s impact assessment states that
“part of the gains results from a reallocation of resources away from agriculture, forestry, and fishing”,
which will take a £48 million hit, “and semi-processed foods”, a £97 million hit.
The Opposition will press four issues in Committee: farming and animal welfare; climate change; labour standards and workers’ rights; and, as has been raised in interventions, the role of the devolved Administrations in the process of negotiation and ratification, and the protection of geographical indicators. Let me deal first with farming and animal welfare. Labour is proud of our farmers and the high standards that they uphold, and we are confident in British produce to be popular in new markets, but we also recognise the need for a level playing field for our farmers.
The Government claim that they are trying to mitigate the impact of the two deals with tariff-free access being phased in. In the New Zealand deal, there are tariff rate quotas and product-specific safeguards that last 15 years. Similarly, in the Australia deal, the phasing-in period on beef and sheepmeat is 15 years, but the quotas set by the Government for imports from Australia are far higher than current imports. As I have previously pointed out in the House, on beef imports, when Japan negotiated a trade deal with Australia, it limited the tariff-free increase in the first year to 10% on the previous year. South Korea achieved something similar in negotiations and limited the increase to 7%. But the Government have negotiated a first year tariff-free allowance with a 6,000% increase on the amount of beef that the UK currently imports from Australia. On sheepmeat, they have conceded a 67% increase in the first year of the deal.
It is not as if other countries have not done significantly better—they have—so why did our trade Ministers not achieve the same as Japan’s and South Korea’s? Why have our Ministers failed to ensure that Australian agricultural corporations are not held to the same high standards as our farmers?
The Government have agreed to a non-regression clause on animal welfare. To be clear, that does not mean equality of standards across the two countries—it is not fair competition. What will actually happen is that meat produced to far lower animal welfare standards will get tariff-free access to the UK market.
John Spellar
Has it not been a long-standing problem—even within the EU—that different animal welfare standards have allowed our farmers to be undercut? On beef, might it not be farmers in the Irish Republic who face greater competition? After all, why would people want to send meat to the UK all the way from Australia rather than get it from just down the road? Should we not be looking at supporting our industry domestically, particularly through public sector procurement?
Nick Thomas-Symonds
My right hon. Friend is right to raise what we should do domestically. He also illustrates another point. There is a history of trade negotiations, including on different standards of animal welfare, that Ministers could have taken heed of, sought to learn lessons from and put into these negotiations.
The now Prime Minister said that the Government had no intention of striking any deals that did not benefit our farmers, but the reality is that the vast majority of trade deals, which she trumpeted in her leadership campaign, were roll-over deals replicating existing EU agreements—not so much an exercise in driving a hard bargain as a national exercise in cut-and-paste with accompanying photographs on Instagram.
Perhaps it is no surprise that the Prime Minister’s own colleagues have been so critical of her approach to trade. The right hon. Member for Camborne and Redruth (George Eustice) as Secretary of State for Environment, Food and Rural Affairs said that he faced “challenges” in trying to get her to enshrine animal welfare in deals. No wonder the NFU said that it saw
“almost nothing in the deal that will prevent an increase in imports of food produced well below the production standards required of UK farmers”.
Jonathan Edwards
Is the right hon. Member aware of the article run by Politico in July indicating that the new Prime Minister was warned by her officials that the trade deals that she was negotiating with Australia and New Zealand would negatively impact on UK farmers?
Nick Thomas-Symonds
I am grateful for that intervention. Yes, it seems that the Prime Minister ploughed on regardless, despite the clear advice that she was given.
The concerns that we are discussing must be taken seriously. We need to hear so much more from the Government about how they will support our farmers—that includes smallholding farmers, as were mentioned in an intervention by the hon. Member for Louth and Horncastle (Victoria Atkins)—about the robustness of animal welfare protections and about how we can prevent our farmers from being sold short for doing the right thing and upholding high standards. Ministers also need to be clear about what support farmers can rely on in the next 15 years so that they can navigate the transitional period. Those matters will be pressed by the Opposition in Committee.
Given the Government’s poor record in standing up for UK interests in negotiations, perhaps it is no surprise that Australia’s former negotiator at the World Trade Organisation said:
“I don’t think we have ever done as well as this”.
Is it any wonder that the National Farmers Union said, of the Australia agreement,
“there is little in this deal to benefit British farmers”?
As we consider the impact on our agricultural sector, why are the Government promising a monitoring report about two years after the agreement comes into effect and every two years thereafter? Why not every year? They could do that, particularly given the level of concern in our rural communities.
I turn to climate change. I realise that the Conservative party has a long-standing reliance on conservative allies from Australia, not least with the appointment of Tony Abbott to the trade board, but surely it has not signed up to some of the more extreme views that he and his colleagues hold on climate change, including that it is “probably doing good”. The current COP26 President, the right hon. Member for Reading West (Alok Sharma)—
Nick Thomas-Symonds
On 1 December 2021, in this House, the right hon. Gentleman said that the Australian deal would reaffirm
“both parties’ commitments to upholding our obligations under the Paris agreement, including limiting global warming to 1.5°.”—[Official Report, 1 December 2021; Vol. 704, c. 903.]
Frankly, I would have cheered as the hon. Lady did if, a few weeks later, the deal had actually contained what the right hon. Gentleman said it would. However, the explicit commitment to limit global warming to 1.5° was not in the deal, despite what had been said. What went wrong in the final couple of weeks of the negotiation? Did Ministers simply give in for the sake of getting a completed deal? It is a lesson that tariff-free access to our UK market should not be given away easily. Looking at the concessions made by the Government in those final weeks, are people not right to worry that the Government are more interested in the press release announcing the completed deal than they are in standing up for UK jobs and livelihoods? It surely cannot be right that, as across the world we debate the devastating impact of climate change, we are not capturing that fully in deals like this. Not only is it dangerous to the planet, but it fails to recognise the huge business and export potential that climate change technology, innovation and services can create. It is not only environmentally unsound, but it also makes bad business sense. I implore Ministers to speak again with the new Administration in Australia to see what more can be done to take joint action on climate change, and to put it at the front and centre of the very well established and historic relationship between the two countries. I am sure that the recent change in Government in Australia will be beneficial in enabling that to happen.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
In addition to climate change and the other areas that my right hon. Friend raises, the British Medical Association and the royal colleges are still very concerned about the impact on our NHS of the new trade deals being negotiated, with profit rather than patients being the prime focus. Is he reassured by the passage of the Bill?
Nick Thomas-Symonds
My hon. Friend is absolutely clear that our NHS should never be on the table in any trade negotiation, but that is one of a number of significant issues that could have been properly raised and ventilated had there been a proper process of scrutiny.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Does my right hon. Friend share my concern that the Bill, not just the trade treaty, allows, through the negative procedure, Ministers to change procurement rules? We can say here that the NHS is not for sale and not on the table, and Ministers can say that, but this House does not have a cast-iron guarantee that we would have a vote before any change in procurement rules. An amendment to the Bill to allow that to be done through the positive procedure would be one commitment the Government could give to ensure Parliament gets a cast-iron guarantee.
Nick Thomas-Symonds
My hon. Friend is absolutely right. If the Government do not give that commitment, we will bring forward an amendment in Committee to seek that commitment.
John Spellar
Can we slay this particular red herring, which was also mentioned in relation to the US trade deal? It is not about privatising the NHS. All the Americans said, and in this they were right, was, “We are not saying what you should do with the health service; we are saying that if you decide to privatise it”—which we should not do—“then we want to be treated as equal partners.” That has nothing to do with trade; it is to do with the Government’s health policy. We should not mix up the two, following a political campaign on it.
Nick Thomas-Symonds
It is not the threat of the American Government to our NHS that worries me; it is the threat of the Tory Government to the NHS. My right hon. Friend is absolutely right to make that distinction.
Nick Thomas-Symonds
I will give way once more and then I will have to make some progress.
Matt Rodda
I very much appreciate my right hon. Friend giving way; he has been very generous with his time. He mentions the threat of the Government to British agriculture—he is absolutely right on that—and the threat to the environment in some of the measures. Does he agree that there could also be risks for many small exporting businesses who face a series of hurdles to get over because of the Government’s trade policy?
Nick Thomas-Symonds
My hon. Friend is absolutely right to raise the position of small businesses. Support for small businesses, particularly exporters, is something on which the Government really have to do far better.
Nick Thomas-Symonds
I will take one more intervention and then I will have to make some progress.
Katherine Fletcher
I am very grateful. I speak because I am genuinely passionate. I do not know how many Members have actually exported to Australia as a small businessperson, but I have. The trade agreement makes it easier and better. Does the right hon. Gentleman agree?
Nick Thomas-Symonds
I sincerely hope it does; absolutely. I am glad I took the intervention, because of the hon. Lady’s experience of exporting. I am sure she agrees with me that businesses have different amounts of resources to spend on supporting their exports and getting information about markets around the world, and that the Government should stand by all those exporters and make that process as easy as possible. The trade deal is, of course, a step forward, but we also must support our businesses in taking advantage of the opportunities she is speaking about.
Returning to climate change, we really must use future trade deals to drive forward this agenda and recognise the mutual benefit of tackling the biggest challenge of our generation.
On the third issue, labour standards and workers’ rights, Ministers need to go further, especially given some of the rhetoric briefed to the newspapers about bonfires of workers’ rights, and ensure that the Bill will not undermine workers’ rights, particularly in relation to Australia. The TUC said, in relation to the Australia deal, that the agreement
“does not contain commitments to ILO core conventions and an obligation for both parties to ratify and respect those agreements”,
and that it provides
“a much weaker commitment to just the ILO declaration”.
That is a profound error. We should not be setting off on the road of establishing new trade agreements across the globe that sell short our workers here, or indeed elsewhere. A race to the bottom benefits no one. Put simply, it is self-defeating to think that Britain would prosper via deals in which labour standards are a trade-off. We should be promoting the highest standards here and around the world, in the interests of our workers here and as a force for good around the world. It is what a Labour Government would do, working with all trading partners, including Australia and New Zealand, to drive up protection for workers and to have a trade policy that truly delivers for working people.
On the devolved Administrations, an issue raised on a number of occasions, the Government have spoken about trade benefiting all parts of the United Kingdom. Central to that, however, is taking into account the strengths of different nations and regions, and listening to their democratically elected representatives. That needs to be done in overall trade policy, in the negotiating mandate and negotiation process, and in ratification. That could be—I say this to the Secretary of State—formalised in a concordat or agreement on how the Government interact with the devolved Administrations. I urge the Secretary of State to look at that. We are also calling for the UK Government to undertake nation-specific impact assessments on trade deals. That would ensure a clear understanding of the implications and opportunities for the whole country, and also ensure that the deals can best align with the economic strategies of the devolved Administrations.
There is also—if I may just mention it for a moment—an issue around geographical indicators. As the International Trade Committee put it, the
“Government has failed to secure any substantive concessions on the protection of UK Geographical Indications in Australia.”
We should be backing our fantastic national producers, from Stilton cheese to Anglesey sea salt and Scotch whisky, and not failing to achieve concessions in this way.
Nick Thomas-Symonds
Indeed.
I will not hold the Government to impossible standards and of course there are aspects of the deals that I welcome. In particular, the provisions to advance women’s economic empowerment across the New Zealand agreement are to be welcomed. Chapter 25 enables collaborative work between the UK and New Zealand to support women business owners, entrepreneurs and workers to access opportunities for international trade, complementing other areas, such as small and medium-sized enterprises—mentioned in an intervention—services, procurement, labour, development and digital trade. I was pleased to meet the Prime Minister of New Zealand on her recent visit, and I know that the New Zealand Government share ambitious climate goals and the need to uphold workers’ rights. However, after looking at the two deals and the differences between them, I observe that they seem to be more a consequence of the political persuasion of the Governments with whom Ministers here were negotiating, rather than a deliberate strategy on the part of Ministers.
On procurement, the Government will need to show how businesses here can bid in Australia and New Zealand. In particular, support needs to be given to facilitate the participation of small and medium-sized enterprises in the procurement process and to promote the use of paperless procurement. Suppliers must have easy access to information about procurement opportunities. Words and promises on that are not enough; it has to be made a reality.
Lloyd Russell-Moyle
Is my right hon. Friend concerned about the fact that we should allow British authorities to put conditions on procurement that pertain to labour rights, trade union rights, local recognition and the employment of workforces at a rate that is higher than the national minimum wage? It is important that the Government do not provide foreign companies with easier access to bid for British contracts than that which British companies would have.
Nick Thomas-Symonds
My hon. Friend makes two very good points: first, we should ensure that our British firms have the support that they need to compete in the procurement process; and secondly, this should not be some sort of cloak beneath which there is a race to the bottom on workers’ rights. Both those things are important.
The concerns that have been raised about these two deals and the process of scrutiny amount to a problem with the Government’s approach to trade policy. There is no core trade policy and no clear strategy or direction. That criticism has been echoed by the International Trade Committee.
There has been a lot of talk from the Conservative party, but the delivery on trade agreements has been noticeable by its absence. There is no US trade deal in sight, and we await the India deal—as promised by the now previous Prime Minister—and the meeting of the target of 80% of UK trade being covered by FTAs.
Anthony Mangnall
Does the right hon. Member recognise that we have started negotiations on the CPTPP and with the Gulf Co-operation Council, and that we have started negotiations and to look into the Canada agreement? It is not technically that fair to say that we are not ploughing ahead with signing as many trade deals as we can.
Nick Thomas-Symonds
I am holding the Conservative Members to the standard that they promised in their manifesto. It is not the standard that I have set, but the standard that they set when they went to the electorate in 2019.
Is not the problem that, for too long, Britain has been led by a directionless and, frankly, distracted Conservative party? Conservative Members spent months propping up a discredited Prime Minister. They decided to leave him in office over the summer while they fought among themselves, leaving people up and down the country facing economic devastation.
A dynamic trade policy that aligns with a clear industrial strategy is vital to boosting our appalling levels of growth and averting recession, yet we find that the Australia deal does not even mention the specific target on climate change, despite that being one of the great challenges of our generation.
As an Opposition, we will of course not vote down this short Bill. However, if we were to attempt to change the deals that have already been agreed, or if anyone went back on their word on them, that would further sully our international reputation, which, frankly, has already been badly damaged by the conduct of the Conservative party. However, we will push a number of amendments in Committee to support our farmers and to ensure that exporters have the support they need. The Government must urgently learn lessons from where things have gone wrong in these negotiations.
Lloyd Russell-Moyle
An additional amendment that might be useful would be to change the requirement for secondary legislation so that we enable the Secretary of State to introduce it only when they “must” comply according to the trade deal and not at their whim, whereby they “can”. That change from “can” to “must” will be vital to ensure that there is not an open door for Executive action.
Nick Thomas-Symonds
My hon. Friend makes another very good point about the inadequacies of the scrutiny process.
Access to British markets is a huge prize for many other global economies. The Government have to stop selling us short and put in place a proper, core trade strategy that will allow our world-leading businesses to thrive and, for once, truly deliver for communities across the country.
Mark Garnier (Wyre Forest) (Con)
I thank the shadow Secretary of State for International Trade, the right hon. Member for Torfaen (Nick Thomas-Symonds), for his speech. Broadly speaking, I agree with a great deal of what he said—although not everything—and I think that his speech will probably set the tone for this debate, which is less about the content of the trade deal and more about the process of scrutiny of it. As a member of the International Trade Committee, I have been heavily involved in the process. It is no easy job to consider several tens of thousands, if not hundreds of thousands, of pages of detailed documentation. The abridged version comes to eight volumes, so it is quite a challenge.
As a basic principle, I very much welcome the fact that we have signed these two trade deals. It is absolutely fantastic that, having got Brexit done, we are now delivering what Brexit has to offer. However, there will be an interesting argument, perhaps in relation to some of our constituents, that having taken back sovereignty from the European Union, we cede a bit of sovereignty every time we sign a trade deal with other countries around the world. That illustrates the point that we have taken back control from the EU, but we will give a bit of control to the CPTPP or the GCC. That is an interesting debate, but it is not what we will talk about today.
The trade deals are good. As we heard from the Secretary of State, on the Australian side, there will be an increase of £2.3 billion in economic activity, with increased income of £900 million to people working who benefit from it. As for New Zealand, there will be an increase in economic activity of £800 million, with increased income of £200 million for people working in the relevant sectors.
These two trade deals are incredibly important, because they are the first trade deals that we have signed ab initio since leaving the EU. All the trade deals that we have done until now have been roll-over trade deals, aside from the Japanese trade deal, which was a quasi-roll-over deal. When we were leaving the EU, it was incredibly important in the Department for International Trade—having been a Minister in that Department, I was very aware of what was going on—that we did not interrupt trade with all those countries around the world. That is why the shadow Secretary of State is right to say that they were cut-and-paste deals, because their objective was to not interrupt trade. I suspect that we will come back to some of the trade deals and renegotiate them, so that we get better outcomes for UK businesses.
Anthony Mangnall
I think that my hon. Friend and I met when the South Korean Trade Minister came to speak to members of the International Trade Committee. He said that the benefit of the roll-over trade agreement that the UK has with South Korea was that we could look to improve it. Indeed, South Korea had sent a letter to the Department for International Trade in August last year and it received a response shortly afterwards in September, and discussions were already under way in the Department, whereas the letter that it sent to the EU warranted no response. The roll-over deals already provide the opportunity to improve on them and, in the case of South Korea, that is happening. Does my hon. Friend think that that is what the Opposition should look at when it comes to trade agreements and roll-overs having real value?
Mark Garnier
Yes, I agree. It is incredibly important that we have a basis on which we can improve and that is absolutely the case. We would not be able to improve on these deals if we did not have them in the first place.
The Japan deal was a relatively easy one to scrutinise, because it was basically about looking at whether we had secured better terms than the European Union, based on the fact that we all started at the same time with that deal. It was a cut-and-paste deal with added lines, but the important point is that it was a modification of a roll-over deal.
These two deals are massively important, because there are two fundamental things that we need to consider. First, what are the UK Government’s negotiating objectives? We have never really understood what they are. A number of documents have laid out bits and pieces here and there, but there has never been a cohesive document to tell us what we are negotiating against or how we are doing relative to the outcome that we want.
The second important point is that this is the very first time that we are looking at the process of ratifying a trade deal, and it falls short of what we really need. I welcome this debate, which is an incredibly important one, but it is not the debate that we should be having. This is a debate about enabling certain legislation to ensure that the trade deal goes ahead. The Opposition have already said that they will support the Bill, but in the unlikely event that the Bill did not pass, that would leave us in breach of our international obligations under the trade deal. The trade deal has happened, so we would now be in trouble if we did not pass the Bill. It is incredibly important that we understand that this is an enabling Bill; it is not about how we scrutinise the deal itself.
Lloyd Russell-Moyle
The hon. Gentleman highlights the point that we have passed CRaG before passing the enabling legislation, which is quite an unusual thing to do; normally in this country we pass enabling legislation and then ratify treaties. Does he think that perhaps the Government should have done things in a different order to ensure that the right scrutiny would happen and that there would be no risk, not even a minuscule one, of our breaching international agreements?
Mark Garnier
My International Trade Committee colleague gives me a fantastic prompt for the next part of my speech, which is about that part of the CRaG process. The CRaG process allows 21 days in which Parliament can hold up the process of ratification of the trade deal. In the lead-up to the recess, the International Trade Committee was desperate to get more scrutiny. We went out and spoke to huge numbers of interested parties such as the NFU, we read countless pages of written submissions, we heard from experts and all sorts of people, and we went through the whole thing, but it was not until the final days before the recess that we heard from any Ministers.
The Secretary of State, to her absolute credit, came and spent some five or six hours giving evidence to the International Trade Committee, but it was too late for the Committee to publish a full report or get a debate in Parliament. My hon. Friend the Member for Totnes (Anthony Mangnall) went to huge efforts to secure a debate on the two trade deals in order to hold back, if necessary, the ratification by 21 days under the CRaG process. We even applied to Mr Speaker for a debate under Standing Order No. 24, but unfortunately that debate was not allowed.
That means that the CRaG process is completely meaningless. If we cannot get a debate in Parliament, there is no way under the CRaG process to hold up—admittedly only by 21 days—the ratification of the deal. We cannot extend the process of scrutiny to get better scrutiny of the deals. That is a real problem, not just for these trade deals, but for Parliament and for its ability to scrutinise the Government properly under the CRaG process.
This is an incredibly important debate, because Parliament is an institution that learns by its mistakes, and we have made a lot of mistakes in the process of scrutinising these trade deals. We cannot afford to continue making mistakes. I am very disappointed by what has happened.
