Brexit: Food, Environment, Energy and Health (European Union Committee Report)

Lord Goldsmith of Richmond Park Excerpts

Monday 15th November 2021 Grand Committee

[The Minister of State, Department for the Environment, Food and Rural Affairs and Foreign, Commonwealth and Development Office (Lord Goldsmith of Richmond Park) (Con)]

My Lords, I am very grateful to the noble Lord, Lord Teverson, for securing the debate and to the environment sub-committee members for this excellent report, Beyond Brexit: Food, Environment, Energy and Health. We have had some excellent contributions today and I am grateful to everyone who has taken part. I start by agreeing with the last sentiment put forward by the noble Baroness, Lady Hayman. It is absolutely in all our interests that we work together, not least for the reasons that the noble Lord, Lord Cormack, cited.

The committee detailed a number of conclusions and recommendations in the report. We considered them in the Government’s published response, and I will try to provide a further update this evening. We were elected, as noble Lords will know, to get Brexit done and we have done that. We are already realising some benefits of our departure from the EU, particularly in relation to the department for which I am speaking today, Defra. We are revolutionising the way that we support farmers—I will come back to that in a second. The goal is to help them to improve the environment and animal health and welfare while reducing carbon dioxide emissions. We have passed the flagship Environment Act—it is wonderful to be able to use that term after nearly 100 hours of debate—which sets the framework for how we will deliver for the environment freed from some of the more burdensome and poorly-targeted EU directives. Freed from the common fisheries policy, we can help our fishing fleet recover and strive to be the most sustainable fleet in the world.

Before I pick up on some of the individual points made in the debate, I will briefly recap on the context of what was achieved with the TCA. It was the first time that the EU had ever agreed a deal with a trading partner based on zero tariffs and zero quotas. It is an agreement based on friendly co-operation between sovereign equals, centred on free trade and inspired by our shared history and values. I am pleased that the committee’s report recognises that many of our sectors benefit from the tariff-free access to the EU market secured by the TCA.

The agreement recognises UK sovereignty over our fishing waters and puts us in a position to rebuild our fishing fleet by regaining control of our waters and delivering increased fishing quotas through annual negotiations with the EU and other coastal states. The agreement means that the UK can now regulate in a way that suits the UK economy and UK businesses, doing things in a more innovative and effective way.

On the environment, it is worth acknowledging that the huge tangle of EU law that exists has not halted the decline in nature. That is not to say that those regulations are without value, many of them do have value, but I think it is a mistake to regard the existing ecosystem of environmental law in the European Union as being effective as a whole. We are now free to really deliver on nature recovery and biodiversity by taking what works and building on the rest, which is what I think the Environment Act seeks to do.

We are ensuring businesses get the support they need to trade effectively with Europe and to seize new opportunities as we strike trade deals with the world’s fastest-growing markets.

The UK and the EU have very similar animal and plant health measures. The Government are committed to maintaining those high standards in biosecurity, food safety and animal welfare. Indeed, it is our intention to go further in many of those areas. We have the freedom now to introduce our own SPS rules based on more up-to-date science, better targeted to manage biosecurity risks and food safety issues specific to the UK and better reflecting UK needs and priorities.

The SPS chapter in the TCA recognises that the UK and EU’s independent SPS controls must be risk based and should not create unnecessary barriers to trade. The Trade Specialised Committee on SPS, which the TCA establishes, is tasked with regularly reviewing the parties’ SPS measures and their application. The chapter allows the UK and the EU to take informed decisions to reduce their respective SPS controls where justified, with that commitment to avoid unnecessary trade barriers while respecting each party’s right to regulate. We believe it is in both parties’ interests to use this framework to reduce the rate of SPS checks required.

In answer to one of the points made by the noble Lord, Lord Teverson, the first meeting of the Trade Specialised Committee on SPS has now taken place. It provided the opportunity to take stock of our new relationship with the EU on SPS matters. Both the UK and the EU agreed on the importance of ongoing collaboration across a wide range of issues, including e-certification, animal welfare and the fight against antimicrobial resistance. At the committee, the UK raised concerns about the justification for the EU’s import conditions covering live bivalve molluscs and seed potatoes, including their impact on businesses. The UK and the EU agreed to further technical exchanges on these and future constructive discussions on import restrictions on chilled meats.

