Future Free Trade Agreements
Debate between Barry Gardiner and Angus Brendan MacNeil(5 years, 9 months ago)
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Barry Gardiner (Brent North) (Lab)
There is a saying that the longest journey begins with the first step. I have always thought that very foolish. Surely the longest journey begins with deciding upon one’s destination. Without a destination, one is simply wandering about aimlessly. Of course, the other part of key journey planning is knowing what we want to do when we get there. Well, it seems to me that today’s debate shows that, when it comes to trade, the Secretary of State has identified the countries that he wants to visit—New Zealand, Australia and the United States—but that he is not really sure what he wants to do when he gets there.
The Secretary of State must persuade the House today that he has a clear itinerary and agenda. What are his objectives in securing these new trade agreements? What are the attack sectors in the markets that he has particularly identified as ones where we need to secure liberalisation and access for our suppliers and exporters? Which are the defensive sectors in our own markets that these other countries may seek to attack in response? What are the measures that he is proposing to use to defend those sectors in the UK?
My right hon. Friend the Member for Warley (John Spellar) intervened on the Secretary of State to elicit a clear statement of his firm intention to safeguard our NHS. Perhaps the Secretary of State would confirm that he was not actually quoting from the CETA, but from its non-legally binding interpretive side document. What sacrifices is he prepared to make in the negotiations to secure his objectives? How do his objectives sit alongside the objectives of his colleagues in the Department for Environment, Food and Rural Affairs? Do they compromise our food standards or producer capacity? In the Department for Business, Energy and Industrial Strategy, do they fit alongside the plans for a low-carbon transition of our economy to net zero? A successful strategy is one that has thought through all these questions beforehand.
My hon. Friend the Member for Bishop Auckland (Helen Goodman) exposed how only this week we have seen an announcement by Honda, whose future in the UK has been sacrificed as a result of Japan now being able to export Japanese-made cars tariff-free to Europe. The Secretary of State said, “Well, of course, they’re still going to be able to do that after we’ve left the EU, and we’d have no way of changing it inside.” We have no way of changing it outside, because Honda will still be able to export those cars to Europe tariff-free; the Secretary of State knows that. The point that my hon. Friend was making so powerfully was that the relevant impact assessment was not done and that this Government had therefore not insisted that the relevant protection was made for our industry in the EU-Japan agreement.
Angus Brendan MacNeil
I have a philosophical question. There are two schools of thought regarding what is to blame for the Honda situation. It is either Brexit and the anticipation of trouble at the borders either now or in 21 months’ time as the Prime Minister kicks the can down the road and we leave the customs union and the single market; or, as the hon. Gentleman has just postulated, it is the EU-Japan free trade agreement. If it is the latter, is it not negligent for a country within the EU not to raise this issue as a defensive interest and ensure that this situation does not happen? It would seem to be extreme UK negligence for a country within the EU to have burned its car industry on the basis of getting a free trade agreement.
Barry Gardiner
The hon. Gentleman makes two distinct points. Of course, he is right to talk about the impact of Brexit on the automotive sector in the UK. All Members in this House should be concerned about that. The point that my hon. Friend the Member for Bishop Auckland quite rightly made was that Honda said, as the Secretary of State mentioned, that there was no imputation that this decision was made as a result of Brexit, but there was a clear indication that it was as a result of Japan now being able to import tariff-free to Europe—including the UK, but the whole 28 member states. At the point when this Government should have been making representations during the negotiations on that agreement, they were not doing so.
Barry Gardiner
There is no need for me to comment. The empty Benches are screaming my hon. Friend’s point louder than I could amplify it.
Barry Gardiner
I will make a little progress.
The Government’s primary focus must be securing a deal with the EU, which accounts for 44% of all our exports. The Department for International Trade’s primary focus must be to secure the so-called roll-over agreements—a promise repeatedly made by the Secretary of State, which he has now only 35 more days to deliver. Thousands of businesses depend on the ability to continue to operate their just-in-time supply chains, and thousands of jobs in this country depend upon the same.