Angus Brendan MacNeil
I pay tribute to the hon. Gentleman: if people are not paying attention in their offices or wherever, what he says is a very gentle reminder to the Government and to Government Members that things could have been done better. He and I see scrutiny from very different political angles, but the point, which he makes eloquently and well, is that the scrutiny could have been far better than it is. I share his frustration, as do the hon. Members for Totnes (Anthony Mangnall) and for Brighton, Kemptown (Lloyd Russell-Moyle)—we are all utterly frustrated. I praise him as a parliamentarian: he is in perfect flow and is doing an excellent job. This is a very important point, and I hope that Parliament will listen, because it comes from all sides and it probably comes best from him.
Mark Garnier
I thank the Chairman of the Select Committee for his kind words. In the spirit of collaboration, I think there is an opportunity for us all to work together. The Department for International Trade has reached out to us, and we have a visit to the parliamentary team coming up in the next couple of weeks.
There is a problem somewhere, but we are not too sure what it is. I was a Minister in the Department, and I found that the civil servants we worked with were second to none. As one of the Prime Minister’s international trade envoys—I believe I am on my fourth Prime Minister as a trade envoy—I continue to work with civil servants in the Department. It is important that we get this right. My experience with the Secretary of State is that she has been incredibly generous with her time and has been very engaging. I believe in her sincerity in trying to move things forward, but something fundamental has gone wrong with the interaction between the International Trade Committee and the Department. I do not know what it is, but we need to find out.
Something has also gone wrong with the process of scrutiny of international trade deals and with the CRaG process, so I urge the House to think hard about how to ensure that they run smoothly. At the end of the day, we have left the European Union and we ain’t going back. These are exactly the opportunities that are presented to this country. We must get this right. We must take advantage of global Britain.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
This is a time when people and businesses across the nations of the UK are facing an absolute crisis. When it comes to our responsibilities for trade, it has never been a more important time to look at the detail and impact of the decisions made on their behalf about things like trade.
We should have the ability to look at the details. We should have the ability to scrutinise these things, see what the impact is, find out the granular effect and find out what is going to happen in Scotland, Wales, Northern Ireland and the regions of England. We should have details on all those things in front of us to make the correct decisions, but of course we do not. What we have today is this debate to approve the technical details to allow this trade Bill to pass. That is simply not acceptable: it is not what was promised, and it is not what people and businesses facing crisis deserve or want.
It is not too late for an epiphany. It is not too late for the Secretary of State to go away and say, “You know all those things that were said by all the various parties? We will take them on board today and get something done.” I am not holding out much hope, but it is not too late. Perhaps there will be a bit of listening.
Let us look at what the Government are publicising as the benefits for the people and businesses who are going through these pressures just now. They say that we will be able to get machine parts—I am sure that that will be good for some people—and Tim Tams, surfboards and boots. I am sorry, but none of my constituents is writing to me about the lack of availability of those kinds of items at the moment. There is a positive for Scotland—the export of Scotch whisky to Australia will be a benefit—but let us not forget that that market is three times smaller than the market for Scotch whisky in France, for example. All in all, there is a UK GDP opportunity of 0.02% with Australia, and not even that with New Zealand.
Angus Brendan MacNeil
As my hon. Friend mentions whisky, it would be remiss of me not to take the opportunity to stand up. It should be noted that one of the things we highlighted was that Australia has to get its definition of whisky together. That is a real problem.
Drew Hendry
Indeed, and I want to return to that point later. My hon. Friend makes a very good point about details and description.
The Government are trying to sign away the downsides of the deal—they are basically saying that there are no downsides—but when we listen to people who are actually affected, it is not the downsides that they are worried about; it is the cliff edge. First among them are the farmers in Scotland and across the other nations of the UK. This deal betrays Scottish and UK farmers—that is not my rhetoric, but a quotation from National Farmers Union president Minette Batters, who also talked about the detail causing “irreversible damage”. She was joined by Phil Stocker, the chief executive of the National Sheep Association, who said that the deal had “betrayed the farming industry”. Martin Kennedy, the president of the National Farmers Union of Scotland, has said
“Our fears that the process adopted by the UK government in agreeing the Australia deal would set a dangerous precedent going forward have just been realised.”
Those farmers face a flood of lower-quality, mass-produced, cheaper cuts of meat into UK markets.
David Mundell
Is the hon. Member aware that the biggest concern expressed by upland farmers in Scotland about the future of the sheep industry relates not to these trade deals, but to the SNP Scottish Government’s plans to allow tree planting over vast areas of agricultural land that is currently cultivated for livestock?
Drew Hendry
The right hon. Member is skating over the fact that the Tory Government have neglected their tree-planting duties in terms of their actions on climate change. [Interruption.] Perhaps—if he will stop chuntering from a sedentary position—he should also have a conversation with Irish farmers to see what their position is on this matter.
As we have already heard, but I will now repeat it, the Government’s own trade impact analysis shows that the Australia deal will mean a £94 million hit per year to farming, forestry and fishing, and the New Zealand deal will mean a hit of £145 million to agriculture and food-related sectors. The New Zealand media have been reporting that New Zealand farmers are jubilant about the deal. They are nonplussed; they cannot understand it; they are baffled by this, because, as they have pointed out, the benefits to the UK are negligible.
The UK Government are kicking Scottish farmers while they are down. Farmers are gasping for air, and they already face spiralling uncapped energy costs, crops rotting in fields owing to a lack of pickers, rising diesel costs, the loss of EU farming subsidies, and rocketing fertiliser costs. I can assure the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) that the sector in Scotland will not forgive this. Food and drink manufacture is twice as important to the Scottish economy as it is to the UK economy. As we have heard, even the recent Tory Chancellor, who lost the race to the new Prime Minister by the slimmest of margins, has said that the deal is bad for farmers.
The news for consumers is, of course, not much better. Because we do not know what the split is across the nations and regions of the UK, we cannot say what the impact on people will be, but the best that the UK Government can come up with as a justification for the deal is a prediction that UK households will save £1.20, on average.
Drew Hendry
I will in a minute.
Perhaps households can get together to buy a single cup of coffee at Starbucks if they pool their resources—
Drew Hendry
Or a unit of electricity, as my hon. Friend has chimed in to suggest.
Drew Hendry
I have said to the right hon. Gentleman that I will give way, but not at this particular moment. If he does not mind, I will continue with the point that I was going to make.
I have just talked about the risible benefits, in this crisis, to UK households. Perhaps the Government are counting on the fact that farmers, and others who are losing out, can drown their sorrows with 20p off a bottle of Jacob’s Creek. Now I will allow the right hon. Gentleman to intervene.
John Spellar
I thank the hon. Gentleman. Can he make it clear to us whether he thinks we should have free trade agreements on agricultural products with any countries? If he thinks we should have them, why should we not have them with our great ally Australia? If he thinks we should not have such agreements with Australia or New Zealand, which countries does he think we should have them with?
Drew Hendry
I think we should have free trade deals with countries—of course we should—but we should take into consideration whether we will win or lose from them. Those deals should be scrutinised by the parliamentarians who are elected to scrutinise them on behalf of their constituents.
Angus Brendan MacNeil
Perhaps the right hon. Member for Warley (John Spellar) misunderstands the idea of free trade. None of it is free; it is just that there are various degrees of restriction. How restricted or unrestricted we make that trade is the issue at hand. No one is opening trade carte blanche—certainly not the Australians. They may come before Select Committees and tell us that they are very open, but they are not, as we see from the various areas in which they are restrictive. Australia may say that it believes in free trade, but it does not practise free trade as we understood it in the free market and the single market of the European Union. That is not happening anywhere.
Drew Hendry
Indeed; my hon. Friend has made his point very well. However, this is also about the pluses and minuses of what is signed, and what the Government are prepared to sign away just for the purpose of getting the deal done. For example, it was noticeable during the leadership contest that the newly elected—by our Tory Members—Prime Minister again refused to agree to enshrine animal welfare and environmental standards in trade deals, so intent was she on signing away Scottish farmers’ livelihoods, as this is the key factor in imports undermining domestic products on price. As it stands, the UK has placed no—none, nada, nil, zilch—environmental conditions on agricultural products that it will accept into the UK. Of course, it is not too late to set robust core standards for all food to be sold in the UK, and I will wait to see if there is a response on that.
Carla Lockhart (Upper Bann) (DUP)
The hon. Gentleman will share my fear that this trade deal will allow the import of food products produced in ways that would be illegal here—for instance, on land deforested for cattle production, or through systems that rely on the transport of live animals—and that such an outcome will disadvantage UK producers, penalising them for abiding by better standards.
Drew Hendry
Indeed, and of course we should have the promised opportunity to go into the detail of this. As FarmingUK has pointed out,
“The Australian-UK trade deal has gone through its scrutiny phase without MPs having a chance to have their say on behalf of constituents.”
Unless this Government take action, we will see the opportunity for imports, as a result of these deals, of meat from animals raised on land that has seen 1.6 million hectares of deforestation, and from animals raised in sow stalls, intensive feed lots and battery cages and treated with steroids or antibiotics. As for pesticides, even the UK Government’s own advisers have conceded that pesticide overuse is a valid concern. Less than half the 144 highly hazardous pesticides that are authorised for use in Australia are allowed here. Many of those in Australia are of the bee-killing variety. Food standards are devolved to the Scottish Parliament, but, of course, the Scottish Parliament has no powers to stop imported products on the basis of how they are produced. I will say more about the Scottish Parliament in a while.
During the summer, the record hot temperatures caused by climate change should have caused the Government to think about the detail of trade business and how to incorporate protections and enhancements to ensure that we took measures to tackle that, but no. As we have heard, despite Australia’s huge reliance on coal and its less than impressive record on climate change, there is no reference to coal in the final text. Perhaps that is no surprise, given that Tony Abbott was involved in the process. This could and should have been pushed. The UK Government must go back and demand that specific parts of the Paris agreement references are reinstated in the pages that the UK removed just to rush this deal over the line.
Anthony Mangnall
The hon. Gentleman is making an interesting point about climate issues and accords. The problem that I have with the suggestion he is making is that if we asked every country to put those terms into every trade deal, we would not end up with the eight volumes and 2,000 pages that we had to go through in the International Trade Committee. Australia and New Zealand have signed up to the Paris climate accords. They have come to agreements in COP26. They have looked at this stuff, and they stand by those treaties, those agreements and those statements. There is not really a requirement to put them into the trade deals, because those countries are already committed to them on an international stage.
Drew Hendry
I am disappointed that the hon. Gentleman chose that for his intervention, because I have a great deal of time for him; he is a good speaker and very knowledgeable on this subject.
If we have seen one thing from this summer, it is that it should have been a wake-up call—an alarm bell to say that this is important enough to put into the detail of the agreement. The Scottish Government advised the UK Government to prioritise the Paris agreement in any deal with Australia, but as with all the Scottish Government’s other attempts to persuade the UK Government to add protections for Scottish consumers and businesses, including on the issue of climate, they were treated more as a nuisance than as a partner in this process.
There was no specific consultation on the content of the Bill, but—surprise, surprise—it includes provisions that constrain the exercise of powers afforded to Scottish Ministers and devolved competencies covering procurement. The Scottish Parliament’s legislative consent memorandum document states that
“there is fundamentally no reason why the UK Ministers need to hold this power in relation to devolved Scottish procurement.”
This Bill gives secondary legislation empowerment to Ministers in this place to undermine devolution without being required to seek further consent.
As if that were not bad enough, this Bill coincides with a deal that has just been signed by the EU and New Zealand. I note that this was not referenced by the shadow Secretary of State, the right hon. Member for Torfaen (Nick Thomas-Symonds), in his excellent speech. That deal has better terms and stronger farming conditions and safeguards than the UK managed to negotiate. In the first year, the UK will allow 12,000 tonnes of New Zealand beef into the UK, while the EU will restrict it to 3,333 tonnes across all 27 countries. By year 15, the UK will allow 60,000 tonnes into the UK, while the EU figure will be capped at 10,000 tonnes, again across all 27 countries.
Angus Brendan MacNeil
The data that my hon. Friend has just read out helps to make a point. Although those two deals are both described as free trade agreements, anybody can see from those bits of data that the deals are very different. When people talk about free trade, they must remember that the devil is absolutely in the detail and that the headline usually bears no relation at all to what is going on or to the different levels of restriction.
Drew Hendry
Indeed, and with the safeguards and other measures in the EU deal, there is a similar position for sheepmeat, for example. There are also protections for butter and cheese. I am sure that that was the new Prime Minister’s favourite subject a while ago, but maybe she has moved on from dairy products to something else. As has been said, there are no agrifood geographic indicator protections in the UK deal—for example, for Scotch beef or Scottish salmon—but the EU has its own protections enshrined.
Let us recap the prospectus for Scotland. This is the UK Government checklist for Scotland: a betrayal of our farmers and crofters; job losses and reduced income in food production, forestry and fishing; no protections on environmental or animal rights; no inclusion of the Paris agreement requirements on climate change; and a further power grab on the Scottish Parliament. And, to top it all, a much worse deal than the EU. This UK Government continue, every day they are in power, to make a stronger case for Scottish independence than even we can.
Sir Paul Beresford (Mole Valley) (Con)
I am not a member of the Trade Committee. I have listened to the technicalities with considerable interest, but having looked at the volumes that have been referred to, I shut them down and turned away. My interest in this, which I must declare, is—as my accent gives away—the fact that I am of dual nationality. I have a New Zealand passport and a United Kingdom passport. When I am in New Zealand, they all think I am a pom, and when I am over here most people think I am an Australian, which is an insult if ever there was one. My interest in this is not quite emotional, but it goes back to where I came from and where we are going, which I hope will be a vast improvement.
This new trade deal puts all three nations more or less back to where we were before the United Kingdom entered the common market. When we entered the common market, the people of the antipodes—Australia and New Zealand, for those who do not know the word—lost many of the trading advantages that they had at the time. To put it mildly, they were very upset. Many Australian and New Zealand professionals, especially in the medical and paramedical services, were effectively discouraged from emigrating to this country. It was very sad, because the net effect was that some of the brightest professional people from those countries—I can add lawyers and accountants to that list—left not for this country but for the United States. When I was chairman of my old university alumni, I ran a big dinner in the House of Commons to which we invited anybody and everybody from the university. Thirty high-class New Zealand professors came over from the United States. They would have come here, except for the restrictions. So this is going to be a really interesting side effect.
When I go back to Australia or New Zealand—I have not been back to Australia for quite some time, but I have been to New Zealand—I am shocked to see the streets and shops full of Asian vehicles and goods. The British cars that filled the streets in my youth are not there, because of the tariffs that were put on them. We have to change that. I look forward to their return, and not just on the streets, because I come from a farming background. When I go to the farms there, there are no Land Rovers; they have Mitsubishis and other vehicles like that.
Angus Brendan MacNeil
Tempted though I might be to sell the hon. Gentleman my late father’s 1954 Morris Minor, which is still in my shed in Barra in the Hebrides, I just want to say that I think this is a worldwide phenomenon. I remember Land Rovers being about in my youth, but the vehicles my neighbours are driving now are generally Japanese, Korean and far eastern 4x4s, so I would tell the hon. Gentleman not to be too despairing: this might just be a global vehicle choice.
Sir Paul Beresford
I am sorry that the hon. Gentleman mentioned a Morris Minor, because as a student I was taken backwards and forwards between university and home in a Morris Minor and it was the most hideous vehicle I had ever been in.
Sir Paul Beresford
I know exactly why the car is sitting in his shed. It is because no one will take it out.
The opportunity is there. The last time I was in New Zealand, I was talking to people about British cars and I mentioned the word “Jag”. They all said, “I would love a Jag, but they are too expensive.” That is what this trade deal is going to turn around. Most New Zealanders and Australians would like to buy British. It still has that mark, and I am not just talking about cars. I have not seen an Aga stove in a New Zealand home for ages, but they would go right into the farming community given half a chance. The removal of tariffs and the consequential price drop will encourage the sale of our vehicles, and much more than that.
My right hon. Friend the Secretary of State mentioned small firms. I have a small firm in my constituency that I visited recently. It has only been going for three or four years. It is run by two or three people, and it produces gin. It is called Silent Pool, and it is becoming a niche and famous gin. When they started, they filled the bottles by hand. Now they have increased production such that it is all done by machinery. They have a huge warehouse on the edge of the property, packed with hundreds—if not thousands—of tonnes of gin, on pallets, wrapped ready to be exported to Australia. They are an example of what this trade deal can do for small firms in this country, because the British people have regained their ability to be entrepreneurs, and to work and to push forwards.
I am interested in the comments made from the Scottish Front Bench. Going back a couple of generations, the peoples that emigrated to Australia and New Zealand were Scots and English, almost entirely. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) might recall that there is a place called Dunedin, the fourth city in New Zealand. I understand—although I will probably be corrected instantly—that the name means “new Edinburgh”. People there would be scathing at his comments about the absence of such a link. Even if they are second or third-generation, it is a truly Scottish town, and in the middle of the Octagon in the centre of the town they have a statue of Rabbie Burns. With good Scots thinking, he is placed there with his back to the church, and faces the pub. How Scottish can you get?
I am a member of the UK National Farmers Union, and this is where I have had some wobbles. In a Westminster Hall debate on free trade with Australia and New Zealand, I mentioned—as has been mentioned here time and again, and indeed my right hon. Friend the Secretary of State for International Trade covered it—that free trade cuts both ways. We have, in the main, an excellent UK agricultural industry, although it is hampered somewhat; but we must recognise, as has been recognised by speakers today and will be again, that Australia and New Zealand are formidable agricultural giants.
I have many farms in my constituency. The biggest dairy farm has about 350 cows and my biggest sheep farmer has perhaps 1,000 sheep after lambing. Two dairy farms that I know of in the north of the south island of New Zealand are milking 1,500 and 2,500 cows twice daily. In the farm that I left in the high country of Central Otago—which is a bit like the hill country of Scotland, with hill farming—after lambing we had 50,000 sheep. The difference is staggering. The idea that has been put forward by my right hon. Friend the Secretary of State for International Trade of staggering and layering the approach must be the right one.
The difference for farmers in New Zealand is that they are free to farm. I was really disappointed and cross with the comments on the standard of farming and of animal welfare in New Zealand. It could not be higher; it is equivalent to here, but they do not work under all the restrictions, regulations and so on that our farmers here and in Scotland do—many of which come from the EU, and could be removed now that we have come out of Europe. So the chance must be taken now, as we move forward, as these layers change, for the Government to work with the NFU and our farmers—they are not always the same—to ease the strain and make sure that our farmers can farm better and freer.
The UK needs its farmers and food producers. The potential competition from Australia and New Zealand is an imperative that we must look out for, as my right hon. Friend the Secretary of State said, but we must use the time we have, because we must keep those farmers.
I am delighted with the trade agreement—obviously, for reasons of my background—and hence with the Bill. I will not read all seven volumes of the agreements—I leave that to the Committee—but for me, it means a return towards normality in our relationship with our nearest kith-and-kin nations and kith-and-kin people. It is a natural thing for us to do, and it is natural that we will get an understanding without the damage that has been predicted, I think incorrectly, by some on the Opposition Benches.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
It is a great pleasure to follow the hon. Member for Mole Valley (Sir Paul Beresford). Despite my attempts to be a second-hand car salesman and flog a 1954 Morris Minor, the real reason I am here is not to turn the Chamber into a car showroom but to speak as Chair of the International Trade Committee. Before I say too much more on that, though, I can confirm, following the Antipodean mentions of Dunedin, a city of 117,000 souls, that it is indeed the Gaelic for Edinburgh; I am glad that the hon. Gentleman mentioned that. To reciprocate on his awareness of Scotland, let me say that Mole Valley is important to many crofters, because online shopping for many medicines is done at Mole Valley Farmers—that is a wee punt in his direction as well.
While I am throwing compliments about, let me praise the shadow spokesman, the right hon. Member for Torfaen (Nick Thomas-Symonds), for reading our report on the Australian trade agreement. It is a gripping read, and I have good news for him: a next instalment is coming out on New Zealand fairly soon. I am sure that he is looking forward to that and that all of us on the Committee will gladly sign a copy for him just to make that an extra special experience for him. I can see nods. [Interruption.] Some are looking for a paperback version; there is a cheapskate from Northern Ireland at the back there, But it is good that that has been read. While I am in salesman mode, let me say to those who are into trade agreements and looking for good-quality information tomorrow that we have our meeting on the comprehensive and progressive agreement for trans-Pacific partnership at 10 o’clock. The exact Committee Room escapes me—
Angus Brendan MacNeil
I thank my colleague very much for that.