The noble Duke, the Duke of Montrose, asked, I think, when the single trade window stops. The answer is that the capabilities of the single trade window will grow iteratively over the coming years, with functionality being extended to users in stages. Work is under way to develop a delivery road map beyond 2022, and we will be engaging extensively with the broader industry and traders over the coming months to ensure that we deliver a genuinely transformative approach for users.

The noble Earl, Lord Caithness, raised so many issues that I am afraid I cannot possibly answer them all, but I will answer some and write to him afterwards on others. He made the point of the importance of nature and land use in the context of our climate battle and mentioned COP 26. One very clear win at COP 26 was our having put nature and land use at the heart of those discussions. In previous COPs, nature, forests and land use generally have always been at the margins of the margins of the debate. We have a small room with forestry experts on the outside of the conference, and discussions happen and are then completely ignored. That has changed. One of the two main leaders’ days was completely dominated by commitments being made by leaders and businesses on forests. Even some of the more sceptical environmental groups were both taken by surprise and very happy that we had a package on forests which, cumulatively, represents a turning point in our relationship with the natural world. Clearly, we have to make that stuff happen and follow through, and that is what we will do for the remainder of our presidency, which lasts a year.

I disagree with the point the noble Earl has made today and in a number of debates we have had, not least on the then Environment Bill, that the choice is between food production and ecological restoration. I know that is a crude summary of his point, but I think it is its essence. There are so many examples, both here and around the world, of food production being reconciled with the biodiversity crisis we find ourselves in. Fundamentally, no matter how difficult that is, it has to happen. If we are to stop deforestation, it means reconciling commodity production with forests. If we do not do that, all our efforts in relation to emissions reductions are worth nothing. That is the central challenge we face as a species, and it matters here in the UK just as much as in the Amazon.

The committee registered concerns from the fishing industry about the TCA. Although it did not deliver everything that we and the industry hoped for, it has delivered an uplift in fishing quota shares for the UK fleet across a wide range of stocks. The annual consultations that followed were protracted, as we know, and we know that this has also caused uncertainty. The annual consultations for the 2022 fishing year started last week, with both parties keen to make faster progress this year. In answer to the noble Baroness, Lady McIntosh, the specialised committee on fisheries, the SCF, provides a forum for discussion and co-operation with the EU in relation to sustainable fisheries management, and the first and second meetings took place on 20 July and 27 October respectively.

I am not ignoring the noble Baroness, Lady Hayman, I will come back to her point in a second. In fact, I hope the next thing I say is reassuring to her on some of the points she raised. The fish trade sector is now showing some clear signs of recovery. Overall seafood export value in July 2021 was similar to pre-pandemic levels. Exports to the EU remain 9% below pre-Covid average values, while non-EU trade is up 4%, so a semblance of normality is returning to the sector. While we are generally seeing exports recover, we recognise that there is still disruption caused by hospitality sector closures, freight issues, coronavirus and so on, and we continue to work with the sector to try to resolve those challenges. A Defra-led UK-wide seafood industry forum on trade has been established to support the seafood industry with trade and supply chains in all markets, at home and abroad. It has representation from right across the sector—small and big businesses and everything in between.

The TCA provides for limited access to specific areas of the UK 6 to 12 nautical miles zone until the end of the adjustment period, which is on 30 June 2026. Access will be limited to qualifying vessels, namely those that have historically accessed the UK 6 to 12 miles zone with a demonstrable track record of fishing between 2012 and 2016. Access arrangements for the Crown dependencies are different in the TCA. The approach of the UK and Crown dependencies throughout this year has been to implement the new access requirements of the TCA in good faith and in a reasonable and evidence-based way, recognising the sensitivities and importance for both parties.

