Trade (Australia and New Zealand) Bill

(Limited Text - Ministerial Extracts only)

2nd reading
Tuesday 6th September 2022 Commons Chamber

[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.

[Anne-Marie Trevelyan]

rose—

[Jim Shannon (Strangford) (DUP)]

Will the Secretary of State give way?

[Anne-Marie Trevelyan]

I will give way.

[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.

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[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?

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[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.

[Drew Hendry]

Will the Minister give way?

[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.

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[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.

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18:00

Division 54

Ayes: 309

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Conservative: 296
Democratic Unionist Party: 7

Noes: 56

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Scottish National Party: 35
Liberal Democrat: 11
Plaid Cymru: 3
Independent: 2
Alliance: 1
Social Democratic & Labour Party: 1
Green Party: 1
Alba Party: 1

Bill read a Second time.