I was reminded of something by what the hon. Member for Mole Valley said about the size of farming in New Zealand and the Scots exiles. I met a man named Andrew Morrison, who is from his part of the world, but originally from mine—his ancestors came from my constituency—and we talked about sheep, because he had sheep. I told him that I had 32 to 33 breeding ewes, depending on the year. He looked at me and said that he had 26, and there was a big pause. My chest was going out during the pause but, unfortunately, he went on to say, “Thousand”. So the hon. Gentleman is indeed right to say that the scale of agricultural production is massively different there.
We are here today to talk about these trade agreements and the legislation that is going forward. Trade agreements, on the whole, are to be welcomed. They are clawing back GDP that was lost by Brexit, although the Government figures do not say that. There are many nuances, and I will come to those by the end of my remarks, but I wish to start with the broad brush by asking why we are doing this. Surely we are doing this for our economic benefit and gain. We have then to set that in the context that the Government are doing it because Brexit is a damaging event to GDP, by up to about 5%.
Sammy Wilson (East Antrim) (DUP)
Does the hon. Gentleman not accept that the reason we are now doing separate trade agreements, especially with the south-east Asian part of the world, a lot of developing countries and countries such as Australia and New Zealand, is that they are the parts of the world that are growing and where markets are going to expand, while Europe is in stagnation? Having the freedom to do that and be released from the EU is going to be good for GDP, business and employment in the UK.
Angus Brendan MacNeil
I hear exactly what the right hon. Gentleman says, and he is right to an extent. However, let us suppose I were to give him £1 this year and £1.50 next year, and ask him how his income from the Member for the hon. Member for Na h-Eileanan an Iar had changed. He could say that it had grown by a staggering 50%”, but it would have grown by only 50p. When you are starting with something very small and you say that the percentage is going to be very big as a result of the growth, you still have something very small at the end of it. We should bear that in mind.
I return to the point about the Brexit damage of 5% of GDP and the effect of this Australian trade deal, depending on which type of modelling we use. The first model gave us a 0.02% gain—that was on the Armington trade theory spectrum, which all members of the Committee know just like that. When we moved to the Melitz-style spectrum, we were given a figure of 0.08%, which represents growth of 400%. That is a fantastic bit of growth, but this was still only 0.08%. If Brexit is 5%, this is like saying, “I am losing £500 but the Australian trade deal is taking in £2, if I am using the pessimistic option, or £8, if I am using the optimistic option.” That still leaves the UK economy as a whole £498 to £492 out of pocket by this entire transaction. The joy and boosterism that comes from some parts of the former Government, at least, should be seen in that context. If we add in all the other trade deals—the American trade deal represents 0.2% of GDP, the New Zealand one that we are considering today represents about 0.1 % or 0.2% of GDP and the CPTPP represents about 0.08% of GDP—we might find ourselves up around the £40 mark. It is a bit like going to the races with £500 and coming back with 40 quid. That is basically what is happening here.
Anthony Mangnall
The hon. Gentleman is bamboozling us with some of the statistics, but is it not the case that in every trade agreement signed either by the UK or by other countries, every economic forecast has been underestimated? Trade deals evolve as they go on—professional services or manufacturing develop, which actually enlarges the benefit. So the forecasts are not accurate and they are usually a fantastic underestimation of where we end up.
Angus Brendan MacNeil
The hon. Gentleman is a very fine member of my Committee, if not the finest, bearing in mind that there are at least two fine members in front of me. He is right that the modelling can be wrong, but it is not usually out by £492 to £500. It may be out by £2 or £3. I caution him that if those models say that the outcome could be better, the flipside is that Brexit could be worse than the 5% that has been modelled using the same sort of criteria. I hope it is not. I would rather the optimistic side, but let us be aware that this thing can go either way.
We are often told that there are winners and losers in these trade deals. We have certainly identified losers today, including the crofter I alluded to. Certain losses are hitting agriculture. I decided as Chair of the International Trade Committee to write to the Australian high commission to ask if it could identify some losers in Australia we could speak to. It wrote back and told us that everyone was a winner in Australia and nobody at all was a loser. We set that in the context of the figures that were mentioned earlier for Australia and New Zealand. For New Zealand alone, agriculture, forestry and fishing will lose between £48 million and £97 million.
The chair of the Trade and Agriculture Commission Professor Lorand Bartels told us:
“I cannot think of another country that has significant agricultural production— so not the Hong Kongs or the Singapores of this world—liberalising fully in agriculture, even over what is almost a generation. … That is unusual.”
So the UK has done something very unusual here in opening up. It comes back to the point about free trade that was mentioned earlier. None of this is free trade. It is trade that still has restrictions. Rather than paying a tariff, now you need the paperwork. As people have found, paperwork itself is quite costly.
I am reminded of the man in the weekend paper—the brewer, I think from Kent. He had lost a large part of his £600,000 export market for beer to the European Union. It has now become a £2,000 market. He has lost 99.7% of his exports. He is now not exporting and cannot export to any country in the world. When he exports to the European Union, he is going to need paperwork, and the paperwork costs him. It is a hurdle to 99.7% of his trade.
Mark Garnier
On the question of farmers and agricultural producers here in the UK, the hon. Gentleman makes an important point. He says that there is an increased risk to those agricultural producers, but the one thing that has not come up in the debate so far is consumer choice. It is an interesting point. Ultimately, we have to look after our farmers—that is incredibly important—but we also have many constituents who may well feel slightly aggrieved that we are restricting the amount of food that can be brought in, which means people having to pay more Waitrose prices. Would it not be all right to get Kentucky Fried Chicken that comes from Kentucky?
Angus Brendan MacNeil
Absolutely. This is the tension that there has always been in trade policy over the years—do you abandon your countryside and rural places? I use stark words deliberately, but it is a sliding scale between various points. Political judgments are made for various reasons, and people will come down on one side or the other. I do not belittle what the hon. Gentleman says, and is important that we recognise that spectrum. I am sure that he can argue the other way as well if he chooses. He is presumably making a devil’s advocate point or giving perhaps a strongly held viewpoint. It is a good point, but it is a point of debate. That is what we are here to do—to enlighten and illuminate that debate.
Angus Brendan MacNeil
I will make a little progress and then come back to the right hon. Gentleman.
The point I was making earlier was that the UK now finds itself in the position of being outside the European Union, of talking about the comprehensive and progressive agreement for trans-Pacific partnership, which we will be debating at tomorrow’s Committee, and of not being able to export anything anywhere in the world without masses of paperwork. The proverbial prawn sandwich or the chicken leg cannot be exported without an equivalent weight of paper accompanying it. We know the difficulties that we have in sending that to the European Union, and we are talking about CPTPP and trade agreements. The reality is that it will still be easier to send stuff to the European Union under the EU–UK Trade and Cooperation Agreement than it will be under all those other trade agreements, so let us put trade agreements into some kind of context. They are not a panacea. They are not a replacement for the European Union. What we have done is raise our fences to the European Union to a certain height and lowered some of our fences to other countries, although they may still be higher or even at the same height as those to the European Union, but the global point is that exporters from the UK are finding it difficult to send stuff anywhere. Anything that has to go anywhere requires paper, admin or tariffs. That is a fact for the United Kingdom and a fact that is often missed in our understanding of trade.
Sammy Wilson
The hon. Gentleman has rightly said that there are tensions between producers in the UK, who may well find themselves with greater competition as a result of trade deals, but that there are also benefits to consumers, who, of course, far outweigh the number of producers that might be affected and who will benefit from cheaper prices. Will he not also accept that we can help our producers be more competitive, especially now that we are out of the EU, by reducing their costs and removing some of the costly and unnecessary regulations, which push those costs up and make it more difficult for those producers to compete anyway?
Angus Brendan MacNeil
I can kind of see a bit of what the right hon. Gentleman says. For example, perhaps we should not have to stick ear tags on lambs before sending them to market. At one time, we did not have that hassle of having to put a 50 pence tag in a lamb’s ear, but then consumers said that they wanted traceability; they wanted to know where the lambs came from. We then have a debate between this regulation that is costly to the farmer/crofter and the consumer wanting a bit of traceability. Again, there is a political decision to be made. Do we want to get rid of tags in sheep’s ears, for instance—that is the easiest example that I can think of. That is one of the problems of getting rid of regulations. Which regulations do we want to get rid of? That is a legitimate point of debate, but if we get rid of our regulations, we do have to understand what the impact will be, and who does not want that regulation to be got rid of. Certainly, getting rid of ear tags in sheep—if anybody is listening—would be a help, because they often get lost in the fences. However, I do not think anybody will be listening and we will still have ear tags in our sheep to deal with.
The shadow International Trade Secretary mentioned that, in the early days, there had been a lot of headline chasing. When Brexit was being done, the Government were scrambling around for ideas. Freeports was one such idea—let’s have freeports, they said—but GDP was unquantifiable, whereas, as I have said, the Government have quantified the GDP of Brexit. The Government then alighted on free trade agreements. I have said this often—members of the International Trade Committee are probably ready to fall asleep at this point—but it reminds me of Neville Chamberlain coming back from Munich talking about peace in our time. This is the equivalent; it is trade deals in our time. It is not about what they mean for the economy, but about them looking quite good.
A former Trade Minister—I will not mention his name—was telling me that he had a bit of boosterism from the former Prime Minister. He was told to get on planes and to sign these bits of paper. He was very, very positive. If it was a car he was selling, I would have bought it. When I asked him what was under the bonnet—or what was the GDP gain from this trade deal—he did not know. That goes back to the point about there being no strategy; it is very concerning that he does not know what his trade decisions are doing for the economy. Unfortunately, with all the difficulty and fluff, the economic gain of trade deals is not being looked at, which is disappointing. Certainly, Brexit has left the GDP of the UK weaker, and at a time when we face a cost of living crisis, things are more expensive and people have less money in their pockets.
The final point I want to touch on is food security and what is happening around the antipodean sale of meats. They will say that they do not fill their quota at the moment, but what they will be enabled to do is to fill it more than the European Union’s free trade deal, which is more restrictive than the UK’s—the UK’s is one of the most relaxed, or lax, trade deals. The best cuts can be sent, which helps them with what they call carcase efficiency, with certain parts sent to specific parts of the world, meaning they can take the top part of the market away quite effectively. As I have said, Professor Lorand Bartels found this the most liberal case that he could think of in the world of anybody opening up their food area.
The deal also enables what I would describe as a parachute market for Australia and New Zealand. If something goes wrong in another market, they now have somewhere else to put a big quantity into. That might have an effect in future of displacing and damaging production in the UK. If the current UK is used as a parachute market for a number of years and then the other market is re-established, we cannot turn on production as quickly as we can turn it off. That is a big problem.
I have mentioned that CPTPP will not be like the European Union. It is not a replacement; it is a smaller GDP and it will be more difficult still to sell into that market. In the CPTPP, I do not think that access into one country will be access into all countries, as it is for the European Union, although that will be clarified tomorrow for those who want to tune in to the International Trade Committee.
We have a situation where the Australians cannot believe they have done so well. New Zealand television is utterly amazed and asking, “How come it is so easy?”. It is because the UK Government have been seen coming. People know they are desperate to get into CPTPP and they think that if they get these trade agreements done, that will happen. That goes back to the point made by the hon. Member for Mole Valley (Sir Paul Beresford) that the antipodeans were furious about the changes in the ’70s; this time perhaps they feel collectively that they have got one over the Poms, as they might describe them.
Angus Brendan MacNeil
Having mentioned the hon. Gentleman, I will certainly give way to him.
Sir Paul Beresford
The hon. Gentleman has to recognise that they are also looking for other things that we can produce and that we will send there. I mentioned Jags, but there are all the cars, all the farm machinery and those sorts of things, and that is the opportunity they see. They naturally would prefer to buy from here than from some other countries that I will not name.
Angus Brendan MacNeil
I am grateful to the hon. Gentleman. In Scotland “jags” means something that goes into your arm, usually against covid—I think they are called jabs down here—but I think he means the Jaguar car. Of course it is in Australia’s power to buy the Jaguar car; it is then Australia that puts the tariff on the cars coming in. If Australians are moaning that they cannot buy Jaguar cars because of the tariffs, they need to see the Australian Government, who, despite what they say, are not producing any cars and whose very free and open market is not as free and open a market as they let on.
Sammy Wilson
To give the hon. Gentleman a piece of good news, adjacent to my constituency there are already 150 new jobs making drilling machines for the mining industry exclusively in Australia. There are already benefits showing through in the manufacturing of goods and 150 people adjacent to my constituency are employed in a factory and enjoying those benefits.
Angus Brendan MacNeil
That is fantastic news, and it has happened before the free trade agreement. That just goes to show that the fantastic people of Northern Ireland do not need Westminster to give them a free trade agreement.
I am coming to the end of my remarks. I will give several views to the Chamber on the vote tonight. This trade deal is globally good for the UK, as the figures show, but its level of goodness is very small compared with the badness of the Brexit debacle. Is it good for Scotland? The Scottish Government do not seem to think so. They were engaged with perhaps the way that the umbrella engages with the rain: more with disdain than any sort of welcome.
When it comes to fish and agriculture, we know that Brexit has been most damaging for the highlands and islands of Scotland, including my constituency. The Government cannot break down the effect of this agreement, but it looks like it will also be damaging. That means we have two events that are locally damaging. I am here as a constituency MP. I can weigh up the arguments as Chair of the Committee, but I am mindful that I vote as a constituency MP. All of Brexit—the entire process—has been economically damaging, but the final upshot of this deal is that in years to come, as we move towards independence, that damage will be used as an argument against Scotland being independent. It is a very disappointing state of affairs that this deliberate policy—chosen in Westminster—will do that to us, so we will not be listening to arguments like that in the future.
It is disappointing that this debate was not done properly, and that Members did not get to put their tuppence worth and argue the points that we have debated with the hon. Member for Wyre Forest (Mark Garnier) and my good friend from Northern Ireland, the right hon. Member for East Antrim (Sammy Wilson), because there are legitimate things to consider, to ponder and to change our minds about so that we can get a good—and a better—deal. Some people would say that the European Union has struck that better deal. Had we remained in the European Union, we would not have lost the 5% of GDP. We may well have got the GDP gains anyway from the trade deals that the European Union has just done with those two countries. The upshot might well be that there has been no gain whatever in these trade deals, because they would have come had we not decided to damage the beer producers and exporters of Kent and many others places that have been trading, as has been done.
Mr Deputy Speaker (Mr Nigel Evans)
I used to be a fine member—but not the finest member—of the International Trade Committee, so you have just inherited my mantle, Anthony Mangnall.
Anthony Mangnall (Totnes) (Con)
Thank you, Mr Deputy Speaker; I am honoured. I am delighted to follow the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), the second most humble crofter who is at home in this place. I pay tribute to him, because he has been and is an extraordinary Chair of the Select Committee. Despite some of the disagreements that we might have had throughout our deliberations on this deal, other deals and other trade matters, he has carried on and managed to get through a very lengthy trade agreement—at times with great frustration. It is right to pay tribute to him, as well as to the secretariat, who have done an extraordinary amount of work and have found it equally as frustrating as we have when we have not had the scrutiny or access to Ministers that we would like.
It should be no surprise that I support the Bill. Given the course of the debate, we have not spent a great deal of time speaking about the contents of the Bill, which is because it is remarkably uncontroversial in this instance. Wherever we have gone in our objectives and ambitions to sign new trade agreements, we are confounding expectations. It was not that long ago that, when we talked about signing a trade agreement with Australia or New Zealand, those on the Opposition Benches said that it would be impossible and we would not be able to do it in the timescale. Well, we have done it, and now we are looking faster than expected on New Zealand. As I said in an intervention, we are also already in discussions with the Gulf Co-operation Council, India, the comprehensive and progressive agreement for trans-Pacific partnership and Canada, and we have the Singapore digital partnership and the Japan agreement under our belt. To discount those is an enormous mistake, because what the UK has done in terms of Japan and the benchmark for digital trade is truly remarkable. The world is now following our digital trade agreements, and that will be an enormous benefit to our businesses and services, and to this country.
The striking thing in the course of this debate has been the discussion of import impacts versus export opportunities. I am not remotely surprised to hear the Opposition talk about imports that will impact us in the most adverse possible way, but our export opportunities have been underestimated and not given the full attention that they should have been given. My hon. Friend the Member for Mole Valley (Sir Paul Beresford) talked about such opportunities, including the exports of machinery and professional services. We have to look at this in the round and not just cherry-pick the bits we think are going in a good way or a bad way; we have to look at them as a whole.
When we look at the Australia trade agreement, we are saying that farmers may have been adversely affected. I do not believe that. What I want to look at is all the trade agreements that we will have signed by the end of this Parliament. When the hon. Member for Na h-Eileanan an Iar and I visited the middle east to study whether we should join the Gulf Co-operation Council, we sat with representatives of the small amount of farming done in that region who said that, actually, a trade agreement with them would be hugely advantageous. The NFU has gone on the record saying that an agreement with the GCC will be a massive boon for our farmers and food producers in this country. We cannot look at one trade agreement on its own.
Angus Brendan MacNeil
Reflecting on the big dairy production we saw in the desert, did the hon. Gentleman not get the feeling that that was born of Saudi Arabia’s blockade of Qatar, and that Qatar might be keen to protect and defend that trade interest? For that very reason, it might not result in what we assume it will result in for farmers across the nations of the UK.
Anthony Mangnall
That is a perfect example. What we saw in Qatar was small compared with Saudi Arabia’s industry—a 30,000-strong herd milking parlour versus one in Saudi Arabia for a 200,000-strong herd—so yes, that is a fair point, but there also is a meat market there whose doors are opened to us, so I think the NFU’s insight is particularly useful. It is important that we do not cherry-pick; we have to look at the agreements in the round.
In an intervention on the Chair of the Select Committee, I made a point about the economic forecasts. One of the best examples of a fantastically low forecast that was a total underestimate relates to America’s membership of the North American free trade agreement. Initially, very low growth and very low opportunity were predicted; the reality has been very different because, over time, businesses evolve and take advantage of opportunities. The onus is now on the Department for International Trade to ensure that we reach out to businesses across the land so that they take the opportunities available to export and to benefit from imports of parts and anything else that comes under an agreement. The figures might seem low or insignificant at this point, but we must also think about our expectations—how we want our economy to grow and our businesses to develop, and how we want to be able to exchange the benefits of services and industries.
A related point was made by the former Secretary of State for Scotland, my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), about professional qualifications and equivalence. We have an enormous opportunity to share and develop those sectors.
Angus Brendan MacNeil
I am grateful to the hon. Gentleman for giving way to me again. You, Mr Deputy Speaker, may remember from your time as an august and esteemed member of the International Trade Committee that we discovered very early on in the negotiation and discussions with trade interests in Australia and New Zealand that one thing that could be done overnight was for the Home Office to ease up on work visas. This process requires Departments across Government to be aware that these things can happen if they are not being silly and obstructive in what I think is the most silly and obstructive Department in the Government, no matter who is in power.
Anthony Mangnall
I am delighted to hear the hon. Gentleman ask Whitehall and Westminster to sing a better tune and work better together. Truly, he will be a parliamentarian here for many years to come.
I am doing my best to fill your shoes on the International Trade Committee, Mr Deputy Speaker, but when it comes to farming, we have been talking about the impact of imports into this country but not about consumer choices. My hon. Friend the Member for Wyre Forest (Mark Garnier) raised this point, and I pose this question to the House: what do hon. Members think the environmental, social and governance policies of any of the major supermarkets or purchasers of food abroad say about meat purchasing in the UK? Would Members think it acceptable if Tesco, Morrisons, Aldi, Lidl or Waitrose started importing lower quality meat that does not fulfil their ESG standards? That consumer choice already exists; the opportunity for us as members of the EFRA Committee or the International Trade Committee, or as constituency MPs, is to make the case and ensure that meat that does not meet those standards is not purchased. That very effective tool has been overlooked.
I am not saying that everything in this agreement is right for farmers. There are serious concerns. My hon. Friend the Member for Louth and Horncastle (Victoria Atkins) was right to raise the issue of small farms. DEFRA has taken some steps and pushed in the right direction to ensure that small farmers work together more effectively to use their purchasing power, so that they can rival some of the bigger farmers. We need to continue to have that conversation and ensure that we are providing reassurance.
That brings me on to scrutiny, about which I have been quite animated in the past. I must begin with an apology to my hon. Friend the Member for Huntingdon (Mr Djanogly), because when I was first elected to this place, in the early days of discussing free trade agreements, he stood up and vociferously made the case for why the CRaG process was not right. In my youthful enthusiasm, I stood up and said that he was wrong and that the Government’s system under CraG was absolutely perfect. Well, on the record, I say that I was absolutely wrong and he was absolutely right. I thank him for his time and expertise, and for talking to me about how we might be able to improve CRaG.