Before I move on from fishing, the noble Earl, Lord Caithness, and the noble Baroness, Lady Hayman, mentioned bottom trawling, and I very strongly agree with both of their remarks. The ecological devastation it causes is akin to clear-cutting the Amazon rainforest; it causes untold damage. The noble Earl, Lord Caithness, mentioned the CO₂ contribution caused by bottom trawling. Although the science is not clear and there are wildly varying estimates on the contribution that bottom trawling makes in terms of CO₂ emissions, there is no doubt that it does contribute, and it probably contributes very seriously. Consequently, our management of the ocean should be a much more central part of our COP negotiations. But as the noble Earl and others who have taken interest in this will know, that is a very sensitive political issue which has always been shunted to the side in COP negotiations. However, I think we made significant progress at this COP, not least with the help of Secretary Kerry, who has a passion for oceans and was able to help us bring this issue much closer to the heart of the discussions. I do not pretend we are there yet; I can say only that serious and measurable progress has been made.

The TCA recognises our ongoing commitment to high environmental standards while retaining flexibility for us to tailor our approach for the UK and maintaining our strong levels of protection. This protects our sovereignty while reinforcing our role as a global leader in environment and climate policy. These arrangements are typical of the sort you find in other free trade agreements and will ensure that both parties retain full legislative autonomy while also providing reasonable assurances that both sides will not engage in aggressively anticompetitive practices in a way that distorts trade between each other. The report welcomes the inclusion of climate change provisions in the TCA. It notes that the TCA reflects the importance that both parties place on tackling climate change by making that challenge an essential element in the agreement.

I say briefly in response to the noble Baroness, Lady Hayman, who mentioned the challenges inherent in free trade agreements and the risk that poses to our own standards, we have been very clear that we will not pursue free trade agreements in such a way that our own standards are compromised. That is not to say that there are not challenges, but alongside those challenges there are a lot of opportunities, and the goal surely has to be to reach a situation where the kinds of sustainable practices that we know the world needs are favoured in trade arrangements and those things which are less sustainable face bigger obstacles. There are plenty of opportunities where the UK could be more ambitious in our pursuit of free trade agreements. I am having those discussions with the new Secretary of State for International Trade in the coming weeks, and I very much look forward to them.

The UK already has in place some of the highest environmental standards in the world and the Government have no intention of weakening or lowering them, as I said earlier. On the contrary, it is our intention to continue raising them. The UK will use the TCA committee structure to monitor EU implementation and engage with the Commission on any issue of suspected EU non-compliance, including through the dispute resolution mechanism of the TCA if necessary.

Reflecting our commitment to high environmental standards, on 9 November 2021 the UK Parliament passed into law the Environment Act 2021 to protect and enhance our environment for future generations. The relevant sections of the Act will be commenced imminently to bring about the legal establishment of the office for environmental protection. In fact, I have a bit of an update on that. The noble Duke, the Duke of Montrose, asked when the OEP will be fully functioning. I can confirm that we will commence all the relevant parts of the Environment Act to enable all the OEP’s statutory functions and duties within three months of Royal Assent, which is in roughly two and a half months from now.

The report also covers energy and carbon pricing, urging for delivery of new arrangements and concerns that consumer electricity prices could increase. The global gas price spike provides yet another good reason why we must move away from a dependency on fossil fuels and towards clean sources of energy at home. As we decarbonise our electricity system, wholesale prices will be less affected by the fluctuations caused by fossil fuel prices, and all else being equal we would expect wholesale prices under a renewables-based electricity system to be lower than our current one based on fossil fuels. This will protect consumers by reducing our exposure to these volatile prices while lowering prices as electricity becomes cheaper to produce. We already have a strong, home-grown renewable energy sector, but we need to go further to reduce our reliance and protect British consumers.

The Government are committed to developing and implementing new efficient electricity trading arrangements as agreed to in the TCA to support the further integration of renewable energy sources, along with our ambition on net zero, and our need to protect consumers from high prices. As part of that, we have recently consulted on the current arrangements for trading electricity on power exchanges in the GB wholesale electricity market and our proposal to support efficient cross-border trading. That consultation closed on 3 November. We are currently considering responses to those proposals and will publish our response soon. On carbon pricing, as noble Lords know, the UK and EU agreed to co-operate and give consideration to linking our respective carbon pricing systems under the terms of the TCA. We will be taking forward our commitments in due course.

