Trade (Australia and New Zealand) Bill

Anthony Mangnall Excerpts

2nd reading
Tuesday 6th September 2022 Commons Chamber

[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.

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[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.

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[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.

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[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.

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[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.

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[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.

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[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.

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[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.

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[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.

--- Later in debate ---

[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.

Trade (Australia and New Zealand) Bill

Anthony Mangnall Excerpts

Report stage
Monday 12th December 2022 Commons Chamber

[Richard Thomson (Gordon) (SNP)]

I rise to speak in support of new clauses 4, 5 and 6 and amendments 2, 3, 4, 5 and 17 in the name of my colleague, my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry).

The top line for us at this stage of proceedings is that we cannot support this Bill with the agricultural terms of the trade agreements left unamended, particularly as the Scottish Government have responsibility for agriculture in Scotland but have had no direct role in negotiations and remain deeply concerned by the impact that both of these agreements could have on the Scottish farming sector as well as food and drink.

These deals are being rushed through at an horrendous time for UK farmers. Farmers are already battling with skyrocketing fertiliser prices, animal feed prices jumping by on average 30%, the avian flu outbreak, the Brexit labour shortages, and the rising diesel costs, to name but a few of the issues at present. Therefore, we would think that at this point, rather than rushing on at breakneck speed, there would be opportunity to take the time to get this right—to make sure it is carefully calibrated and is in the interests of farmers and the food and drink industry, and indeed all industries across the totality of the UK economy.

[Anthony Mangnall (Totnes) (Con)]

rose—

[Richard Thomson]

If the hon. Member can explain why there is such indecent haste I will be delighted to yield.

[Anthony Mangnall]

I apologise for interrupting the hon. Gentleman, but perhaps he might tell us what the perfect amount of time is for a trade deal to be signed?

[Richard Thomson]

I am not sure there is a perfect amount of time, but we can certainly spot a duff deal when it is being rushed through.

[Anthony Mangnall]

rose—

[Richard Thomson]

If the hon. Gentleman will be patient and remain seated I can perhaps go through some of the shortcomings that have arisen, because we were helped enormously in coming to an assessment—

--- Later in debate ---

[Anthony Mangnall]

Since the hon. Gentleman has challenged me, I see no problem in setting timelines if we can achieve them, and in fact what the Government have managed to do is start negotiations with the comprehensive and progressive agreement for trans-pacific partnership, do a trade deal with Japan on digital partnerships, do a digital partnership with Singapore, undertake the Australia and New Zealand deals, look at where we can do a trade deal with India, and start negotiating with Canada. If we set ourselves some objectives, that sets a standard for what we can achieve.

[Richard Thomson]

If only that were actually the case—[Interruption.] When it comes to achieving good outcomes, the problem here is that this was not done from a position of strength; it was done from a position of considerable weakness, as we will go on to hear. Perhaps the hon. Gentleman was not in the House to hear what the right hon. Member for Camborne and Redruth said, but allow me to elucidate and then he might elect to put the shovel down for a moment. He said that

“at one point the then Trade Secretary asked her Australian opposite number what he would need in order…to conclude an agreement by…G7. Of course, the Australian negotiator…set out the Australian terms, which eventually shaped the deal. We must never repeat that mistake.”—[Official Report, 14 November 2022; Vol. 722, c. 425.]

I accept that there has been a duality in much of what the right hon. Member has said at different times. I wonder whether the hon. Member for Totnes is also to reveal such a duality.

[Anthony Mangnall]

indicated dissent.

[Richard Thomson]

No, he is not. Somehow, I did not think that he would.

Clearly, there is nothing quite so liberating as a loss of ministerial responsibility. The right hon. Member went on to tell the House that

“the Australia trade deal is not actually a very good deal for the UK”,

that

“the UK gave away far too much for…too little in return”

and that, further, in his view,

“the best clause in our treaty with Australia is that final clause, because it gives any UK Government present or future an unbridled right to terminate and renegotiate the FTA at any time with just six months’ notice.”—[Official Report, 14 November 2022; Vol. 722, c. 424-5.]

The SNP happens to agree that that is probably the best clause in the Bill as it stands—

Trade (Australia and New Zealand) Bill

Anthony Mangnall Excerpts

Consideration of Lords amendments
Wednesday 22nd March 2023 Commons Chamber

[Gareth Thomas]

My right hon. Friend, as ever, makes a hugely important point. Australia and New Zealand, as I said earlier, are important allies of this country with whom we have crucial security interests as well as trade interests. I accept that anything that helps to maintain and strengthen those relationships is very positive, but I am sure he would agree that we need to learn the lessons from how Ministers carried on those negotiations, particularly with the Australians.

Given the specific context of the Bill and the focus on implementing the procurement chapters of the two trade deals, it is a struggle to see how this amendment will help to improve the implementation of the supposed better access to our partners’ procurement markets.

The leading procurement expert Professor Sánchez Graells set out clearly in his evidence to the other place, and indeed to this House, his concerns that the Australia deal worsens the protections for British businesses competing in the Australian procurement market. We are entitled to ask ourselves whether this amendment helps to address that concern in any way. Sadly, I do not think it does.

Professor Sánchez Graells also made clear his view that the benefits of the trade deal in terms of access to Australia’s procurement market have been significantly exaggerated. The noble Lord Purvis and Labour Lords also picked up on that point in the debates in the other House, but the one Lords amendment that the Government backed does not address this concern. What the amendment does, if anything, is ever so slightly increase Ministers’ powers to implement regulations, wherever and however they want.