As my hon. Friend the Member for Wyre Forest said, members of the International Trade Committee of all political colours worked extraordinarily well to make sure that scrutiny was at the heart of what we were trying to do. The fact that we had to spend countless hours going through eight volumes and 2,000 pages of the Australia trade agreement to make sure that we could even try to produce a report on the UK’s first major trade deal was a tough challenge at best, but to not have access to Ministers at the beginning and as the process went on was not acceptable. I ask the Minister to make sure that the process is better in future, because that cannot be allowed to continue.
As was outlined under the Labour provisions for CRaG, and as has already been said, we asked for the House to essentially have 21 sitting days after CRaG was initiated to have a debate and a votable motion on whether to extend the CRaG process for a further 21 days. Members of this House would have had the power to continually do that if the questions were not being answered or if the Government decided not to table that free trade agreement.
On 19 July, I applied for a debate under Standing Order No. 24. Mr Speaker rebuffed me on that, but graciously granted me an urgent question to make the point about why we need to have a debate about free trade agreements. I hope that the Opposition will not take this the wrong way, but we on the Conservative Benches have far more rural constituencies. The Government should not be afraid of their own Back Benchers having a conversation about the merits or implications of free trade agreements, so that we can return to our constituencies, speak to the Country Land and Business Association and the NFU, and make sure that we are alerting them to the impacts and the positives or negatives, whatever they may be.
Unfortunately, the clock has run out. We cannot legislate for the Government to find time. As I have said to the Chief Whip and any Ministers who will listen, the Government need to consider adding a new clause to the Bill that would enshrine the scrutiny process, because if this Bill does not pass, we cannot actually ratify the Australia or New Zealand trade agreements. I hasten to add that we have not even produced a report yet on the New Zealand trade agreement, so the House has not had time to see the expertise of the International Trade Committee and its secretariat or the Chair’s views on it. We need to consider that.
If I can put it as bluntly as this, I would like to hear some assurances in the Minister’s closing statement about what we will do on the scrutiny process. We in this House deserve a say on the free trade agreements. I happen to be very optimistic—not naively optimistic—about the trade deals that we are signing, because there are real opportunities for the services and producers across the country that we should welcome. In fact, even in the course of the debate, there have been a number of things that I suddenly thought that we might be able to export to Australia, such as signed copies of the book of the shadow Minister, the right hon. Member for Torfaen (Nick Thomas-Symonds), and vintage cars—or at least one of them, the price of which is perhaps coming down. We have to take the opportunities to our advantage.
Perhaps one of the greatest moments on the International Trade Committee, which the Chair is far too humble to mention, was when the Australian Trade Minister was sitting there talking about what he was doing. The Chair decided to pop outside to do some lambing and came back in with a newborn lamb that he decided to christen Dan Tehan in honour of the Australia trade agreement.
There is a big opportunity for us to ensure that we get our scrutiny process right and to improve it in Committee and in this place. As the excellent NFU spokesman put forward yesterday, the point is that Members have that right and that opportunity. We have to balance imports versus export opportunities. We have to talk about consumer choice and the competition within the market. The Australia trade agreement will deliver far more than people expect, and when we couple it with the many other things that will be done with the GCC, India and Canada, we will see enormous benefits, as I have already said. I thank the Secretary of State for her opening remarks and look forward to the Minister’s response.
John Spellar (Warley) (Lab)
I think we should initially recognise that trade does not exist in a vacuum. It is about relationships and trust, and which country is better to trust than Australia? In April, we have the Anzac Day commemoration in Whitehall, where we acknowledge and remember the hundreds of years of joint working and joint operations against tyranny and dictatorship. We have the long-standing and deep Five Eyes intelligence relationship, which also underpins our defence of our freedoms, and only this morning the Defence Committee was conducting an inquiry into the AUKUS agreement. We also have much wider relationships—family, political, trading, business, trade union, cultural and sporting—and of course a common basis in the common law.
Therefore, if we are going to do trade deals with anyone—and this is what has always surprised me about the opposition shown by some on the Opposition Benches—it should be a deal with Australia, as we have so much in common. That is why the contribution from the shadow Secretary of State, my right hon. Friend the Member for Torfaen (Nick Thomas-Symonds), was so welcome today. It had a very different tone from some speeches we have heard previously, and it is all the more welcome for that.
We have to recognise—and I forget which colleague mentioned this—that there is always a dynamic between free trade and fair trade. It is a debate that has dominated British politics from time to time over the last 150 or so years, and it has even twice torn the Conservative party apart. It is right to have such a debate, and we therefore need to focus on the details and on the principles, because such agreements cannot be an open door to pillage. We also have to make sure that the other parties are living up to the commitments they make in these agreements. Probably the most telling example is the accession of China to the World Trade Organisation, in that the great failure of the WTO and partner countries has been the failure to hold China to the commitments it made in joining that organisation.
At the same time, unlike some on the right and left of politics who seem to be opposed to trade in and of itself, we should recognise the huge benefits that trade has brought throughout history. Otherwise, we would have to go back to the days before the industrial revolution, when not only did trade drive the growth of Britain as the world’s leading industrial power, but imports of food from the new world fed the new urban masses running such industries. We cannot ignore that.
Equally, while we should not dismiss some of the particular impacts of trade—with sometimes the movement of work and sometimes the exploitation of those opportunities—we should recognise the huge reduction in poverty worldwide post war through the growth in trade. That is especially so, frankly, in China, where hundreds of millions have moved out of poverty in what is probably the biggest move out of poverty in history. Our starting point should be to encourage the development of trade, but with caution. We should not have predatory trade, and certainly not trade based on a race to the bottom on standards.
Angus Brendan MacNeil
Does the right hon. Member agree that the trade pursued by the European Union with Australia and New Zealand, which will see economic growth, has on the face of it been done with less risk to certain sectors, including the agriculture sector? Yes, trade is good, but there is also what we are throwing away, and the UK Government have admitted that they are throwing away a few tens of millions on agriculture in the New Zealand deal alone. There was a better balance to have been reached, but in being too keen on getting into the CPTPP and other things, the UK has just thrown the baby out with the bathwater, unfortunately.
John Spellar
I have always believed in the basic principle in any negotiations: that it is the terms of the deal, not the fact of the deal, that matter. Too often in takeover bids in this country, the intermediaries are far keener to get the deal done than to make sure it is a good deal for the participants.
However, I also caution the hon. Gentleman that in terms of meat production, we ought to be looking more at the problems posed by, for example, Brazil, or indeed the EU—in many cases there has been EU competition with less favourable animal standards than we have in this country. We should recognise that this is not unique in any way to the Australian agreement. I also point out that some of the hon. Gentleman’s arguments about percentages may also apply in meat terms to these two trade deals.
Returning to the topic of basic standards, particularly workers’ standards, a welcome development in international trade discussions has been the strong position taken by the Biden Administration in making sure that the beneficiaries are the working class—middle class in American terms—who have built the trade union movement in America and built America, and also workers in other countries. The British Government should note that. I am pleased that the TUC has been brought along to the trade talks with the United States in both Baltimore and Scotland; I fear that was probably at the insistence of the United States rather than willingly from the UK, but it is a good precedent and I hope it will be applied in other trade talks, particularly with Australia and New Zealand.
Australia and New Zealand have strong trade union movements and high labour standards. This deal is not about making ourselves liable to face undercutting competition; this is about opportunity and the ability of firms to trade, perhaps on much more equal terms than with some other countries.
That was touched on earlier in the debate, in relation to the movement—particularly in services and professional areas, but also in manufacturing—of skilled and technical workers. The Minister must acknowledge that previous Home Office restrictions on visas have been a real point of friction with both the Australian and New Zealand Governments. It would be a welcome development if other Government Departments influenced and pressurised the Home Office about that, not just for the economies on both sides but for individual development and to give skilled and professional workers in all three countries the opportunity to move and develop their careers and experience.
Alongside that, I hope there will be mutual recognition of qualifications. Instead of, frankly, allowing professional bodies’ self-interest to override that, we should look at where there is enough common ground and make sure that retraining and recertification, if needed, is very limited rather than taking a blanket approach. As I said earlier, the fact that we are common-law countries should help to facilitate that.
Political, geopolitical and trade interests often meet. For example, China has launched a massive campaign against Australian wine to put pressure on Australia on policy issues. We should work with the Australians as much as we can to facilitate our ability to import Australian wine, although not to the detriment of the growing number of British vineyards, obviously. That would have the side benefit of getting the attention of the Australian trade Minister, Senator Farrell, who represents the great wine-producing state of South Australia.
Angus Brendan MacNeil
The right hon. Gentleman makes a great point. Australian wine producers have argued that Treasury banding undermines the spirit of the agreement. To those who are exporting to another country, it would feel like a bit of skulduggery if that country’s Treasury undermined the agreement.
John Spellar
The Chair of the International Trade Committee makes the exact point made to me by Senator Farrell. I hope that that was heard by those on the Government Benches.
To broaden that point, with reference to AUKUS, following the Russian assault on Ukraine, there is a much deeper understanding across the world of the fragility of supply chains and the imperative of supply chain resilience. That is about not just physical industrial capacity, but a skilled workforce. Indeed, AUKUS is in part about the movement of skilled workers in the defence industry to sustain the agreement. It is also about critical materials, such as rare earths. Actually, they are not particularly rare, and Australia has the ores in abundance, but China has consolidated them—often through unfair competition and under-pricing competition —by dominating the refining capacity. Those are areas where we need to work with our security allies, but they also need to be our trade allies. Of course, that is also about trusted suppliers, so there could not be, for example, a “buy America first” policy. There is one level of understanding of that in the United States, but there needs to be greater understanding. That must be an objective of Government.
We should welcome the deepening of relations with our Australian friends and, in particular, with the new Government and Prime Minister Albanese. We look forward to building on that for a successful and shared future.
Dr Neil Hudson (Penrith and The Border) (Con)
It is a great pleasure to follow the right hon. Member for Warley (John Spellar). I welcome the chance to speak in this important debate as a Member of Parliament representing a rural constituency up in Cumbria that has a huge agricultural and farming footprint. I also speak as a vet who has worked on farms in the UK and in Australia, and I am a member of the Environment, Food and Rural Affairs Committee. Quite rightly, there has been much talk about the International Trade Committee’s great work in looking at the trade agreements. The EFRA Committee has produced a report on the Australia trade deal, to which I refer colleagues. I preface my comments by very much welcoming the new Prime Minister and the new Government who are coming in. I am fully supportive of them. However, as a constituency MP and given my interests, I do need to speak out.
I am broadly very supportive of trade deals in principle, and I absolutely adore Australia. I cannot be the only Member in the House who welled up this summer when watching the last episode of “Neighbours”. I am very supportive of everything that goes on in Australia. However, as I have said in the Chamber before, trade deals need to be fair to both partners—as the Australians would say, “You would want a fair crack of the whip”—and the trade deal with Australia is, unfortunately, imbalanced.
Earlier this year, in our UK winter—the Australian summer—I spoke of the one-sided nature of the Australia trade deal, which was reminiscent of the one-sided nature of the men’s Ashes cricket series that was ongoing. We will all be well aware that the England cricket team are now doing a lot better—the New Zealand cricket team will testify to how England have really lifted their game. I firmly believe that we must take a lesson from that, apply a bit of the Ben Stokes “Bazball” technique and go back into bat on these trade deals to make them much more level between the two trading partners.
Angus Brendan MacNeil
I am very grateful to the hon. Gentleman, a member of the Environment, Food and Rural Affairs Committee, for giving way. He makes a very interesting point. A trade deal depends on our own inputs and balances, and on where we stand in the world. The trade deal that one country might do with another will be very different from others, and they are all different in certain ways. I am pretty sure that if, for instance, an independent Wales, with its big sheep interest, was making this trade agreement with Australia, it would be very different. A Wales in the UK making this trade agreement is as it is, and a Wales in the European Union would have a different trade deal again.
The hon. Gentleman makes a point about where we strike a balance. Very often, it depends on where we stand and what our inputs are. I think his fear, which I share, is that the trade deal has been so good for Australia that it just cannot believe its luck. That is a bit disappointing and it is why we should have had parliamentary scrutiny earlier, because we might have reached a different deal that we could all have been happier with. We think free trade is a good idea, but it is just about where we put the balance. Where we stand as Scottish MPs, unfortunately, is that it is not as good as we would have wanted.
Dr Hudson
I thank the Chair of the International Trade Committee for his intervention, and I will come on to his point about scrutiny later. He makes fair points. Individual trade deals are tailored towards trading partners and the home country—they are bespoke. The important thing we need to think about with Australia and New Zealand is that they are the first trade deals through the gate. They set a precedent. That is why we need to get them right and why the scrutiny needs to be right.
We have heard talk about some of the products that might be involved. This trade deal is more than Tim Tams and some bottles of Hunter Valley shiraz coming over in exchange for Scotch whisky. There are key challenges for our home domestic market. Specifically, I will talk about the beef and sheepmeat sectors, which feel very much under threat. I speak regularly to my Cumbrian farmers in farms and in livestock markets, and they are relaying to me their concerns about what the precedent set by those deals will do for their futures. We have heard from hon. Members on both sides of the House about smallholding farms and tenant farmers—the people who are really on the edge with their profit margins. We need to keep a close eye out for them.
So, here we are today. The Australian free trade agreement has been through the CRaG process. We have talked about the CRaG process. Sadly, it ended on 20 July, which was too late for us in this Chamber to do anything about it, in terms of scrutiny or voting on it. There was no option for MPs. For two and a half to three years, I have been calling for MPs to have the ability to delay, amend or potentially reject trade deals if they are not in the best interests of our constituents.
Some of the concerns have been highlighted today. Some have been highlighted by the International Trade Committee and some by the Environment, Food and Rural Affairs Committee. The EFRA Committee produced a series of recommendations for the Government to take forward in future trade negotiations. Much of what we heard in the EFRA Committee was about speculation and forecasts, and we talked about the accuracy of forecasts. There are a lot of unknowns in relation to how much produce will, ultimately, come our way. When we questioned our experts, there was still a bit of crystal ball—“We still don’t know how much is going to come in.” That is why we need key safeguards for protection and to ensure we can slow down the supply of products if they come in at levels that were not predicted.
Currently, the Australian meat market is pivoted to south-east Asia. In global geopolitics, we have seen in recent months things that we did not predict, such as what has happened in Ukraine, and what that has meant for the world’s food security and the movement of food supplies around the world. We just do not know what will happen throughout the world in the future. At the moment, the Australasian market is pivoted to south-east Asia, but what if, for some reason, it needed to pivot to the west and to Europe? We just do not know. That is why we need strong safeguards.
As a rural MP and a veterinary surgeon, I am concerned and passionate about animal health and welfare standards. We should be very proud of the fact that our Cumbrian farmers and UK farmers farm to the highest animal welfare standards in the world. There is an animal welfare chapter in the Australian trade deal but, unfortunately, there is a discussion to be had about the fact that that is not subject to the dispute settlement mechanism. I believe that the teeth of that chapter are not sharp enough.
Members have touched on the concept of tariff rate quotas. As we have heard—we on the Environment, Food and Rural Affairs Committee have looked at this issue—the levels of the tariff rate quotas are very high. Therefore, the levels are very high for the produce that is coming in during that phased period of the next 15 years. That period is time-limited and, at the end of the 15 years, all bets are off and we move to free trade. I postulate that the tariff rate quota mechanism needs to be more precise and sophisticated, so that if the flow of produce coming into this country is too high, we can turn it down. It is important to have safeguards through core standards and appropriate tariff rate quota mechanisms.
I have been labelled a protectionist, but this is not about protectionism; it is about standing up for our values and what we believe in. I believe that we in the UK can be a beacon to the rest of the world in the way that we farm and through our animal health and welfare standards. That is why these precedent trade deals are so important: we can send out the message, “If you want to trade with us, bring your standards up to those that the UK population wants from our UK farmers.” These deals are precedents, and this is not about protectionism, but about standing up for our beliefs and values.
I am very glad that, throughout this process, when I and colleagues have raised concerns about some of the products that could come in, the Government have confirmed that a ban will be maintained on hormone-treated beef and chlorine-washed poultry so that it is illegal for that to come into the country. It is important that that is on record. That is brought into this debate a lot and it is a bit of a red herring, because those products will not come in through these trade agreements.
We have talked a bit about chlorine-washed poultry. It is important to mention that the chlorine washing process does not kill all the pathogens, as a study from the American Society for Microbiology in 2018 showed; it just makes many of them undetectable in the lab. That needs to be put on record.
There are practices that people use in farming around the world that we are concerned about in this country. We have heard much about mulesing in Australia. I firmly believe that if we had taken the advice of the Trade and Agriculture Commission and put core standards in our trade deals, that issue would have been resolved. If we put in a red line and said, “We do not find these certain types of products acceptable in this country,” that would influence production methods around the world.
There is competition between New Zealand and Australia in rugby, cricket and other sports, and it is a shame that the New Zealand deal did not land just in front of the Australian deal, because in many areas, the New Zealand farming systems are more akin to ours and are often ahead of the curve on many issues. New Zealand has banned such things as mulesing. It is also ahead of the curve on non-stun slaughter of animals, so it is a shame, strategically, that the New Zealand deal did not land first, because in setting a precedent it would have had a knock-on effect on other deals.
I also get very frustrated in this debate when people stand up in this Chamber and outside and give Australian farmers a real kicking. As I said, I am passionate about Australia. When people say, “The Australians have no concept of animal husbandry or animal welfare,” that is deeply offensive to the vast majority of Australian farmers. I have worked as a vet on farms in Australia. They have some fantastic farming systems and are passionate about animals, as we are, so to say that they have no concept of animal husbandry is deeply wrong and offensive. It is important that we bear that in mind. As we have heard today, because of geography, environment and regulation, it is cheaper to produce beef and sheepmeat in Australia than it is in the United Kingdom, so we have a competitive disadvantage for our UK farmers.
We have heard from many colleagues on both sides of the House about scrutiny of and input into free trade agreements. The first iteration of the Trade and Agriculture Commission made clear recommendations about inserting core standards for things like animal welfare and environment into our trade negotiations. Sadly, the Government chose not to take that advice.
The second iteration of the TAC is a lot narrower and more targeted in scope. Quite alarmingly, when we questioned it for our scrutiny report, we found that it is not very well resourced. Its chair actually admitted to us that he had to supplement the commission’s administrative support with university moneys from his own research allowance. Our report makes clear recommendations to the Government that the Trade and Agriculture Commission needs to be adequately funded and resourced. It has some big work coming up with the CPTPP, so it needs more administrative support. If we set something up, it has to be resourced properly.
We have also heard about a lot of the challenges that our UK farmers face. Throughout the pandemic, people in the food production sector were quite rightly acknowledged, recognised and clapped as key workers. Sadly, I feel that we are now moving away from that: people are forgetting how important farmers and food producers, deliverers and processors are to our communities. Food security was brought into sharp relief during the pandemic and has been brought into even sharper relief by the hideous war in Ukraine. It is so important that we acknowledge and support the people who are producing and providing food for us and those elsewhere in the world. We need to understand the huge challenges that they are facing with their fuel costs. All households and businesses across the country are facing the cost of living crisis in fuel and energy, but in the farming sector the costs of fuel, energy, animal feed, fertiliser and supply have rocketed.
Importantly, our Select Committee has launched an inquiry into food security. I have spoken about it before in this Chamber, but I am concerned about the resilience of the UK’s food security and about some of the inputs, such as labour. We need to look at a good, sensible and pragmatic visa system that allows people to come and work in different sectors. Another input is fertiliser. Last year we heard the alarming news that CF Fertilisers had mothballed its complex in Ince, and just three or four weeks ago it announced that it was ceasing ammonia production at its Billingham complex in the north-east. That has a huge impact on the production not only of fertiliser, but of carbon dioxide.
CO2 is so important for our food and beverage sector, but what really worries me as a vet is that it is needed for the humane slaughter of poultry and pigs. If we end up without adequate supplies of CO2, we may see more of what we have seen over the past few months: healthy pigs being culled on farms in the UK and put in the ground, not into the food production sector. Having been involved as a vet in culling animals during the foot and mouth crisis, I can tell the House from personal experience how upsetting it is and how deeply damaging it is to the mental health of vets, farm workers and abattoir workers if animals have to be killed senselessly. We have to ensure that we are resilient in our food and in all the inputs.
Anthony Mangnall
My hon. Friend is making a truly brilliant speech: it is a perfect reminder of why we should have had this debate during the CRaG process, and it shows why we might have wanted a delay to consider the points that he makes. Under the Agriculture Act 2020, the Secretary of State must come to the Dispatch Box every three years and report on the UK’s national food security. Does my hon. Friend agree that we should have that report this autumn so that we can take his points into account?
