Free Trade Agreement: New Zealand

Debate between Ben Lake and Anne-Marie Trevelyan

Thursday 21st October 2021 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

Diolch, Madam Deputy Speaker. I am sure that the Secretary of State will be aware of similar concerns expressed by the agricultural unions in Wales overnight and this morning in the light of the agreement in principle. Given that the Government’s own analysis suggests that the number of people working in agriculture may be negatively impacted by this deal, I think those concerns are well founded. May I ask her, quite simply: how will Ceredigion farmers benefit from this deal?

[Anne-Marie Trevelyan]

Farmers will have the opportunity to reach out and share their wares more widely; that continues to be the case. I continue to proffer reassurance that New Zealand already has an enormous WTO quota, which it does not use with the UK because it exports a lot of its sheepmeat to Asian markets. Indeed, much of the EU imports that come into the UK are balanced easily by the fantastic British produce that comes from our Northumbrian and Welsh farmers—and, indeed, any other of our farmers, but we have a very strong voice for those two farming communities in particular. I reassure hon. Members that giving our farmers opportunities to reach out and build new relationships and new trading routes is our great passion, and we will continue to do that in the Department.

UK Emissions Trading Scheme: Wales

Debate between Ben Lake and Anne-Marie Trevelyan

Tuesday 13th July 2021 Westminster Hall

[The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)]

I congratulate the hon. Member for Ceredigion (Ben Lake) on securing this really important debate on the operation of the UK ETS in Wales. The four Administrations of the UK have worked together over months and years to establish what will be the world’s first net zero carbon cap and trade market and a crucial step towards achieving the UK’s target for net zero carbon emissions by 2050. We have drawn on our years of experience and global leadership in carbon pricing, going all the way back to the original UK ETS in 2002, to ensure that the new scheme has the flexibility and ambition to deliver for the whole of the UK. We share the combined objectives of driving permanent emission reductions across the UK while protecting the competitiveness of our businesses, be they steelworks in south Wales, ceramics producers in central England or whisky distilleries in Scotland. The UK ETS authority—the UK Government and the three devolved Administrations —continue to make good progress in the operational delivery of the UK ETS in our respective nations.

The UK ETS market opened on 19 May and there have now been four successfully completed auctions, with a fifth taking place tomorrow. Collectively, we published the free allocation table for stationary installations on 11 May, and we have since issued just under 40 million free allowances to qualifying operators. The allocation table for aviation operators was published on 28 June, and we will be issuing allowances to qualifying aircraft operations shortly, but we are committed to building on the process, and officials from the four Administrations are already working together on plans to further increase the climate ambition of the UK’s carbon pricing policy.

The UK ETS authority has already jointly committed to exploring a number of areas where we could go further and faster, and together we plan to set out our aspirations to continue to lead the world on carbon pricing. The overall cap for UK ETS is an obvious place to start, and we will be moving together quickly to consult on a consistent net zero trajectory for the cap, drawing on the advice from our statutory advisers, the Climate Change Committee. We will also be reviewing free allocation, which is a key measure to protect our industries, to prevent the offshoring of emissions—I think we all agree that that slightly defeats the point—and to ensure that the system is fair and equitable across the UK and its constituent nations, while maintaining the level of ambition that we really need to be able to get to net zero.

Together, we will tackle the case for expanding carbon pricing across the economy while encouraging innovation in emerging decarbonisation technologies. The hon. Gentleman’s challenge of connecting forestry with the ETS is one that we will indeed look at. We have committed to explore expanding the UK ETS to other sectors—two thirds of emissions are currently uncovered—including thinking about how the UK ETS can incentivise the deployment of greenhouse gas removal technologies, be they nature-based, as he identified, or indeed engineered not by nature. We shall enhance the effectiveness of the UK ETS, particularly for aviation, while recognising our international obligation in that sector.

A key objective of the UK ETS is to protect the competitiveness of UK industry, so as well as the free allocation of allowances to sectors at risk of carbon leakage, which is the offshoring of production and emissions, we are providing a package of measures to help businesses to decarbonise. On 17 March, the Government published the UK’s first-ever net zero strategy for industry. The document is the first strategy published by a major economy, and it sets out how industry can decarbonise in line with net zero while remaining competitive and without pushing emissions abroad. The strategy sets the expectation that emissions in industry will fall by around two thirds by 2035 and at least 90% by 2050 compared with 2018 levels, in order for us to achieve net zero. We have challenges ahead and we need to find the best, most effective and most impactful solutions.

The UK ETS is a jointly established, jointly operated scheme that has great potential for all Administrations.

[Ben Lake]

I am grateful to the Minister for her response. As the work gets under way to expand the ETS scheme, will she ensure that the wider costs of any scheme, particularly carbon offsetting in local communities —whether those costs be the loss of agricultural land or the impact on the vibrancy of rural communities—can somehow be incorporated into the approach taken? I appreciate that it is a very complex issue and I do not pretend to have the answers, but could she reassure us that that will be considered as part of the future work scheme?

[Anne-Marie Trevelyan]

I take note of that. The hon. Gentleman may want to call for a similar debate with the Department for Environment, Food and Rural Affairs to discuss other aspects of the funding that will go to those smaller communities as we change the systems, now that we are no longer under the EU frameworks.

The UK ETS is focused on supporting industry to make those transitions and has great potential for all Administrations. It recognises both the unique opportunities and, indeed, the challenges in each, which are all different. I endorse and agree with the hon. Gentleman and the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), and share their passion for all those nature-based solutions, which are critical to helping us to sequester carbon from trees to peat. I am a particular advocate for peat restoration across Northumberland, for obvious, biased reasons.

I encourage all Members to work with Government and Natural Resources Wales as we think about extending the ETS scheme, which we are just starting to do. We will seek to review it in some detail and think about how we can expand it. There is a great deal of room to continue the conversation. I look forward to working with Members as we set out the consultation in due course and make progress. I hope we will continue this important discussion and find solutions to ensure that these really important industries of ours can compete effectively on the international stage.

Question put and agreed to.