Trade (Australia and New Zealand) Bill

Lord Spellar Excerpts

Report stage
Monday 12th December 2022 Commons Chamber

[Gareth Thomas]

I hope my hon. Friend accepts that the case I am making for providing serious and detailed impact assessments for future trade deals will help to ensure that his point gets proper consideration in future.

I hope that new clauses 13 and 14 remind Ministers of the significance of trade for working people and of the need for trade to play its part in helping to tackle climate change and accelerate progress towards net zero. When the Australia deal was negotiated, two Conservative Governments, both with distinctly underwhelming records on climate and workers’ rights, were in the negotiating room. In this country, the Conservative party has consistently sought to exclude representatives of working people in the trade unions from all significant consultation on trade deals. The trade deals that we as a country sign should raise standards, support better employment and help to tackle climate change instead of, as the Conservative party seems to want, heralding a race to the bottom.

We have tabled amendment 1 to stimulate serious and sustained detailed consultation with all the nations and regions of the United Kingdom on the details of the chapters of the trade deals. It is a reminder to Ministers of the need to step up and improve further their discussions with the devolved Administrations and with the regions of England about the impact of deals on specific communities and economic sectors. My hon. Friend the Member for Llanelli (Dame Nia Griffith) gave the example in Committee of farmers in Wales, where 85% of the beef and 60% to 65% of the sheepmeat produced are consumed in the UK. There is genuine concern about the impact of a huge hike in tariff-free quotas of meat from Australia and New Zealand on our farmers’ ability to sell into our markets, with all the obvious implications for rural communities, family farms and economic, social and cultural life.

There are similar concerns across the regions of England, in Scotland and in Northern Ireland. The Select Committee on International Trade heard evidence that the Department cannot yet model fully the impact of trade deals on the nations and regions of the UK. That is all the more reason for better consultation before new trade regulations come into force.

[John Spellar (Warley) (Lab)]

On livestock and meat, is not it the case that a sizeable amount of our imports comes not from Australia or New Zealand—and they would not under the agreement—but from the EU and South America?

[Gareth Thomas]

Absolutely, but we have conceded that the deals are important and that they must be supported, and we want more trade with Australia and New Zealand. I gently say to my right hon. Friend that it is right to ensure that the deals work much better than they appear set to do at the moment. I hope that our amendments will help to achieve that.

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[Richard Foord (Tiverton and Honiton) (LD)]

Will the hon. Member give way?

[John Spellar]

Will the hon. Gentleman give way?

[Richard Thomson]

I am spoilt for choice. I think I heard the hon. Member for Tiverton and Honiton (Richard Foord) first. I will then come to the right hon. Member for Warley (John Spellar).

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[John Spellar]

Surely it is not as simple as the hon. Gentleman is making out. Did we not have a substantial trade deficit in agricultural products with the countries of the EU as well?

[Richard Thomson]

There may have been a deficit in totality, but I hope the right hon. Gentleman is not trying to contend that the situation has been made any easier by the trade environment we now find ourselves untimely ripped into.

We have to ask, “To what end?” Even the UK Government’s own analysis shows that the trade deal with New Zealand will deliver a mere 0.03% benefit in GDP to the UK over 15 years and the Australian deal 0.08%, all the while the UK-EU trade and co-operation agreement will lead to a contraction of UK GDP by 4.9% over 15 years.

A number of safeguards could have been put in place in the agricultural chapters to protect farmers: no full liberalisation irrespective of time period; lower quota terms; percentage controls on the ratio of frozen to fresh carcases to protect the high quality Scottish fresh meat trade; clauses that work out beef and lamb tonnage quotas in a carcase-specific way, so premium cuts are protected; seasonality clauses; clauses to ensure the exports and imports of high value meat are properly valued; and trigger safeguards that could have been applied to protect the domestic market against any surge in imports in a particular year.