Dr Hudson
My hon. Friend makes a very good point. He is right that the Government must report on food security every three years, but our Committee—the Select Committee on Environment, Food and Rural Affairs—made a recommendation that the report should be annual. We need that report on the country’s food security, especially now that we are facing these awful crises with an impact on so many levels of the food production sector.
I have mentioned some of the inputs, including fertiliser, but our UK farmers face other challenges. The EFRA Committee has just launched an inquiry into the environmental land management transition, looking into uptake and asking for a status report on how it is going now that we have left the European Union, and the different way in which farmers and land managers will be rewarded for farming and looking after their land. We want to see how that is going, and whether we need any rethink or any adaptation because of the acute situation in which farmers find themselves.
My plea to the Government is this. In the context of the current deals and that of future trade deals, our UK farming and food production sector is under challenge and under threat. Let us not challenge it further with our international trade policy. So many other things can happen in rural communities, such as infections disease outbreaks, mental health challenges and isolation. In the EFRA Committee—I am referring to it quite a lot today, because we have already heard a great deal from members of the International Trade Committee—our inquiry into rural mental health is approaching completion. It deals with the stress factors in rural communities that affect farmers and livestock managers: the threats that they face have a real impact on their communities and on their mental health.
Angus Brendan MacNeil
This debate seems more like a discussion at times, but a good discussion. The hon. Gentleman has made an important point. Let us say that we are negotiating a trade deal that will result in both winners and losers in our own country—forget Australia—and the losers happen to be in, say, rural Wales and the winners happen to be, say, City financial whizz kids. If there is then a demand for some sort of fiscal transfer within the country to offset the damage from the new policy, it will often be resisted by those who have benefited, and there will be no cognisance in the policy that has been negotiated of the more important point that the hon. Gentleman is making about the damage that the new outlook and the new policy will inflict on individuals who find that their industry has been undermined and kicked away.
Dr Hudson
I thank the hon. Gentleman for his intervention. I think it important that when we are striking trade deals with other countries, all parts of the United Kingdom—all parts of the devolved nations, rural and urban—should benefit from those deals. I hope that the Government will take away the strong message that this comes down to individuals, it comes down to small businesses, it comes down to tenant farmers, it comes down to abattoir workers: a great many people need to be considered in this. We need to stop challenging our farmers and food producers, and help them along the way.
As I said at the beginning of my speech, I welcome the new Government coming in today, and I was pleased that the new Prime Minister, during the leadership campaign, talked about unleashing British food and farming to improve food security. I was also pleased that my right hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) talked about supporting farmers in future trade deals. However, I would gently say to the Government, “Let us be doing that with our current trade deals, not just the future ones.” Yes, the ink is drying on our deals and perhaps it is too late to change parts of them, but we must ensure that these precedent deals set a template with which we are comfortable when we are negotiating with other countries.
I am supportive of the Prime Minister and the Government, but on this issue—for my constituency and, speaking as a veterinary surgeon, for Cumbrian and for UK farming—I want to stand up and say clearly that I have real concerns about what we are doing as a country, and that we need to ensure that we do not make mistakes. I think the scrutiny process that has been mentioned so often during the debate would have helped us, and we would not be in this position today.
I apologise for not being here for the start of the debate. I was chairing a Bill Committee elsewhere.
I agree with much of what the hon. Gentleman is saying. However, he mentioned a template for future deals. Does it concern him not only that the Australia and the New Zealand deals done were without proper scrutiny because of the way in which the CRaG process was bypassed, but—given that he is involved in agriculture through the Committee and, probably, through his own past as well—that farmers in this country in particular have been sold down the river? This is nothing like what should have been done; for instance, the consultation with the National Farmers Union and others was not as good as it should have been. If this is indeed a template for future deals, it does not bode well for the future.
Dr Hudson
I thank the hon. Gentleman for that intervention. As we heard earlier, the paucity of scrutiny is something we are very much aware of.
I will stand up for my Cumbrian farmers and our UK farmers. If they are under threat in, say, the beef and sheep sectors, we have to stand up for them and ensure that we are looking out for them. As I have said before, this is not protectionism; this is about standing up for our values and what we believe in. I have been consistent on this since I was elected to Parliament, and I have voted accordingly on the Agriculture Bill and the Trade Bill.
As we have heard today and during the leadership campaign, things have changed in the United Kingdom and policy decisions are having to be made. The national insurance rise is going to be reversed, for example. I know that today’s Bill is narrow; we have talked today about what it means. It is about changing UK domestic procurement law, and this is enabling legislation, but what we have seen today is that the Bill and this debate have become a proxy for the scrutiny debate that many of us on all sides of the House are really calling out for. I note that in the other place there was a full three-hour debate and scrutiny. Hopefully this will be a lesson for the Government: please, please bring MPs from all sides of the House with you, because we want these deals to work for both partners. We want them to work for the UK, for Australia and for New Zealand in a mutually compatible way.
With regret, I will not be able to support the Government on the Bill today. I am asking them to think again. I started with comments on cricket. I know that the ink is drying on the Australian trade deal—I am mixing my metaphors now—and perhaps the stable door is bolted and the horse is way down into the next paddock, but the New Zealand deal is still chugging away. I ask the British Government to put their cricket pads back on and to go back into bat on these FTAs while the ink is still drying. I plead with them to drive a harder bargain and to back British farming. We have heard a lot about different cultures across the world, but I have a sneaking suspicion that if we did so, our closest allies and friends in Australia and New Zealand—our Australasian friends—would probably say to the negotiators, “Good on you, mate! Fair play, well batted.”
Ms Anum Qaisar (Airdrie and Shotts) (SNP)
It is a pleasure to follow the hon. Member for Penrith and The Border (Dr Hudson). His contribution was incredibly reasoned and, as someone who grew up in a cricket-loving household, I appreciated his cricket references.
These are the UK’s first independently negotiated free trade deals over 50 years, and the agreements are being hailed as a Brexit success by those on the Conservative Benches. However, today we are left to scrutinise a technical Bill that does not work in the interests of Scottish farmers and does not reflect the Scottish Government’s vision for trade. Frankly, this Bill threatens the devolution settlement through provisions designed to constrain the powers of Scottish Government Ministers. These measures have forced the Scottish Government to lodge a legislative consent memorandum in the Scottish Parliament recommending that Holyrood does not consent to the Bill in its current form.
Procurement is of course a devolved matter—a power exercised by Scottish Government Ministers—but this Bill seeks to constrain those powers. It allows UK Government Ministers to make secondary legislation on devolved matters of procurement without further consent from the Scottish Parliament. Additionally, any future amendments made to the trade deals will not receive further consent. Crucially, this removes a level of oversight.
Under the Constitutional Reform and Governance Act 2010, Parliament lacks an effective method of scrutinising as well as examining treaties and trade deals. Concerns over the lack of scrutiny of agreements are not limited to these Benches. Members on both sides of the House, alongside my good friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), Chair of the International Trade Committee, have expressed those concerns about being unable to debate the impact of trade deals, crucially, on their constituents. These deals will have significant consequences for people, businesses and the climate. There must be effective scrutiny of these deals to make sure that we have a positive impact on society.
Scottish farmers, including those in my constituency, are already struggling. They face a crisis of uncapped energy prices and labour shortages causing crops to rot in fields, as well as the lost EU farming subsidies. We now also face trade deals that will harm their interests and have been described by the president of the National Farmers Union of Scotland as,
“very one sided, with little to no advantage for Scottish farmers”.
Of particular concern are the concessions on animal welfare and environmental standards, which could cause lower-quality produce to undercut farmers from across these four nations.
The lack of environmental and animal welfare standards in these trade deals risks food that is pumped full of pesticides and antibiotics entering our markets. The reality is that these goods fall short of UK standards, with Which? finding that 72% of people across the UK do not want food coming in through trade deals that does not meet current standards.
Angus Brendan MacNeil
I have hesitated to interrupt the hon. Lady, because her speech is going really well—as well as I hope Celtic will be going tonight when they are cuffing Real Madrid after about 8 o’clock. But the point that she raised earlier, and the point I hesitated on, was that if this United Kingdom was a proper Union, we would not have a situation where the United Kingdom Government were imposing on the Scottish Government in devolved areas that it independently controls. It does not happen in the European Union; there is respect there. We see a sad lack of respect when it comes to the UK Union, when they think they can impose it. That aspect gives us a problem around this deal.
Ms Qaisar
I thank my hon. Friend for his contribution and I must admit, as I said earlier, that I grew up in a cricket-loving household and football, sadly, is not my forte.
Once again Scotland is paying the price for being outside the EU, even though over 60% of the country voted remain. The recently negotiated deal between the EU and New Zealand saw stronger safeguards for farmers in comparison to the UK deal. Of course, as an independent country in the EU, Scotland will be able to regain stronger protections.
The Bill bypasses essential parliamentary scrutiny of the Australia and New Zealand trade deals. The elements of the Bill that are up for debate erode the devolution settlement, thus reducing the power of Scottish Government Ministers on matters of procurement. It puts Scottish farmers, along with food and drink manufacturers, at risk of being undercut by meat that potentially may be produced to a lesser standard than that which we currently enjoy.
The UK Government must achieve better protections for Scottish farmers or, crucially, grant the Scottish Parliament the powers to prevent goods of lower standards from being sold in Scotland.
Mr Jonathan Djanogly (Huntingdon) (Con)
These Australian and New Zealand free trade agreements are in the round, I believe, a good thing for the UK and they have my support and good wishes for their potential in binding our countries ever closer together.
I have heard various attacks on various aspects of the deals, but some of the complaints are a bit like comparing apples with pears—like those who complain about falling trade with the EU and then say that there will not be much coming in from Australia under this deal to compensate. Surely, given where we are, and now that we can negotiate our own trade deals post Brexit, we need to be getting out there and negotiating those deals, like we have with this deal, even if we also need to be organising a better deal with the EU. It might be more persuasive if opponents suggested that the EU had a better FTA with Australia than we do; but of course that case cannot be made—perhaps because the EU and Australia do not yet have a deal. Many provisions here are uncontentious and just good to have, for instance, procurement provisions that create the level playing field, developed beyond WTO minimums, to provide for non-discrimination and anti-corruption, meaning that bidders for contracts will not be put off by the likelihood of local businesses getting preference. Co-operation on the recognition of professional services, business mobility and the recognition of qualifications will be a great help, not only in enabling UK plc to promote our excellent professional services to Australia, but allowing Australian professionals to work here in areas where there is a crying need for such highly qualified workers, such as City law firms. The import of young talent will be a significant benefit to us. I would be interested to hear the Minister’s view on how these immigration provisions will impact on future free trade agreement negotiations. For instance, in our FTA negotiations with India will the Australian worker mobility provisions constitute the starting point?
Some people complain that the additional trade figures proposed are small, that Australia will sell more to us under this deal than we sell to it, at least in the short term, or that Australia has got a better deal. This is short-term political point scoring and it is short-sighted, because we need to look at the future potential to increase trade. If UK business is provided with anything like what the Government say will be approximately £10 billion of new legally guaranteed market access, this deal represents a huge opportunity.
Earlier in the debate there was a discussion as to how this FTA might help smaller businesses in practice. In that regard, I was contacted only a few days ago by a Huntingdon family-run mid-size company called Le Mark Group, which makes high-value work clothes, tapes and stage flooring. It is now targeting Australia and is already grateful for help from the international fund. Apparently, the Australians are very keen on its “Dirty Rigger” range of work gloves. The key point the company makes is that having the FTA in place has meant that it has had the solid platform to find a dealer that would truly commit to promoting and stocking a sufficient quantity of product. So this deal will help business, small as well as large, and I think more positivity in this debate would have been justified in that regard.
Representing a rural seat, I understand concerns about food and meat imports and ensuring that quality is maintained and that UK farmers are not left in an uncompetitive situation. Given that full market access will not happen for 15 years, there should be plenty of time to cater for the harmonisation of environmental and welfare issues, and we should be looking to ensure that that happens. I heard the Secretary of State confirm that that is the intention. In any event, all existing Australian beef and lamb is currently eaten domestically in Australia or in Asia; there is no spare capacity. One also needs to ask: whatever levels of imports are set or not set, given the increase in meat consumption in Asia why would Australia want to switch to exporting mass-market, high-volume, low-cost meat products to the UK, with ever more expensive transport costs? My hon. Friend the Member for Penrith and The Border (Dr Hudson), in a thoughtful speech, suggested that Australia might stop trading with China and then start flooding our markets as a result. One can argue that, as it is possible, but it is highly unlikely, given the number of other meat-hungry countries that are close to Australia.
Angus Brendan MacNeil
It is good to have these sorts of discussions. To paraphrase, the hon. Gentleman is saying, “The UK is opening the door to Australia but it is not going to come through the door because it has got so much going through other doors.” That raises the question, first, as to why Australia would want this door to be open, because it seems that it does not want it. Is it because of some of the cuts? Or is it because this is an insurance policy: a parachute market if something goes wrong in the future in some other sphere? If that is the case, it leaves somebody else very vulnerable.
Mr Djanogly
I think it is because there are many people in this world, including myself, who fundamentally believe that the starting point should be free trade and that the peoples of the world improve their lot generally by having free trade.
In any event, we are facing a revolution in the meat sector and it is looking increasingly likely that within 15 years cultured meat will have almost replaced low-value minced meat, chicken and pork. Furthermore, I think it unlikely that UK producers of pricey high-end meat products, particularly ones selling to local markets with strong local followings, need to fear Australian meat imports.
Sir Mark Hendrick (Preston) (Lab/Co-op)
The hon. Gentleman is putting a very brave face on this. Many commentators in the agricultural communities in this country see it far more negatively than he does. I take his point about the 15 years. The agreement will be phased in over 15 years. Many of them see this as a car crash in slow motion. If the hon. Gentleman had argued that the agreement was good for free trade reasons, fine. The minuscule GDP gain from it has been accepted. I see the most positive thing about it as access to the CPTPP, which will be coming on stream. Britain aims in the longer future to join that organisation, which I am sure he will agree is a good thing in itself. That begs the question that, if we can do that why not—
Mr Deputy Speaker (Mr Nigel Evans)
Order. Interventions, by their very nature, should be short.
Mr Djanogly
I think 15 years is a very long car crash. There will be time to regularise, and the world will be a very different place in 15 years. I take the hon. Gentleman’s point on the CPTPP. It was made at the right moment, because I was about to come on to it.
A further reason for supporting the free trade agreement, as the Secretary of State mentioned, is the more strategic one. If we consider that world growth over the next century is going to be dominated by Asia-Pacific, we need to be in on the action there. Negotiations for the UK’s accession to the CPTPP have now started and Australia, New Zealand and Canada are parties to that agreement. Clearly, if we had not settled a deal with Australia and New Zealand, not least given their Commonwealth status, we could have had a much weaker pitch with which to start negotiations with CPTPP. I see this Australia FTA as helping to set out our Pacific stall, enabling us to then move on.
Angus Brendan MacNeil
I am interested in the hon. Gentleman’s philosophy and approach to trade. He said it was a 15-year lead-in to almost complete openness. Would he want that to be quicker? Would he want it to be 15 months? Would he want it to be slower? Would he have wanted the deal to be more like the Australian deal? I am genuinely interested in his trade philosophy, given what he said about free trade. He sounded like he wanted it to be open immediately.
Mr Djanogly
I do not have any objection to the 15-year period. I would be interested to have heard from his Committee whether more or less would have been preferable, and I am going to come on to scrutiny right now.
I have explained why I support this deal in outline. We need to appreciate that with an FTA, the devil will always be in the detail—something that the hon. Gentleman said himself earlier. These deals do get very detailed, which is why scrutiny of them is so important. I wish now to explain why I believe that not only has the FTA scrutiny process been flawed within the current scrutiny system on this FTA but it has shown up an urgent need for reform of the system itself, as many of us predicted would be required during consideration of the Trade Bill 2021. I thank my hon. Friend the Member for Totnes (Anthony Mangnall) for his kind and generous recognition of that.
At that time, the Government argued, as they do now, that the existing Constitutional Reform and Governance Act 2010 process would be adequate. In reality, the process, which itself was based on an outdated 1920s convention, was little regarded before Brexit as our trade agreements were then negotiated and predominantly scrutinised and voted on by the EU. As has been described, the CRaG process basically provides a period of 21 sitting days, after but not before a Government have signed a trade deal, to debate and possibly delay ratification, although in practice no delay has ever been voted for.
Before the recess I wrote to the Secretary of State on the scrutiny process for the Australia FTA and she kindly sent me an explanation, but one that frankly did not fill me with confidence. Australia has not yet ratified so there is no pressing urgency here. At the time of the Trade Bill and before signing of the Australia deal, ministers said that there would be full Committee scrutiny pre-signing, and the CRaG consultation with a debate post signing; so why did the Government start the CRaG 21-day clock ticking before the International Trade Committee report came out - effectively stymying the opportunity for debate? The scrutiny of this Bill, I am sorry to say, has been a poor performance on behalf of Ministers. Surely we urgently need to review this outdated and inept system now and move to a similar scrutiny system as used in other democracies. In the US, Japan and the EU, for example, scrutiny, including a final vote on the deal in Parliament, is what happens before signing the FTA, not just before its ratification. The bizarre reality is that, post-Brexit, the UK has given more power to Ministers and has less accountability and scrutiny over its trade deals than when we were in the EU. Now we have a new Government in place, this should be the perfect time to move on and update this creaking system.
Sarah Green (Chesham and Amersham) (LD)
I wish to focus my remarks on the precedents being set and the signals being sent by this Bill and the two free trade agreements that it facilitates. The Government promised us an independent trade policy set by the UK’s representatives in Parliament. They claimed that agreements would be in the interests of small businesses, farmers and manufacturers throughout the UK. They reassured us that standards would be upheld. With the UK negotiating free trade agreements for the first time in decades, it seems that they are going back on these commitments. There are, however, three specific areas, which have been discussed extensively, that I wish to touch on today: the ratification process and parliamentary oversight; the concerns of the devolved nations; and the fears that certain standards are not being upheld by these agreements.
I am not the only Member of this House disappointed that the promised debate and vote on the Australia free trade agreement never materialised. It is true to say that the ratification process itself technically does not require such a debate or vote, but the Government gave Members of this House assurances on several occasions that one would take place. Trade affects us all and there are many who wish to participate in the shaping of these agreements. That is why it is so important to engage with them and get their buy-in. It would build trust in the process itself and in the treaties. The precedent that is being set is that free trade agreements will get no parliamentary scrutiny and it sends a signal that the Government will do the bare minimum to get them over the line.
The second area of concern relates to the devolved nations, which have so far declined to give their consent to this Bill. Both the Scottish and Welsh Governments have indicated their concern that this Bill will undermine devolved powers, and it is not difficult to understand why. For example, although the Bill gives Welsh Ministers powers to make regulations in devolved areas,
“it also gives those powers to UK Ministers without any requirement to obtain Welsh Ministers’ consent”.
This is not a precedent that should be set. It signals either a misunderstanding of the point of devolution, or a disregard for it. It would be helpful for this House to know what conversations are taking place with the Scottish Parliament and Senedd Cymru to address their concerns and reassure them that this Bill will not undermine them.
We have also been warned that these deals threaten to undermine high UK environmental standards, food standards and animal welfare standards. The president of the NFU has said that
“we will be opening our doors to significant extra volumes of imported food—whether or not produced to our own high standards”.
Australia continues to permit farming techniques and chemicals that have long been banned in the UK—battery cages for hens and pesticide use among them. These lower standards allow for lower production costs and cheaper goods, which undercut UK farmers. Here in the UK, we are rightly proud of the high standards that we uphold in relation to animal welfare and the environment. We must not allow them to be undermined.
Earlier this year, I spoke to farmers in Chesham and Amersham who told me that they are already facing rising costs for essentials such as fertiliser and fuel. These farmers are frightened for the future, and worried that their Government are selling them out. It is not only farmers who will suffer; the impact will be felt along the supply chain. The food and drink industry has voiced its concerns about the potential of UK producers to be undercut by Australian competitors.
Angus Brendan MacNeil
The hon. Lady is making an excellent speech and is speaking up well for her constituents in Chesham and Amersham as well as being understanding about the situation in Scotland and Wales. Is the point not that the Government really could have done this much better? They could have brought along the Scottish Government, the Welsh Government and the farmers in Chesham and Amersham by having a bit of debate, a bit of reflection and a bit of consultation and by securing a better deal that people could have united behind?