Given how Ministers excluded some groups from the negotiations—including trade unions—given the disregard for the legitimate interests of our devolved nations, and given the failure to negotiate commitments on climate change or proper protections for specialist British brands such as Stilton cheese or Scotch whisky, Ministers’ apparent determination to try to claim a little more freedom to implement the procurement chapters does not encourage any sense that they have learned lessons from what has happened.

I have one specific question for the Minister on the implementation of these trade deals. It would be very helpful for small businesses across the UK if he set out the Department’s plan to support small businesses that want to access the Australian and New Zealand markets and take advantage of the trade preferences in these two deals.

We will not seek to divide the House, but this amendment is a reminder of the Government’s woeful performance on trade and exports, and of the desperate need for a new Government determined to lift up the living standards of everyone in this country, not just the already very wealthy, by delivering more exports and sustained economic growth.

[Anthony Mangnall (Totnes) (Con)]

I congratulate the hon. Member for Harrow West (Gareth Thomas) on taking such a great deal of time to find some contention in a single amendment that adds only the word “difficult.” I am afraid my remarks will be somewhat shorter.

The whole basis and value of this Bill, and of what the Lords have sent back to us, is in taking the opportunities presented to us by our trade agreements. It is undoubtable that, through the Australia and New Zealand trade deals, new trade opportunities have been delivered. We have to be clear about how those values have offered themselves, whether through defence agreements, through creating new digital partnerships, through joining new blocs such as CPTPP, through exploring the idea of the Gulf Co-operation Council, through signing memorandums of understanding with American states and trade agreements with Israel or through finding ways to join up with India to unlock services and industry opportunities for our country and our businesses.

The hon. Gentleman spoke about how we might be able to help small and medium-sized enterprises. Well, only this morning the Department for Business and Trade held an event in the Attlee Suite of Portcullis House on how we can help SMEs achieve their true value and potential beyond our borders. I hope we see more of those events, because it is essential that we find ways to help our small businesses reach new markets.

I will come on to procurement and the amendment in a second, before I stray too far, but it is relevant to talk about the value of these trade deals. All too often, we are told that they are not of enough value to the UK economy, which is to presume that our trade deals are static and that no one takes advantage of them when they are brought into force. After they are brought into force, we always see them grow.

On the International Trade Committee, I always cite the example of the North American free trade agreement. The expectation when NAFTA came into force was that it would be of very little benefit to the signatories’ economies. In fact, the opposite was the case. It grew steadily over time and has evolved into what it is today under a different name. We should look not at the current forecast value of these trade deals but at how we can encourage businesses in each and every one of our constituencies, from Totnes in south Devon to Harrow West and Northern Ireland, to take full advantage.

We talk about procurement a lot and we are trying to shape it in a meaningful way in this House. So far, we are doing very well, with the Procurement Bill. However, as the Minister has rightly said, this is the chance to take the benefit of procurement opportunities that vary. Where there are differences—it will not just be in defence, as it might be in utilities, services, industry and so on—this will allow us to take the opportunity that comes with that range.

I do not think there is going to be much disagreement on this Lords amendment. At last, it shapes a Bill that—

[John Spellar]

Do we not have to be careful on public procurement and recognise the world as it is, notwithstanding agreements? Even when we were a member of the EU, we found that other countries gave considerable preference to their own producers within procurement. Our civil service and Treasury resolutely, adamantly and stubbornly refuse to support British industry, including small and medium-sized enterprises, and so when they go into the world market, they hear, “If you are not good enough for the British Government, why are you good enough for us?” They are being constantly undermined, even now, on small modular reactors.

[Anthony Mangnall]

I am grateful to the right hon. Gentleman for that. We have accepted in many instances the terms of the World Trade Organisation and the carve-out measures within them, so we are very compliant in many areas where we can be, for example, in this instance, a little more protectionist in respect of some of the key technologies we are developing in this country. There is a bit of give and take on that point. We do recognise it in some areas, although perhaps not to the extent that he would want to see.

As I was saying, I do not disagree with this Lords amendment, which is a perfectly simple one. There is always a lot in a word, but this will give us the opportunity to take full advantage in our trade deals and through procurement.

[Richard Thomson (Gordon) (SNP)]

Out of all the potential amendments that could have come back along the corridor from the other place, this is not one that would have been top of my list. Let me surprise the Minister by saying that this is a very good trade deal—for those viewing it from Australia or New Zealand. It is not such a good trade deal—it is a pretty lousy one—for those viewing it from Scotland. We are dealing with a single-word amendment, and I can think of many farmers in my constituency who could probably sum up their views of this deal in a single word—none of their words would be parliamentary, I hasten to add.

I hear what the hon. Member for Totnes (Anthony Mangnall) has to say about this not being a static arrangement, but even then it still requires a great deal of catching up in order to make up the ground here. The UK Government’s own analysis shows that the trade deal with New Zealand will bring in an increase of 0.03% of GDP over 15 years, with a figure of 0.08% of GDP from the Australia deal, all while the UK trade and co-operation agreement with the EU leads to a 4.9% fall for the UK over the same period.

The Scottish National party has a simple yardstick on trade deals: we will support those that are good and oppose those that are poor. Nothing that has come back alters our view of this particular deal.