As the report states, securing a trade agreement with the EU was a key priority for the UK chemicals sector, a point made by the noble Baroness, Lady Hayman. The agreement removes the vast majority of the £1 billion per annum tariff costs that the sector would have faced in a non-negotiated or no-deal outcome, and has been welcomed by industry. Again in answer to the noble Baroness, Lady Hayman, of course we want to support a sustainable, innovative UK chemicals sector which thrives in the longer term. This must be done without undermining the capacity of the regulator to adequately ensure that chemicals are traded on the GB market safely. Striking this balance clearly comes with challenges, and I do not underestimate the strength of feeling around the move to UK REACH and the challenges and costs of that. We have debated that many times in the House, and I recognise that the House takes a very strong view, one that has been very much noted by Defra.

We are grateful to those in industry who have worked closely with us through the complex issues around the transition, generating ideas for Ministers to consider and working with us on the practicalities of the set-up. Since UK REACH launched on 1 January, companies have successfully submitted information to HSE ahead of the key milestones for grandfathering and downstream user import notifications, via the IT service “Comply with UK REACH”. Ministers are still considering proposals put forward by industry for making changes to the UK REACH registration requirements. These are very difficult issues, which Ministers are grappling with, but they are taking the proposals seriously, so I would ask for noble Lords’ patience while they do so.

As acknowledged by the committee report, the agreement that the Government have reached with the EU means that reciprocal healthcare arrangements continue. UK residents are covered if they need urgent healthcare when in an EU member state, and the arrangements ensure that all those with long-term conditions will continue to be able to benefit from necessary healthcare in the EU. In response to the noble Baroness, Lady McIntosh, since the start of the year, over 1.5 million global health insurance cards and 240,000 UK European health insurance cards have been issued.

In relation to a question put to me on Northern Ireland, which I think was also put to me by the noble Baroness, Lady McIntosh—apologies if that is wrong—a lot of concerns have been raised by Peers about Northern Ireland generally. I confirm that there remains a substantial gap between the positions of the UK and the EU. We think and hope that that gap can be bridged, but it will clearly require very intensive discussions.

We will seize the opportunities enabled by our exit to realise ambitions to make the UK a life sciences superpower. We will use the provisions of the Medicines and Medical Devices Act 2021 to overhaul our clinical trial frameworks, based on outdated EU legislation, giving a major boost to the UK’s world-class research and development sector and getting patients access to new life-saving medicines more quickly.

The noble Baroness, Lady Hayman, kindly acknowledged that this was not an area that I normally cover, but I shall address her point on the NHS workforce. The Government are, of course, hugely grateful for the tremendous contribution that front-line workers within the health and care sectors are playing at the current time, and recognise their commitment and the dedication they have to keeping vital services running. We are committed to growing and supporting the workforce to ensure that it continues to provide world-class health and care. There are record numbers of doctors and nurses working in the NHS today.

In response to the noble Baroness, Lady Hayman, the NHS people plan recognises that international staff are critical, as she says, to a sustainable workforce in the short to medium term while domestic supply is increased. There is a gap there that needs to be filled. Recognising this, in 2020 we introduced the health and care visa and waived the immigration health surcharge for key health and care occupations to make it quicker and cheaper for international health and care professionals to come and work in the UK. The recently updated code of practice for the international recruitment of health and social care personnel will ensure that the UK remains a world leader in ethical international recruitment.

I apologise for speaking for longer than the allocated 20 minutes. I again thank the noble Lord, Lord Teverson, and his committee for this report and for his remarks earlier. I know I have not answered all the questions that were put to me. I will go through Hansard and ensure I do so in writing. In the meantime, I hand back to the noble Lord, Lord Teverson, to wrap up. I thank the Committee for its patience today.