Sarah Green
I thank the hon. Gentleman for his intervention; I think we are in agreement. In fact, I agree with the International Trade Committee that we need transparency on the real impact of these new trade deals and the Government to publish a full assessment of the winners and losers across all economic sectors and the nations of the UK.
There are also serious questions to answer about how this Bill will prevent cheaper and lower-quality food products from flooding the UK market, threatening our agriculture and food safety. The Government must outline how they will monitor the impact of that and what action they will take to minimise any damage done to UK business.
The trade-boosting deals promised by the Government have not yet become a reality. The impact assessment of the agreement with New Zealand shows only a 0.03% increase in GVA for the south-east. My constituents in Chesham and Amersham will see next to no benefits from the deals this Bill facilitates.
Sir Mark Hendrick
I agree with the general drift of the hon. Lady’s speech—it is very good indeed, and I agree with most things. There has been emphasis on the regional devolved Governments, but that applies to England as a whole as well. We see people from English constituencies complaining about this deal just as much. The whole problem is about transparency. The Government have bent over backwards to do everything they can to ensure that the Australia deal, which is a template for future deals, was not properly scrutinised, and in my opinion that was deliberate.
Sarah Green
I think the precedent that is being set with these deals is important, and that point has been made quite eloquently by others.
Anthony Mangnall
The hon. Lady opened her remarks with this point and I am sorry to come back to it, but she asks what benefit there is to small businesses. This is a 100% removal of tariffs. That is an enormous benefit for businesses that are exporting, and even within our respective constituencies I know there are a number of businesses that export to that part of the world.
Sarah Green
Of course there are benefits to be found in these agreements, but I want to focus specifically on areas of concern. The agreements will now set a precedent for the trade deals we negotiate with Canada, the United States and others. Given that parts of these agreements were negotiated by our newly appointed Prime Minister—I am not sure she has started her speech yet—I can only hope that she is not looking to make a habit of reneging on promises as she continues in Government. As the UK pursues a new trade policy, we must not abandon our high standards, we must not run roughshod over our parliamentary democracy or the voices of the devolved Governments, and we must prioritise the quality of the deals we strike over the quantity.
Mrs Flick Drummond (Meon Valley) (Con)
This Bill relates to an important agreement for our country as we establish new trading relationships, although in this case the agreements are with two countries with which we have very close bonds in many ways, as the right hon. Member for Warley (John Spellar) mentioned in his contribution. One of the great controversies when we joined what was then the European Economic Community was that it weakened strategically important trading links elsewhere in the world, especially with Commonwealth countries. Opportunities are now open again.
My priority is to help my farmers and producers, and all our other industries, to make the most of these two deals and to export the brilliant produce of Meon Valley. We had an urgent question from my hon. Friend the Member for Totnes (Anthony Mangnall) on 19 July about scrutiny arrangements for this agreement. I was looking for assurances then that the deal does not affect our ability to defend strategic national interests, especially as we have recently announced the national food strategy, which rightly aims to safeguard our supplies and our production. The Minister reassured me at that time, but in future we need more scrutiny on each deal, and I will come on to that in a minute.
Anthony Mangnall
Since my hon. Friend is making a point on food security, I will take this opportunity to see whether she might be open to join the somewhat growing campaign to see a national food security report from the Minister for Farming, Fisheries and Food this autumn, to ensure that we can address the point she is now making?
Mrs Drummond
Absolutely. I am very happy to back that campaign and hope that we will have an annual report, because it is incredibly important.
In Meon Valley, we have some exceptional farmers, and I have listened carefully to their concerns about the future. I will watch the operation of all our trade deals closely, especially the impact they might have on smaller farmers, as some of my colleagues have already mentioned. As the chair of Wine UK, I am looking at the export of sparkling wine, which is growing in quantity—including in my constituency where Hambledon Vineyard and Exton Park Vineyard are growing fast—and I hope will soon match the success of Scottish whisky.
Everyone can be reassured that standards and protections are not being weakened to the detriment of producers or consumers—a fair and key concern of my constituents—but we must have more time to debate the provisions of trade deals during the CRaG process in the future, as others have mentioned. There is still the opportunity to do so with the New Zealand deal, and doing so would reassure many people about the process as we look to strike more of these innovative deals for our industries.
The Bill supports the completion of the two deals with Australia and New Zealand. As such, it is important that it passes its Second Reading today, so that we can plan for future deals. Even during these turbulent times, the pace of global trade and markets is relentless. We see some signs of the pandemic easing and freeing up world trade generally, even though the pressures of the Russian invasion of Ukraine are still felt. Freight rates are beginning to fall and some supply chain blockages are dissolving, although others remain. I support the Bill, and look forward to being able to scrutinise future deals and support our industries through them in the years ahead.
Paul Blomfield (Sheffield Central) (Lab)
Speaking so late in the debate has been of real value, as I have been able to listen to so many contributions from both sides of the House. The debate has been a long time coming, perhaps even longer than many Members have alluded to. Its origins go back to the referendum campaign in 2016, when leave campaigners dangled before us the prospect of trade deals with Australia, the US and India as the main reasons for leaving the European Union, making extravagant claims about the economic benefits. The reality has clearly been very different. With a US deal off the agenda as long as the Government continue with their irresponsible approach to the Northern Ireland protocol, and other deals that have been much proclaimed in fact largely rolled over from those we had previously enjoyed as members of the EU, the Australia deal in particular was lauded, not least by herself, as the great achievement of the new Prime Minister during her spell at the Department for International Trade. It is therefore curious that the Government have been so reluctant to engage with Parliament on the discussion and detail of the deal.
When the deal was announced, Members on both sides of the House probed the Government about it. They brought their experience, as the hon. Member for Penrith and The Border (Dr Hudson) did strikingly in his contribution, and they raised their constituents’ concerns, as others have done today, but they got nowhere. The Australia deal was signed last December and the New Zealand agreement in February. After several months, the Government laid the Australia FTA before Parliament under the CRaG process on 15 June. Ministers promised —as others have made clear, including most recently the hon. Member for Huntingdon (Mr Djanogly)—that there would be full opportunity for debate and a chance to shape the deal.
Angus Brendan MacNeil
I thank the hon. Gentleman for giving way; I know I have made a lot of interventions today. One of the reasons for Brexit, of course, was to leave the EU to make trade deals with the likes of New Zealand and Australia, which we are discussing today, but the EU has done a trade deal with New Zealand that is arguably better—[Interruption.] It is better, in fact. And the EU is heading for a deal with Australia as well. That might annoy the Brexiteers, but I really wonder what the future status of these deals might be if at some point the UK rejoins the European Union, or if, after Scotland becomes independent, it rejoins the European Union, and England and Wales trot in behind. Where will these trade deals be then? I do not think the Government have given that point any consideration. The deals are transitory.
Madam Deputy Speaker (Dame Rosie Winterton)
That was a very long intervention.
Paul Blomfield
I note the hon. Gentleman’s intervention and expertise on trade deals, but I do not think his question is really directed at me. He and others have made the point that the fact that the parliamentary scrutiny period for the CRaG process expired without debate means that there has been no real opportunity for us to look at the deal. The International Trade Secretary studiously dodged meetings of the Select Committee until it was too late for meaningful engagement. Today we are being asked to pass bare-bones legislation implementing an agreement that we have not been given the opportunity to scrutinise.
This matters because these deals set the scene for the way we approach post-Brexit trade negotiations. We have not done trade negotiations for many years, so it is important that we learn from the way this deal is handled and get it right in the future—we clearly did not get it right this time. Parliamentary scrutiny and oversight matter. As the Chair of the Select Committee pointed out, they are important not simply for the health of our democracy, but for our economy. Members have a valuable contribution to make, as we have heard in this debate.
The reasons for the avoidance of scrutiny are becoming clearer. I know the hon. Member for Huntingdon requested positivity, but we need honesty as well. The Government’s own estimate of the benefits of the Australia deal are that it will contribute 0.08% to GDP by 2035; their assessment of the New Zealand deal is that it will add nothing to GDP. As many Members have highlighted, for key sectors, the figures are worse.
The NFU is concerned that UK agriculture will suffer as a result of the Australia deal. Its president, Minette Batters, explained that
“Despite assurances that these sectors would be afforded some level of protection, we will see full liberalisation of dairy after just six years, sugar after eight years and beef and lamb after 15 years.”
That means no restrictions on imports and open market access, which leaves no protection for UK agriculture or our standards, rights and protections. She continued:
“Just as concerningly, the UK has agreed to beef and lamb quotas which will favour imports of high-value cuts, despite this being the end of the market where British farmers tend to derive any value from their hard work. It’s also difficult to discern anything in this deal that will allow us to control imports of food produced below the standards legally required of British farmers”.
Standards are not just important to farmers; 95% of British people think it is important to maintain British food standards through trade deals. There is also concern in the agriculture sector that Australia approves the use of almost three times the level of pesticides as the UK does.
I served with representatives from every party in this House and representatives from across business and industry on the UK Trade and Business Commission. As part of our work on this deal, we heard, for example, from a beef farmer, Jilly Creed, who explained that hormone beef and antibiotic use is a big concern in the sector. She illustrated the differences between UK and Australian practice in the industry in relation to animal welfare and environmental safeguards, telling us that
“Our cattle go 30 miles down the road and are slaughtered within two hours of leaving this farm. Cattle in Australia can travel up to 24 hours without food and water”.
Kieran Box, of Friends of the Earth, talked to us about environmental issues, saying that
“Prioritising a negotiating partner like Australia…with a lack of progress towards climate targets, with some fairly poor enforcement of environmental laws at the state level, and with the lack of enforceable commitments that we see in the FTA to progress on multilateral environmental agreements, it just feels that we have a set of multilateral environmental commitments on one side and we have a set of trade agreements on the other that pay lip service to those, but in practice they are contributing…to emissions.”
The TUC told us that the sanctions mechanism in these deals for issues such as workers’ rights degradation are so
“restrictive and difficult to be actually brought into action that we don’t think it’s going to be possible to use”.
It is clear that, desperate for a post-Brexit deal, the Government were willing to secure this one at any price, regardless of the damage to communities, industries and the environment. That underlines the importance of effective parliamentary scrutiny. There is real concern that the regulation-making powers in clauses 1 and 2 will enable existing legislation to be amended significantly without scrutiny, undermining parliamentary sovereignty and transferring yet more power to the Executive.
Sir Mark Hendrick
Is it not the case that the whole trick of Brexit was to pretend that trade deals with other countries could compensate for the loss of trade with the EU? We have seen the Government conducting a tick-box exercise where roll-over deals from the European Union were turned into so-called successes, when they were not successes—they were just a copy of what we had with the EU. Australia was the first opportunity to have a template for future deals, but the Government have fallen at the first hurdle.
Paul Blomfield
My hon. Friend echoes the point that I am making.
I am drawing my remarks to a conclusion, but I will make a further point. Trade deals and their implementation must be developed with engagement from business and workers so that they can operate effectively.
Angus Brendan MacNeil
I am grateful for the hon. Gentleman’s indulgence again. He has made some cracking points in his speech, including one about parliamentary input. We could argue that if we had a debate in Parliament beforehand, it would help our negotiating hand, because the negotiators at the table could tell their opposite numbers, “We won’t get this past Parliament, given the debate that we’ve had.” The involvement of Parliament might actually be—and have been—very helpful in those deals.
Paul Blomfield
The Chair of the Select Committee makes an important point. In an early intervention from the Government Benches—I do not think it was representative of the views of Conservative Members in general—it was said that Parliaments should not be involved in negotiating trade deals. That is clearly nonsense. That sort of early debate in Parliament would have informed and strengthened the negotiating process, and many of the concerns that have been expressed today would have been avoided.
When the Minister winds up, I hope that he will outline his response to the points that have been made, and what steps he feels should be taken to improve the scrutiny of future deals. I hope he would also agree that the powers exercisable under clauses 1 and 2 of the Bill should be constrained by an objective test of necessity, or at least be subject to the affirmative resolution procedure.
The Australia deal in particular damages our farmers in return for little economic benefit, by the Government’s own measure. It weakens food and animal welfare standards. It falls short on protection for workers. It fails to meet the commitments on climate action that Ministers promised. It is obviously—this is the point that everybody is making—a done deal; it is the new Prime Minister’s flagship agreement. But we need to address its deficiencies and learn the lessons for future FTAs, particularly about the process that we adopt as a Parliament.
I echo the comments made by the hon. Member for Huntingdon about the approach that we need to look at, which is used by other countries. It would provide the engagement that the Chair of the International Trade Committee talks about at an early stage of the process, and it would provide genuine involvement as the deal is secured. It would ensure not only that we have effective parliamentary scrutiny, but that we exercise parliamentary sovereignty, as we should.
Helen Morgan (North Shropshire) (LD)
I will keep my remarks brief—mercifully brief, most people might think—because I do not want to repeat much of what has been said in the debate. I am particularly grateful to my hon. Friend the Member for Chesham and Amersham (Sarah Green) for her remarks and to the hon. Member for Penrith and The Border (Dr Hudson) for his excellent speech.
I will put on record some of my concerns on behalf of my constituents. It is disappointing that there will not be a meaningful vote on the content of these trade deals, as we have covered at length today. My farmers have made it clear to me that they feel very much sold out by this agreement and that their interests have been bargained away for the sake of a good newspaper headline and an agreement with little forecast benefit to the UK.
I would like for a moment to touch on the concept of forecasts, having done them as a career before this one. Forecasts are by their nature not facts and are uncertain things, but there is no way that in my previous career I could have gone to my director with a forecast and said, “Well, it’s not as good as we wanted, but fingers crossed, as my last one was a bit on the low side, I’m sure it’ll turn out okay.” I do not think I would have walked away from that meeting with my job intact. I think we need to recognise that forecasts are always going to be wrong, but they reflect a range of possibilities and they are the best information we have. We should rely on the most likely outcome and bear in mind the upside and the downside provided. I do not think we should be dismissing forecasts as too pessimistic, because we do not have any better information to work from.
We have heard from many people who have said that the main point about farming, and it is a very good point, is that the failure to ensure that the world-leading environmental and animal welfare standards we are so proud of in the UK will be required of farmers who import to us risks undercutting our own farmers, and particularly our small family-owned farms. This comes at a time when the industry is being battered from all sides. The costs of doing business are spiralling, and we have heard today about fertiliser, animal feed and fuel prices. We are seeing the basic farm payment being reduced before its replacement is fully available, and we have an increasingly unpredictable climate for farmers to grapple with.
This is happening to such an extent that some of my farmers are now considering hanging up their wellies for good. I am sure that is not the Government’s intention—as the hon. Member for Totnes (Anthony Mangnall) pointed out, many Conservative Members represent rural constituencies—but, along with the financial incentives to encourage farmers to shut up shop, I fear that it may be the result. In rural constituencies, agriculture may not be the biggest factor, but it is the backbone of daily life and food production and, certainly in my constituency, is one of the most significant employers. It is just not okay to take these rural voters and these constituencies for granted by allowing these poor deals to go ahead.
I want to pick up a point about food labelling and consumer choice, because food labelling in this country is already confusing. British consumers can go into a supermarket and buy bacon that has been processed and packaged here and has a Union flag on the package, and they believe they are buying British. In fact, that pork will have been reared overseas, probably in the EU, in a place where lower standards are allowed, for instance in the use of farrowing crates. I have met local pig farmers who have been forced to kill pigs on farm while European carcases are processed in the factory down the road because those carcases are cheaper to import. I can see the situation becoming worse for our farmers, particularly for the beef and sheep farmers we are talking about in respect of these deals, if we allow this to go ahead.
As many Members have said, this Bill sets a precedent, so even if the volumes from these two deals are relatively small, when we go forward into our new negotiations we could be opening the floodgates to a large amount of produce that will undercut our farmers. We have also heard from Members that this is a time when food security should be top of our agenda. We should be producing as much as we reasonably can to keep food on the table, not introducing extra risks into British farming. I am disappointed to see the Conservative Government doing that, because they made iron-clad commitments that new trade deals would not undermine British farming.
It is important to mention the environmental cost. Allowing food produced to lower standards simply offshores our responsibility to lead the world in sustainable food production. I am reminded of a very silly joke, and I am afraid it is not funny: “What is that farmer doing over there? Well, he’s out standing in his field.” It is silly, but it is true, because our farmers are outstanding in their field. Of course, we can do more in British farming to protect the environment and improve animal welfare, but we have already shown global leadership and we should proudly continue to do so by insisting on a level playing field in the trade deals we sign.
The new Prime Minister was personally involved in negotiating both these deals. They have been assessed as damaging to the British farming sector and as producing little benefit to the wider economy, and they have not been allowed the full scrutiny of Parliament and the meaningful vote on their contents. I think that is an alarming precedent for the future, so I hope she improves in her new role.
Richard Foord (Tiverton and Honiton) (LD)
The chairman of the Farming Community Network in Devon wrote a column last year for the Devon Churches Rural Forum. John Wibberley wrote that he had collected agricultural postage stamps from around the world since he was a child, and one Australian stamp proclaimed that Australia should “produce food”. It seems that there is no such focus on food security from the UK Government, who are requiring British farmers to compete with exporting countries while eating away at the basic payment. The west country is home to more livestock than any other region of the UK. Can the Minister assure farmers in Devon that the Trade (Australia and New Zealand) Bill will not trade off the benefits for professional services firms with farmers’ livelihoods when we see a significant increase in the imports of Australian beef and New Zealand dairy products next year?
Gareth Thomas (Harrow West) (Lab/Co-op)
This has been an interesting and important debate, and the frustration of the House about the lack of scrutiny of these deals to date has been marked, with interventions from the Labour Benches and across the House, most notably from members of the International Trade Committee across parties. They have expressed striking concerns about, in the words of the hon. Member for Wyre Forest (Mark Garnier), the completely meaningless CRaG process that the Secretary of State allowed to unfold. It is also striking that there was absolutely no apology to the House in the Secretary of State’s speech for the process she had allowed to unfold. As my right hon. Friend the Member for Torfaen (Nick Thomas-Symonds) said, Ministers have hidden away whenever they could, rather than face sustained and serious questioning on the substance of these deals. The shadow Secretary of State also made it clear in his opening remarks that we will not oppose this Bill tonight, but we will seek to amend it in Committee.
Australia and New Zealand are two of this country’s greatest friends: allies in the Commonwealth; with us in the darkest moments of our shared history; and with shared values, similar governance and mutual security interests. We have so much in common. We should, and we will, want to work even more closely with both countries for our mutual benefit, as my right hon. Friend the Member for Warley (John Spellar) underlined in his contribution, in particular in deepening our economic and other ties in the months and years to come.
Angus Brendan MacNeil
The hon. Gentleman is in full flow, but I want to rewind to the CRaG process, on which he has shared the disappointment expressed across the Chamber and across parties. May I press him? Is he putting the House on notice during the current prime ministerial musical chairs that if Labour were to occupy the seats of power this would indeed change and there would be a more meaningful process than CRaG? That would of course put pressure on the Government to change it now.
Gareth Thomas
Of course we will want a much more meaningful process of scrutiny of trade deals when we switch Benches, but we also want to make sure there is a much more meaningful process in the few months left of the Conservative party’s time in government.
As I have set out, it was deeply disappointing to hear and share so many concerns of Conservative Members about the scrutiny allowed to this House of the trade deals the Conservative Government have negotiated with such key partners. We know the ministerial team at the Department for International Trade was in crisis, with the Secretary of State at loggerheads with the Minister of State, open and clearly deep personal animosity, and then junior Ministers resigning in protest over lack of support for British exporters. The chaos was obvious and clearly profound. As with so much from Conservative Ministers, the difference between what was promised and what was delivered is considerable.
The now Prime Minister said when she was still the Secretary of State for International Trade:
“I can confirm that we will have a world-leading scrutiny process…That will mean the International Trade Committee scrutinising a signed version of the deal and producing a report to Parliament”—[Official Report, 8 October 2020; Vol. 681, c. 1004.]
Only then, she said, will the CRaG process start.
The reality has been somewhat different. The Secretary of State was asked eight times to front up at the Select Committee and only finally turned up to answer questions after being shamed into doing so by her rightly angry Back Benchers. Ministers have failed to publish in full vital analysis or modelling to justify key provisions in the agreement, not least on agricultural quotas. The Government began the formal 21-day CRaG process before the International Trade Committee had produced its report, and even before the then Secretary of State had had the courage to show up to defend the agreement.
The Government refused to grant the Committee’s perfectly reasonable request for 15 sitting days between the publication of that extra critical information and the start of ratification of the CRaG process. As my right hon. Friend the shadow Secretary of State underlined, Lord Grimstone—then a trade Minister—confirmed in May two years ago that the Government did not envisage a new FTA proceeding to ratification without a debate having first taken place. World-leading it has not been.