On new clause 5, it is important that an assessment is carried out on the impact of implementation of the procurement chapters on hill farmers and crofters in Scotland. Many in the hill farming and crofting communities are highly economically marginal. They have a huge economic importance in terms of supporting their areas, but the economics can be precarious at the best of times and they will certainly not be made any easier by the terms of this trade deal. The risk of undercutting standards through the deal means that meat is likely to end up costing less in the UK if it is shipped in from Australia or New Zealand, rather than if it is produced at home.

Analysis by Quality Meat Scotland has concluded that New Zealand beef farmgate prices are anywhere between 25% and 30% lower than Scottish farmgate prices, and 10% lower than their Scottish counterparts for lamb, undercutting on price. Matters relating to food standards fall within the competency of the devolved Administrations, but they have absolutely no power to exclude imported products on the basis of how they have been produced or on the undercutting of standards that feed into the undercutting of prices.

Donald MacKinnon, the chair of the Scottish Crofting Federation, speaking of the 15-year-long transition period, said:

“This is about changes that can happen over a much longer period of time. Agriculture does not operate on year-to-year, short lifecycles. We operate in generational terms in our businesses, and 15 years is a relatively short period of time in that sense. So it is not that we are concerned that the negative impacts are going to happen straightaway. This is about the long-term future of our industry. That is what my members are concerned about.”

Jonnie Hall, director of policy, National Farmers Union of Scotland, said:

“Ultimately, an awful lot of procurement contracts will be negotiated on price, given that there will be a written understanding, at least, that the standards in them will be of an equitable value, if that is the right expression. It is the competing on price piece that will probably be of more concern to Scottish producers than anything else, because we operate under different agricultural production systems and our cost structures are therefore different…it may be that New Zealand and Australian produce is more attractive simply in terms of value for money—I will call it that, but the word ‘value’ is not right.”

It is notable that the EU managed to secure the same market access into New Zealand for its exporters as the UK, but at a much lower cost to its domestic producers.

The Secretary of State has said that she is a huge believer in British farming and the role it plays in our national life, and has written about her fears of the impact that opening up our markets will have on domestic producers. We firmly believe that she should allay those fears by renegotiating the agricultural chapters of these deals with the new Australian Administration and the New Zealand Government. We should ensure that we monitor very closely the impact it has on our agricultural communities. While renegotiating, she might also want to consider the fact that Australia is one of the few countries in the world that maintains an effective absolute ban on the importation of UK beef. The Secretary of State has said that she does not believe the Department for Environment, Food and Rural Affairs raised concerns with the World Trade Organisation via the Department for International Trade on this issue. That should certainly happen, and it should certainly have been addressed in the trade deal to make sure that this barrier was lifted.

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[John Spellar]

Does my hon. Friend agree with me about the irony that the Liberal party, which was founded on free trade and campaigning against the corn laws, is now becoming an agriculturally protectionist party?

[Sir Mark Hendrick]

I will not comment too much on that. There are rules to free trade—it is not a free-for-all—but at the same time, I do not think that the Liberal Democrats believe in totally free markets any more than we do.

Records show that the former Prime Minister, then the Trade Secretary, the right hon. Member for South West Norfolk, pressed ahead with the deal despite receiving detailed warnings from her own officials in 2020 that she was acting against the UK’s best interests. The British agricultural industry and farmers already facing pressures from inflation and labour shortages stand to lose the most from this Bill, as the NFU has long maintained. These deals are not in our economic interest and are a threat to domestic business and food security. They could also force many farmers out of business, according to the NFU president, Minette Batters. Ultimately, the Government may see implementation of these deals as a stepping stone to accession to the comprehensive and progressive agreement for trans-Pacific partnership, but I am dismayed that that is at the expense of our own farmers and our wider economy.

May I ask the Government to review the negotiations on the chapters of this agreement, and the lessons learned from those negotiations, and to make an assessment of how this experience might inform the negotiation of future trade agreements? If other countries, in CPTPP or elsewhere around the world—whether in South America or wherever—can see that this country can be rolled over so easily in its negotiating power, it sets a bad precedent for future trade deals.