It is similarly extraordinary the Trade and Agriculture Commission is not properly resourced. If that does not change, it will be clear that Ministers do not intend to allow serious scrutiny of future trade deals, either.
Sir Mark Hendrick
My hon. Friend mentions the Trade and Agriculture Commission, which it was promised would have proper trade union representation, but many months after it was set up, that has still not materialised.
Gareth Thomas
My hon. Friend is right to highlight that ongoing concern. His intervention reminds me that it would be remiss of me not to praise the International Trade Committee, whose work on the deal, notwithstanding all the difficulties that it has faced, is an example of the very best of our Select Committee system at work. Indeed, I say gently to its Chair that perhaps his Committee’s work is one small example of how the UK is stronger together.
I sympathise with the frustration of cross-party Committee members that no cohesive strategy for trade negotiations has been published, making it that little bit easier for Ministers to be pushed and pulled in whatever direction those with whom we are negotiating want. I hope that whoever is confirmed as Secretary of State for International Trade will address that key issue quickly. Why has there been such a contrast between what was promised to the House for such key deals and what has happened? Is it just incompetence, laziness or poor performance from individual Ministers, or is there something more profound here? Is it that the implications for procurement, British agriculture and tenant farmers—the hon. Member for Penrith and The Border (Dr Hudson) and others flagged up that issue—as well as for our food standards, for labour and human rights, for action on climate change, for buying British and for good digital regulation are so significant that Ministers felt it better to try to discourage a sustained look at the provisions in these deals?
The Australia and New Zealand trade deals are not going to deliver the sustained boost to economic growth that the country needs. Many have made that point. Welcome as the deals will nevertheless be, they will deliver at best marginal benefits for business, limited gains for consumers and few additional jobs. In the post-truth world that the Conservative party now sadly inhabits, the deals have been sold to us all as the start of a brave, amazing, fantastical post-Brexit era for British trade and growth. One can only wish that the same effort had been put into the actual negotiations as into the stories being told about these deals.
To be fair, there is genuine excitement from some about these deals: Australian farmers, Australian negotiators and New Zealand farmers were all delighted. On the upside, too, the deals have not led to the value of the pound dropping or a decline in foreign investment, and British farming and food businesses have not seen an immediate hit to their contracts. That, at least, is an improvement on the trade deal that the previous Prime Minister negotiated with the European Union. The overwhelming sense of the trade deals—with Australia in particular, and with New Zealand—is of deals done in a rush, with the now Prime Minister desperate for any deal, at almost any cost.
Some commentators have suggested—this point has been echoed by many in the debate—that in the rush to sign off the two new free trade agreements and bring the Bill to the Floor of the House, Ministers have failed to grasp how the deals leave Britain badly exposed for future negotiations with, for example, the US or Brazil. They argue that by undermining our food, animal welfare and environmental standards, the deals create difficult precedents in key parts of our economy, and that English farmers—and those in the devolved nations too—have been left most at risk of a long-term cumulative hit to their, and our country’s, economic interests, with the terms of these deals being used against us in even more significant negotiations.
It is, I have to say, extraordinary that Ministers made such a big offer to Australian farmers and got so little in return. The unconditional abolition of tariffs on Australian farm produce with few safeguards—a very big concession—is particularly surprising given that Ministers did not even negotiate basic protections for our most famous products, a point made by my right hon. Friend the Member for Torfaen (Nick Thomas-Symonds) and the SNP spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). Why did Ministers not prioritise protections of UK geographical indicators for our most iconic brands, such as Scotch whisky, Swaledale cheese, traditional Grimsby smoked fish, Yorkshire Wensleydale and Cornish pasties, to name just a few?
It is not just in Australia and New Zealand that Ministers cannot negotiate protections for our country’s best brands. Ministers still have not secured GI status in Japan for half the products they claimed they would. Indeed, ironically it appears Ministers are hoping their failure here will be partially put right through the knock-on impact of the EU’s negotiations with Australia.
John Spellar
My hon. Friend rightly concentrates on the Government’s deficiencies in handling the negotiations on agriculture, but, as a Member of Parliament representing the heartland of the industrial revolution, does he not see advantages for British industry in this agreement?
Gareth Thomas
Absolutely, I see advantages for British exporters, which is why, in my praise for my right hon. Friend in the opening part of my speech, I underlined that we want to see increased trade with Australia and New Zealand going forward.
Given the huge concessions Ministers made on access to our agricultural markets, it is frankly also surprising that they did not insist on more protection against competition from food imports produced to lower standards. Human rights, labour rights and climate change have also been largely unmentioned.
Turning specifically and lastly to the Bill, it gives Australia and New Zealand better access to our Government procurement market, worth almost £300 billion, in return for our firms getting a little better access to their procurement markets, worth just £200 billion together. We will seek to amend the Bill in Committee to ensure there is better scrutiny of the procurement sections of both UK trade deals. The Conservative party has been missing while the people of our country are struggling to make ends meet and deeply worried about how their businesses and other businesses will survive. The Bill will make little substantial difference to those challenges. A more robust trade strategy to generate wealth and share it more fairly is long overdue, and much more robust parliamentary scrutiny needs to be one of the lessons that Ministers learn from the passage of these two deals. We want greater trade with both Australia and New Zealand. We will not oppose the Bill tonight, but we will seek to amend it during its remaining stages.
The Parliamentary Under-Secretary of State for International Trade (Andrew Griffith)
It is a pleasure to reply to what has been a serious and, if I may say so, well-informed debate.
The passage of the Bill will allow us to ratify the agreements and thereby unlock a new chapter in the proud and vital tradition of Britain trading freely with the world. These are the first trade agreements that the UK has negotiated from scratch in over half a century and it is wholly appropriate that they are with our friends in Australia and New Zealand. My hon. Friend the Member for Mole Valley (Sir Paul Beresford) reminded us of the close links between our three nations, including his own dual nationality. My own brother lives in Australia and has an Australian family. According to the 2021 Australian census, a third of Australians have English ancestry. Similarly, 72% of New Zealanders are of European origin, with the majority of those estimated to hail from the UK. The right hon. Member for Warley (John Spellar) reminded us of the Anzac memorial in Whitehall, the Five Eyes partnership and AUKUS. As my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), now the Prime Minister—if I may be the first to congratulate her from the Dispatch Box—said when she launched the negotiations, these deals
“renew and strengthen our bond of friendship, help bring greater prosperity to our peoples, and send a clear signal to the rest of the world that like-minded democracies are prepared to stand up for free trade and the rules underpinning international trade.”
Sir Paul Beresford
We have been listening to Members, particularly from the Opposition, saying that we need protections and so forth to be built in. This goes two ways: if we build in protections, Australia and New Zealand will want to build them in, so a free trade agreement will cease to live up to its title.
Andrew Griffith
My hon. Friend is absolutely right. Although one has to work quite hard to find them, we have heard throughout this debate about a legion of opportunities that the Bill will open up. My hon. Friend the Member for Finchley and Golders Green (Mike Freer), late of the parish of this Department, spoke about the importance of the mutual recognition of professional qualifications, and we heard the same point from my hon. Friend the Member for Huntingdon (Mr Djanogly).
The nationalist spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), somewhat grudgingly accepted the benefit of the deal for Scottish whisky. My hon. Friend the Member for Mole Valley conjured up an image of a warehouse full of Silent Pool gin waiting to be shipped down under. We heard from my hon. Friend the Member for Meon Valley (Mrs Drummond) about her opportunity, and she does great work as chair of the all-party group on English sparkling wine for Hambledon Vineyard and Exton Park in her constituency.
We heard from the right hon. Member for East Antrim (Sammy Wilson) about the number of jobs in his constituency that are dependent on mining machines, with Australia, again, as the sole market for those. We even heard about the opportunity for the right hon. Member for Torfaen (Nick Thomas-Symonds) to export his book down under.
Angus Brendan MacNeil
I am hearing an awful lot of the typical boosterism from the Government—the spin and froth—but does the Minister accept the numbers? We need 62 and a half of these Australian-style deals to match the damage that Brexit has done to the United Kingdom economy.
Andrew Griffith
We also heard from my hon. Friends the Members for Totnes (Anthony Mangnall) and for Wycombe (Mr Baker) about the serial underestimate of the benefits of free trade. We Government Members are very clear about the benefits for consumers and producers and the competitiveness of this nation alike.
I will try to address as many of the other points as time allows. As is so often the case, I am afraid that the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) raised the prospect of the NHS being at risk. Let me be very clear: this and our other free trade agreements do not, and will not, cover healthcare services in the UK—neither will they threaten the standard of care nor the Government’s ability to decide how we and this Parliament organise our healthcare services in this country in the best way for patients. The NHS is not at risk from free trade agreements and I agree with the right hon. Member for Warley that the House should not conflate the two.
A number of serious contributions were made about agriculture. We understand fully hon. Members’ concerns—we heard from my hon. Friend the Member for Penrith and The Border (Dr Hudson) and, again, my hon. Friend the Member for Totnes. British farming is vital to our trade policy. Any deal that we sign needs to work for UK consumers, farmers and food producers. I have many of those in my constituency and will always look out for them.
Matt Western (Warwick and Leamington) (Lab)
Like the Minister, I have farmers in my constituency; I met them last week and we discussed the trade deal and its likely impacts. Is he concerned, as they are, about the sort of economic impact that it will have? Will he confirm that the Government have undertaken a full economic impact assessment of the deal?
Andrew Griffith
The Government have undertaken that and, indeed, the independent Trade and Agriculture Commission has given the deal a green light and a clean bill of health, in terms of its impact.
Andrew Griffith
I will make some progress, but I will come back to many of the points that the nationalist spokesman made.
The issue of antimicrobial usage was raised. The TAC outlined in its report on the Australian deal that the free trade agreement will not lead to increased imports of products commonly produced using antimicrobials, largely because it does not reduce tariffs on those products. They are out of scope.
The nationalist spokesman and the hon. Member for Airdrie and Shotts (Ms Qaisar) talked about the role of the devolved Administrations in the process. The negotiation of trade agreements is a reserved matter, whether the hon. Member for Inverness, Nairn, Badenoch and Strathspey likes it or not, but the devolved Administrations are responsible for implementation in matters of devolved competence, which includes certain provisions relating to public procurement. The Bill applies, as it should, to the whole United Kingdom and will confer concurrent powers on both UK and devolved Ministers, or on a Northern Ireland Department, to implement public procurement provisions in both the Australia and New Zealand free trade agreements. They are limited powers specific to implementing these agreements alone.
Not for the first time, nationalists are promoting an act of self-harm. These trade agreements have the potential to deliver sizeable benefits across the four nations; the Australia agreement alone could mean an increase in GVA of about £200 million for Scotland, Wales and Northern Ireland, which will be valued by their citizens. My Department is seeking legislative consent from each devolved legislature and is engaging with the DAs, building on the extensive engagement—acknowledged on both sides—that was undertaken during the negotiation of both trade agreements at ministerial and official level.
As my right hon. Friend the Secretary of State said in her opening remarks, we are committing not normally to use these concurrent powers without a devolved Administration’s consent, and never without consulting them first. The same commitment was made regarding the use of powers in the Trade Act 2021 and has been honoured by the UK Government.
The nationalist party spokesman—[Hon. Members: “National!”]—was positively wistful for a European agreement with New Zealand. What he talked about is much more protectionist, offers far fewer benefits for UK consumers, and if we were still in the European Union, he would have had no scrutiny or influence over it.
Angus Brendan MacNeil
On a point of order, Madam Deputy Speaker. Is it in order to send this Government to Brussels to learn some lessons in respect and how to run a Union? This is not a way to run a Union.
Andrew Griffith
A number of right hon. and hon. Members, including my hon. Friends the Members for Wyre Forest (Mark Garnier), for Huntingdon, for Totnes and for Meon Valley, raised parliamentary scrutiny. They made their points eloquently and in a collaborative way. I am sure that they will have been listened to, especially as they relate to the interaction with the Select Committee. It is clear—the point has been made across the House—that the Committee has done its work diligently and that its Chairman and members are effective.
The Government acknowledge the importance of parliamentary scrutiny of our ambitious trade agenda, and we want to get it right. Indeed, it is always a delight for this House to debate the life-enhancing virtues of trade. In human evolution, it must rank alongside language and the opposable thumb in its utility and impact. Free trade has vastly extended the length and quality of life of billions of people on this planet, many in the most desperate and impoverished parts of the world. That is why it such is a serial disappointment on this side of the House that Opposition Members seem so determined to place a spoke in the wheel of this country’s ability to set its own independent trade policy. With respect, we will take no lessons on scrutiny from those who voted again and again for the zero scrutiny that comes from British trade policy being decided not in Holyrood or Westminster, but by bureaucrats in Brussels.
Anthony Mangnall
The Minister is doing an excellent job at the Dispatch Box and is making a very good speech, but given what has been said in this debate, when the Committee has done a report on the New Zealand free trade agreement, will he commit to a debate under the CRaG process with a votable motion at the end?
Andrew Griffith
I thank my hon. Friend for his contribution. He has made his point very clearly, and I am sure that the Government have heard it.
This Bill is the first step in the creation of the outward-looking, internationalist, truly global Britain that we envisage for our future. It is not the end of the Government’s ambition, but the beginning. It is our objective to place the UK at the centre of a network of values-based free trade agreements spanning the globe. Trade is an issue that transcends party politics. It is intrinsic to our way of life. Fewer barriers mean more opportunities for our business, more economic growth, better jobs, and higher wages for our people. I commend the Bill to the House.
Question put, That the Bill be now read a Second time.
Business without Debate
(2 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Delegated Legislation
(2 years, 3 months ago)
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Madam Deputy Speaker (Dame Rosie Winterton)
With the leave of the House, we will take motions 4 and 5 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Sanctions
That the Republic of Belarus (Sanctions) (EU Exit) (Amendment) Regulations 2022 (SI, 2022, No. 748), a copy of which was laid before this House on 4 July, be approved.
Capital Gains Tax
That the draft Double Taxation Relief and International Tax Enforcement (Luxembourg) Order 2022, which was laid before this House on 20 June, be approved.—(Adam Holloway.)
Question agreed to.
Madam Deputy Speaker
We now come to motion 6 on the Committee on Standards and motion 7 on the Committee of Privileges. Not moved.
Independent Brewers: Small Brewers Relief
(2 years, 3 months ago)
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Owen Thompson (Midlothian) (SNP)
It is good to see such an amazing turnout for tonight’s Adjournment debate and such an interest in small brewers relief!
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Will right hon. and hon. Members please leave quietly, because if they do not, we will not be able to hear the Adjournment debate?
Owen Thompson
Thank you, Madam Deputy Speaker. Take two. Politicians like to talk about how everything, in one way or another, is political. We would say that, wouldn’t we? But I think it is genuinely true; decisions taken in places such as this set the scene for our broader social and cultural lives. How we answer questions such as what gets support, what is left to the whims of the free market and how much is something taxed can have a direct impact on how people live, what products they use, what they eat and what they drink. That is certainly the case when it comes to beer.
When we look at Scotland and the UK’s independent brewing scene today, we see diversity and growth, but this is not how it has always been. Only 20 years ago, there were only about 400 brewers in the UK, whereas today the number stands at about 1,900, which is five times as many, with nearly one in every parliamentary constituency. Midlothian, my constituency, punches well above its weight when it comes to brewing, as it does in many other regards; to name just a few local companies, we have Stewart Brewing, Cross Borders, Top Out, Otherworld and Black Metal. The overall picture in recent years has been a booming sector coming out of nowhere and making a huge economic impact.
According to the Society of Independent Brewers, which is represented here tonight with Barry Watts, Keith Bott, Eddie Gadd, Roy Allkin and Greg Hobbs in the Gallery—I am delighted to see them here and I thank them for their support in campaigning on this issue—small independent breweries contribute about £270 million to GDP each year and employ about 6,000 full-time staff. That is an average of 4.1 employees per brewery. A great deal of that success is precisely because in 2002 the Government of the day recognised that existing policy—beer duty—was artificially holding back a sector. In addressing that, politics has enabled craft beer to flourish, to the point where it is now embedded in our culture. Much of this is thanks to small brewers relief, which celebrates its 20th birthday this year. Conveniently, today of all days, the Five Points brewery in Hackney hosted a 20th anniversary celebration to mark the good that SBR has done. Sadly, parliamentary business meant that I could not make it along, but I am told that it was a roaring success, and I hope the Minister will join me in congratulating the organisers.
SBR was introduced to help smaller craft brewers compete in a marketplace dominated by large and global brewers. It allows smaller breweries who make less beer to pay a more proportionate amount of tax, as with income tax. For those who produce up to 5,000 hectolitres a year, which, for clarity, is about 900,000 pints and enough to supply around 15 pubs—or one Downing Street Christmas party, perhaps—SBR means a 50% reduction in the beer duty they pay. Above 5,000 hectolitres, brewers pay duty on a sliding scale, up to the same 100% rate that the global producers pay. This enables brewers to invest in their businesses, create jobs and compete with the global companies.
However, SBR has always had a major glitch. Once a brewer makes more than 5,000 hectolitres, the rate at which duty relief is withdrawn acts as a cliff edge. As a result, instead of empowering small brewers to grow, SBR puts up a barrier, and all because of a wee technicality. It is not the sort of thing that should take years and years to address, but sadly that is exactly what has happened.
As far back as 2018 the Treasury announced a review of SBR to address the cliff edge. Since then, brewers have been barraged with a review in 2019, a technical consultation in 2021, a call for evidence on the alcohol duty system, and a consultation on yet another new system this year.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I think a number of us were discussing this matter back in November 2020. One of the drivers then was the sense that we needed to support small, independent brewers coming out of covid. Here we are almost two years down the road. We need to support them in relation to covid and in relation to energy. The need to incentivise support from this Government—we all agree how important the brewers are to our communities, as well as to the economy—is just as important now as it was then, if not more so. We would welcome a supportive response from the Government.
Owen Thompson
The hon. Lady makes an excellent point. I will speak later about some of the issues that businesses currently face with regard to energy costs.
Jim Shannon (Strangford) (DUP)
In my constituency, as in the hon. Lady’s, we have breweries. I am reminded of Bullhouse Brewery in Greengraves Road in Newtonards, a local family business. It produces an incredible product that sells well, but it is a small brewery. It really is in that category. Without the assistance of small brewers relief, there is no guarantee that our independent brewers would be able to survive. Does the hon. Gentleman agree that to ensure that our local brewers are able to reman comfortably on their feet, there must be greater relief on their beer duty to ensure that they are not penalised by crippling tax in years to come? The very fact of what local brewers do means that they are intensive users of electricity so the costs for them are multiplied to a place where they may not be able to survive.
Owen Thompson
I agree with the hon. Gentleman. Many small family brewers are so much a part of their local communities. It is not just about the business, it is what they do for their local communities.
Each proposal that the Government have brought forward so far has been a step up from the last, but has missed the mark in crucial ways. So let us look at the most recent reform package that the Treasury has put on the table—what it gets right, which it does, and where we still have some way to go. I welcome last year’s announcement that the 50% rate would be reduced to 2,500 hectolitres. This came off the back of a great deal of lobbying from campaign groups and Members across the House, and demonstrates the cross-party willpower to get this right for our brewers. That is not to mention a public petition of more than 50,000 signatures. But issues remain.
Brewers cannot wait any longer for another half-right, half-wrong proposal. This time, the Treasury must listen to brewers’ calls, act decisively, and implement that decision. No more leaving brewers in the lurch. They have a right to know the final details of what the Government are planning and when it will be introduced so that they can be prepared for the changes. So, having spoken to SIBA and to local brewers in Midlothian, I am asking the Treasury to address the following problems in its most recent proposals with transparency and urgency. I and many small brewers have serious concerns about the ways in which these reforms could turn small brewers relief into big global brewers relief. Time and again, the current proposals open the door to benefiting the big players, and it is almost starting to look as if that is a feature, not a bug. For one, the Treasury needs to scrap its plan to set the start and end point of relief depending on the UK’s average alcohol by volume. This nationwide average is heavily skewed towards global brewers, and it needs to be the average of small brewers instead. Then we have the fact that the reduced rate of SBR will be widened from 2.8% to 3.4% ABV, at £8.42 instead of £19.08.
SIBA has told me that it is concerned that this allows large brewers to undercut smaller ones—they could easily cash in on the benefits by altering their recipes to a lower ABV. Not only would that cost the Treasury an estimated £200 million a year in lost revenue, but it would fundamentally go against the spirit of SBR. On top of that, we have the Treasury’s decision to maintain the Farmgate exemption, which exempts 80% of cider makers from paying any duty. Small cider producers absolutely deserve parity of support, but there is no getting round the fact that the cider sector has a very different landscape. Global producers account for 87% of the cider sold in pubs, so it is global producers again that disproportionally benefit from the Farmgate exemption.
According to SIBA, taxing cider at the same rate as beer could raise £360 million a year for the Treasury, so why is it not happening? Are the Government scared of upsetting big business yet again? Using SBR reform as a means of opening the door to advantaging global brewers just does not make sense, yet it seems to be the direction of the Treasury. At best, this is an honest oversight. At worst, it is as if the Treasury is trying to stick to these plans no matter what. I think that questions need to be asked about what communications and hospitality the Treasury might have received from some of these large global brewing companies. I urge the Minister to ensure that that is not the case and that small brewers relief is genuinely to support small brewers and not be that in name only.
Aspects of the latest proposals for SBR reform also undo some of SBR’s spirit of innovation and growth. When calculating a producer’s average ABV, the proposed new small producer relief will include everything the producer makes—beer or otherwise. I am sure that it has not escaped the notice of the Minister or others in the Chamber that many small brewers are branching out and not simply making beer but also spirits such as gin or whisky, and this innovation should be welcomed. However, under the current plans, producing spirits will send a brewer’s average ABV skyrocketing. Small producer relief will act as a roadblock to innovation. Instead, the average ABV calculations should only include products of up to 8.5%—the same amount that actually qualifies for relief.
The Treasury also needs to urgently clarify some issues around its simplification of ABV bands surrounding SBR. It is welcome that SBR will now apply to beer below 2.8%. That can only encourage a trend of lower alcohol beer to aid in healthier drinking habits. However, will this affect brewers that currently receive up to 50% relief on beer between 2.9% and 3.4%. There is zero clarity on this and brewers need an answer. I urge the Minister to address this in his response.
Furthermore, under the current proposals, the Treasury is planning to introduce a reduced rate of about 5% for draught products below 8.5% ABV in large containers of at least 40 litres. This is a positive step forward, but why stop there? The Minister will be aware of SIBA’s “make it 20” campaign. Small brewers and community pubs often use 20 or 30 litre containers to keep the beer fresh. Even some of the larger pub chains are using that size of containers because of the freshness of the product. Will the Minister commit to expanding the reduced rate to include containers of that size? Go on, prove that the Treasury does actually care about the wee guys after all. Crucially, the Minister needs to guarantee that this is full SBR, by ensuring that relief fully applies in cash terms to the lower rate, main, higher and the draught products rate so that small brewers can continue to compete.
On top of this, the way in which the small producer relief is calculated is a completely untested system. Rather than using a simple percentage, brewers will have to consider different cash reliefs at different alcohol bands, based on hectolitres of pure alcohol. It is unnecessarily complex and could act as a cash cap, once again discouraging brewers from innovating.
Brewers do not just need solutions to those issues; they need them to happen now. Frustratingly, however, delay and confusion have been the name of the game so far. First, brewers were promised an announcement on the final details of SBR reform before the summer, but it would appear that the Government have been a bit too busy over the summer to have got around to it, so it never happened. I hope the Minister will take today as an opportunity to give a long-awaited update and maybe even a date of publication for it. Secondly, SBR reform has been rolled into the wider alcohol duty review. Small brewers simply cannot wait for that review’s findings, so I hope the Minister will listen to calls for the reform to be progressed on its original timetable for February 2023.
This is not good enough. The urgency of supporting the brewing sector is possibly more serious now than ever before. Under this Government, the mass closure of pubs and breweries is more likely than it has ever been. The industry is facing a multi-faceted crisis of covid recovery, energy price hikes, Brexit and climate issues.
The brewing industry was one of the pandemic’s worst-hit sectors, with pub closures locking it out of 80% of its sales. Production fell by 40% in 2020 and remained 16% below 2019 levels in 2021. On average, each small brewer came out of the pandemic with £30,000 of debt. The Scottish Government’s brewers support fund provided millions of pounds of direct support for the sector, but there was no equivalent from the Westminster Government, whose wider package of hospitality support failed to include hundreds of brewers. As a result, the UK lost 160 active brewers during the pandemic and has lost between 40 and 60 more this year.
Yet there is a growing consensus in the sector that the current crisis is far more worrying than even at the height of the pandemic. Skyrocketing energy bills are putting brewers’ futures at risk. One Midlothian brewer told me that their electricity bill was currently triple what it had been a year ago, at an unimaginable £90,000 a year. They estimated that by next year it would reach £180,000. Another local brewer is paying £21,600 more on energy this year than it did last year, almost enough to hire yet another a new employee.
The energy crisis also has indirect effects on the supply chain, as the energy cost of producing certain materials skyrockets. For example, I have been told that the price of buying cans to put beer in has risen from 9p to 14p, leading to massive increases in costs.
Then we have Brexit, which has created not only product movement issues, but a change of attitudes among buyers on the continent. At a time when the cost of living crisis could mean people spending less money in pubs, the last thing brewers need is a complicated export processing system, but that is exactly what Brexit has given them. A brewery in Kent that was chosen by the Department for International Trade as a Brexit export champion recently revealed that it only has one EU customer left. When EU buyers look at the paperwork needed to trade with UK brewers, it seems the conclusion they come to is, “Why bother?”.
The climate crisis is also wreaking havoc on the industry. With the recent high temperatures and drought, hop harvests in Europe are expected to be down 20% to 40% on last year, which means higher prices yet again in the coming months. As if that picture was not worrying enough, there is yet another shortage of CO2, a key part of the brewing process, again partly due to energy prices.
There are glimmers of hope that I have seen when speaking to local businesses throughout the summer. Many are responding to energy prices and CO2 shortages by installing green technology to help with renewable energy generation, storage, electrolysis and CO2 recovery. The Government might not be engaging with long-term planning to adapt to this crisis, but local businesses in Midlothian certainly are. They are turning up the dial on the green revolution in the place that matters most: their own back yards.
However, that kind of long-term investment is exactly that—long term. The up-front costs can be prohibitive for many, while Government funds such as the industrial energy transformation fund are again aimed at larger businesses. Distilleries benefited from £11 million to help them to go green, so I would be grateful if the Minister would consider further steps to help small and medium-sized enterprises such as small brewers to cover the up-front costs of some of those innovations.
I am here because of Midlothian, to fight the corner of its residents and businesses. That is why I have been talking to local businesses over the summer to understand the issues they are facing in the midst of this crisis, and it is why I am standing here today to communicate those messages to the Government. That is how the system is meant to work. It would be a huge failure of the system if the Treasury were to shrug its shoulders and plough on with these poorly thought-out plans regardless.
Midlothian is blessed with many independent brewers, which are a huge asset to the local economy, the community and its culture, but the Treasury’s current proposals for SBR reform seem to put global producers first. They undermine the incentive to grow and do not go nearly far enough to support these valued businesses through the energy crisis, which is existential for many. The back and forth of four years of fiddling with SBR reform simply has to end. We need the Government to act today to give brewers clarity on what reform will look like, to address the concerns about SBR reform benefiting global companies and discouraging innovation, and to deliver urgent support for energy bills and switching to green energy production. That way, I hope that we can continue to raise a glass to our independent brewers for years to come, because they give so much to all our communities.
Robin Millar (Aberconwy) (Con)
I congratulate the hon. Member for Midlothian (Owen Thompson) on securing the debate on this important issue. I know that brewing generally is of great interest to many colleagues.
My constituency of Aberconwy is home to some of the finest—I might say the finest—local food and drink producers anywhere in the UK. I am proud to support that industry and sector in my constituency. I welcome the bold reforms to alcohol duty, and the support for pubs and brewers, in the last Budget. I am also proud to SIBA, the Society of Independent Brewers, in its “Make it 20” campaign, which seeks to apply a 5% reduction in beer duty to 20 and 30-litre kegs. I will briefly outline why the campaign is important to small breweries by using the example of the Wild Horse Brewing Co in Llandudno.
The company is in my constituency and sells more than 70% of its annual production in 20 and 30-litre kegs. As it has grown, it has made a significant investment in 600 30-litre kegs. Most of its beer is sold to small independent bars, pubs and restaurants, which rely on smaller containers in order to offer variety and keep the beer fresh. Given that most of the brewery’s beer is sold in 20 and 30-litre kegs, it will not benefit from the 5% reduction in beer duty, and because none of its beers is under 3.5%, it will not benefit from the widening of the lower duty bracket. This is a business that, with support from the UK Government, has overcome the challenges of the pandemic, and has invested in its future and in the town of Llandudno in my constituency. Over the last 18 months, Dave Faragher, the managing director and founder, has increased his team from seven to 10 employees, two of whom originally started with the UK Government’s kickstart scheme.
Breweries and pubs are businesses that are vital to jobs and communities throughout the UK, especially in constituencies such as mine. Llandudno is known as the queen of resorts and is one of the largest resort areas in Wales. It is important that such businesses are supported and their contribution to the economy recognised, yet there can be no doubt that these same breweries and pubs have faced unprecedented challenges over the last three years. The sector bore the brunt of the economic consequences of the lockdowns and the trading restrictions of the pandemic. It now faces the challenge of rising costs of ingredients and energy—issues of huge concern for such an energy-intensive industry.
Just this weekend, small breweries learned of a threefold increase in CO2 prices and a likely supply crunch at the end of September. Production of CO2 in Billingham—one of the largest producers, which is responsible for about 60% of UK production—will end and Ensus will stop its production for three weeks. As we know, CO2 is vital not just for breweries, but for the entire food and agricultural sector, which falls within the purview of the Department for Environment, Food and Rural Affairs. I therefore must take this opportunity to call on DEFRA to take urgent action, as happened last year—it has shown itself able and willing to do so—to secure CO2 production and supplies, and to reduce costs.
Jim Shannon
The crucial factor is that either the small brewers relief scheme is enabled to help small businesses, or there will be closures and job losses, with no money from those wages going into the economy. The Government and the Minister need to enable the small brewers relief scheme in a way that helps those businesses now, as energy rises. It is a straightforward decision—one way or the other.
Robin Millar
I thank the hon. Gentleman for his intervention. I think it is fair to say that businesses, and I count breweries among them, are not looking for charity. They recognise that the Government are not here to give recompense for loss of profits and the like. They are looking for the help they need to get through these tough times.
I am deeply sympathetic to businesses that are facing challenges and working to overcome them, day in, day out. I believe that most are not looking for charity or a hand-out. They just want help to get through another set of challenges. I urge the Government to review the arbitrary nature of small brewers relief and to make 20-litre and 30-litre kegs eligible for the 5% reduction in duty. Small brewers and hard-working small businesses at the heart of our communities, such as the Wild Horse brewery in Llandudno, deserve that consideration.
Andrew Jones (Harrogate and Knaresborough) (Con)
I thank the hon. Member for Midlothian (Owen Thompson) for securing the debate and allowing other Members to participate, now that we have a little longer for this Adjournment debate.
I will not detain the House long because I have spoken on this issue many times before. I initiated the small brewers relief review as a Treasury Minister, quite some time ago. I did so because during preparation for the 2017 Budget, I spoke with brewers large and small. There is clear affection for the industry across this House; every constituency has examples of businesses that reflect the ingenuity, creativity, enterprise and character of the area. These businesses are deep in the DNA of our country, so a taxation regime that disincentivises the sector needs to be corrected. One of the most depressing conversations I had in the run-up to the 2017 Budget was with a small brewer who said they had stopped their export operation simply because they had reached the top of the threshold for relief. We have a taxation structure that disincentivises activity when we want and need growth, particularly in exports. That is where this proposal came from.
I tried to ensure that we had an industry-wide solution, with the industry coming together, because frankly this has been the source of some dispute. That was not to be—the industry could not come together—but significant work has been done by successive Exchequer Secretaries, resulting in proposals that have brought the industry together and are broadly supported. That is a good thing. This has been a good piece of work, done as part of a broader alcohol review, and I have a couple of points to make to my hon. Friend the Exchequer Secretary.
We need to get on and implement the findings of the review, simply to end the uncertainty that has dogged the sector. The hon. Member for Midlothian and my hon. Friend the Member for Aberconwy (Robin Millar) are right to have articulated the challenges and broader business pressures facing the sector, so let us act in the one area we can control and implement the review right away. As I said, this is part of a broader alcohol review, other parts of which have not landed quite as well as the beer category. I urge the Minister not to delay implementing the beer review while work on other parts of the sector is refined. Get on with implementing these findings, because I think it would be a popular move and end uncertainty. I am thinking in particular of activity that will incentivise growth. People are stopping product and market development when they hit a top threshold. The proposals will go a long way to make that problem disappear.
We also have proposals in mergers and acquisition for production to absorbed over three years rather than one, so that businesses can make accommodation for that. That is a good thing. We have seen depressed M&A activity in this sector, because of the historic rules, but the proposals will correct the problem.
I have spoken with local brewers in Harrogate and Knaresborough and beyond in the past few weeks, and the message from them is, “Please get on with it.” We need to create a regulatory taxation platform that encourages growth and corrects the problems that the existing SBR had created, while recognising that, as the hon. Member for Midlothian articulated, it has driven new entrants into the market. We are good on start-ups, but bad on scale-ups—we can correct that by implementing the review.
The Exchequer Secretary to the Treasury (Alan Mak)
I begin by congratulating the hon. Member for Midlothian (Owen Thompson) on securing the debate and commending him for his ongoing advocacy on behalf of the brewers and distillers from his constituency. I join him in congratulating the organisers of the 20th anniversary celebration he mentioned. As he said, he has some notable examples of beer and gin producers in Midlothian. I understand that brewing in Scotland dates back to the neolithic period—truly some very small brewers indeed.
As the Member for Havant, I too am proud of the brewing heritage in my constituency. In fact, the combination of a thriving local malt trade and fine spring water meant that beer was a mainstay of Havant’s local economy for centuries. Although it is many years since the final kegs rolled out of our last active brewery, that legacy is still visible in some of our town’s buildings.
Let me also thank the other hon. Members who have taken the time to contribute to this debate, and who represent all four nations of the United Kingdom, which reflects the appeal and significance of our first-rate alcohol industry. I particularly recognise the contribution of my predecessor, my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), who played a key role in initiating the review.
Before I address the various points raised today, I will briefly explain the wider reforms, the rationale for them and why they are important. The key point is that the Government are making changes to outdated alcohol tax laws—laws that are arbitrary and inconsistent. Crucially, the result of these reforms will be a system that is much fairer, simpler and more aligned with public health goals than the system we inherited from our membership of the European Union. EU law contains many inconsistencies and barriers to simplification, including, for instance, preventing member states from taxing all types of drink in proportion to their alcohol content.
In contrast, the Government’s proposed reforms, as set out in last year’s autumn Budget, radically simplify the system and tax all products in proportion to their alcohol content, which ensures that higher-strength products pay proportionately more duty. We are also introducing new reliefs to support pubs and help small producers to expand and thrive. The Government remain committed to delivering alcohol duty reform. We are considering the feedback that we have received and we will respond in the coming months.
Put simply, the reform of alcohol tax laws is long overdue. These laws have barely changed since the 1990s, partly because the incoherent and prohibitive EU rules that we experienced in the past have hindered that much-needed change. In the current system, for instance, a high-strength white cider pays less duty per unit than a low-strength beer. Sparkling wine—a sector in which the UK is starting to lead the world—pays much more duty per unit than still wine, even when it contains substantially less alcohol. Fortified wines, which are made with the addition of spirits, pay less duty than a liqueur made with spirits, even if they are the same strength.
The plain fact is that we inherited 15 rates from the EU across five different products with three different methods of taxation. As such, the current system is complex and archaic. In fact, the Institute of Economic Affairs think-tank has said that it “defies common sense”. For their part, producers, importers and exporters in this country have called the system “distorted” and
“perversely incentivised to produce stronger drinks”.
They have welcomed the opportunity for reform.
Now that we have left the EU, we have an opportunity to create alcohol laws that are more rational, and that support the many and varied producers and traders in this country. At the autumn Budget last year, the then Chancellor laid out the significant benefits we planned to introduce with our reforms, which include a radically simplified system that slashes the number of bands from 15 to six and taxes all products in proportion to their alcohol content; taxing all products in the same way, which is a rational policy that was banned by EU law; ending the premium rates on sparkling wine and equalising them with still wine, and substantially reducing duty on rosé; introducing new rates for low-strength drinks below 3.5%, which will encourage innovation and reflect consumer preferences for low or no alcohol drink alternatives; and cutting duty on a 3.4% beer by 25p a pint.
We are also modernising the taxation of cider, targeting unhealthy and problematic white ciders while cutting the duty for lower ABV, craft and sparkling ciders; freezing duty rates for the third Budget running, saving consumers £3 billion over the coming years; and, of particular interest to Members tonight, we have introduced small producer relief, supporting the many small artisan alcohol producers who continue to create world-beating products in this country.
The hon. Member for Midlothian asked about the possible behaviour and role of global producers and the cost of reducing the rate for beer below 3.5% ABV. The Government’s intention is to encourage reformulation and innovation in lower-strength products, including by larger brewers, and this proposal received broad support from the sector during the call for evidence. The costs of these alcohol duty reforms were published at autumn Budget 2021, and they took account of the impacts of reformulation between bands. A tax information and impact note will be published alongside the draft legislation in the usual way.
The hon. Gentleman mentioned that, since 2002, small brewers relief has provided reduced rates of beer duty for small producers. The rapid and successful growth in the sector since that relief was introduced has undoubtedly contributed to the diversity and quality of beers on the market. This is good for producers and good for consumers. However, we must also recognise that responses to the technical consultation the Government ran on SBR pointed to flaws in the system. Some called it “too generous”, going beyond the relative cost disadvantage experienced by small producers. Others called it “distortive” and “flawed”. Alongside our other generational reforms, we have the opportunity to improve on the positives of SBR and extend those benefits to other industries.
While no final decisions have been taken, the new relief we announced at the Budget includes expanding the relief across all categories, allowing small producers to diversify their product range to other products below 8.5% ABV, while still benefiting from reduced rates; introducing a more progressive taper, removing the cliff edges from the previous scheme, which the hon. Gentleman mentioned; expanding the scheme to products below 2.9%, encouraging innovation in the growing low or no alcohol market and in turn helping consumers make healthier choices while still supporting our outstanding alcohol industry; and, let us not forget, introducing draught relief, a move that directly supports the great British pub with reduced duty rates on draught beer and cider so that consumers can enjoy the fantastic products made by our small producers in their favourite local.
The hon. Gentleman mentioned, and the point was reinforced by my hon. Friend the Member for Aberconwy (Robin Millar), the issue of container size, and the fact that small independent brewers and community pubs often use 20 and 30-litre containers for their beer. I want to assure them both and the wider alcohol community that, while I cannot make any announcements tonight, we have listened and we understand their point.
The hon. Member for Midlothian also raised the issue of help for the sector as it recovers from covid-19. While the final design of the alcohol duty reforms will be confirmed shortly, I want to reassure him that the Government recognise the pressures facing the sector. I remind him that the Government have already introduced a range of measures that continue to provide significant support for businesses, including cutting business rates by 50% for eligible retail, hospitality and leisure businesses in this financial year. He asked about support for energy costs, and as he will have heard from the Prime Minister this afternoon, announcements will be made this week and in the coming weeks, so I reassure him that he can look out for those.
The hon. Gentleman also asked whether the full SBR rate will be maintained at the new lower rate, whether total production across all alcoholic products will be used to calculate the SPR and whether the SPR will be launched at the same time as the other alcohol duty changes. I reassure him that the Government recognise the success that SBR has brought to the industry, and we look forward to seeing the benefits shared with other sectors. While I cannot make any announcements tonight, I hope he understands that the Government are carefully considering the feedback stakeholders shared with us through the consultation and we will publish our response shortly.
The benefits I outlined earlier would not have been available to this country before we left the EU. The reality is that we have a once-in-a-generation opportunity to improve an outdated system, providing new incentives for producers to grow and innovate and a major boost for pubs. Our reforms are more rational, fairer, better aligned to public health goals and more in tune with consumer preferences, and they support the Great British pub and the small producers delivering fantastic world-class products.
Let me again thank the hon. Member for Midlothian and all hon. Members across the House who have contributed to this evening’s debate. I also wish to assure them that we will soon confirm the details of these wider reforms and publish the draft legislation, alongside the Government’s response to the consultation.
If, indeed, we have been brewing alcohol on these islands for thousands of years I see no reason why we should not continue, with even greater success, for thousands more. Given a chance, I am sure those neolithic producers of beer would have enjoyed the benefits afforded by small brewers relief, and they would almost certainly have welcomed the opportunity to expand their operation with the reformed small producer relief.
Question put and agreed to.