Questions have repeatedly been asked of the Government’s capacity to handle even the volume of work required to get these deals over the line—more so given the UK’s relative lack of trade negotiation experience after some 40 years of not being able so to do under the EU’s common commercial policy—yet today’s debate is to consider a number of potential new free trade agreements with Australia, New Zealand and the United States, and the potential accession of the UK to the comprehensive and progressive agreement for trans-Pacific partnership.
The Opposition want to see progressive, positive trade agreements that benefit the UK, help to grow our export potential and further enhance the UK’s attractiveness as a destination for investment, but we have been clear from the outset that the priority must be securing a deal with the EU and ensuring continuity of trade for British business, including with respect to trade agreements that the EU has with third countries. There is a good reason for that, which is that any major trading partner will want to know what trading arrangements we have with the EU before concluding a trade agreement with us in future. That seems self-evident. If we are not able to conclude the free trade agreement with the EU, perhaps right into the transition period, that will substantially impair our ability to secure a new trade agreement with any of the three countries that we are considering today.
The Secretary of State is like a general who fails to secure his rear before charging off in search of a new enemy to fight, but that is not his only embarrassment. The letter written to the Prime Minister this week by the chief executive of the British Ceramic Confederation is excoriating about the total lack of understanding displayed by the Secretary of State of the impact of the proposals he favours for a move to zero tariffs in as many areas as possible. The chief executive sets it out in surgical detail:
“Removing import tariffs gives a leg up to foreign competitors, thus threatening British manufacturing jobs.”
She continues:
“Our manufacturers would still be paying other countries’ import tariffs including, in the event of no deal, EU MFNs and other countries’ MFNs where we will have just lost our preferential access. The net effect across all sectors could be to increase imports at the same time as exports are being put under pressure with a resulting adverse effect on balance of payments.
No tariffs makes the UK’s emerging trade remedies system ineffective from the outset by lowering the cumulative duty paid on the distorted imports, for example, by 12% in the case of dumped Chinese tableware.
It would weaken the UK’s hand in making free trade deals with other countries. If we give away access to Britain for free, why would anyone need to do a trade deal with us?”
Barry Gardiner
I was seeking an intervention, Madam Deputy Speaker.
According to the Office for National Statistics, Australia was our 16th biggest export market over the past 20 years, with machinery, Scotch whisky and particularly motor vehicles being among our primary exports. House of Commons Library data suggests that we exported £10.8 billion of our goods and services to Australia in 2017, representing 1.8% of our total exports. In turn, we are Australia’s primary EU market, with primary imports consisting of metals, including precious metals, as well as gems, wine and agricultural products.
The UK Government have recently announced that a UK-Australia mutual recognition agreement has been agreed alongside an agreement on trade in wine. [Interruption.] This is not a glass of Australian wine that I am drinking. That agreement is intended to replicate the terms of existing agreements between Australia and the EU. Australia maintains a number of trade co-operation agreements with the EU, and the current state of play on the UK Government’s progress in rolling over these agreements remains unclear. Although Australia does not currently have a free trade agreement in place with the EU, discussions towards an agreement began last June. Australia has repeatedly made it clear that the EU agreement remains its priority agreement, and that any trade agreement with the UK will not be possible until Brexit is settled.
The European Parliament approved the negotiating mandate for the trade agreement, but noted that there must be
“special treatment for some sensitive agricultural products, for example, through tariff-rate quotas or transition periods, and a request that consideration should be given to the exclusion of the most sensitive sectors; and the preservation of governments’ right to regulate with a view to achieving legitimate policy objectives.”
Furthermore, the European Parliament called on the Commission
“to conduct negotiations as transparently as possible”,
and said that
“the role of the Parliament should be strengthened at every stage of the FTA negotiations.”
I ask the Secretary of State whether the UK Government will be adopting the same mandate in the negotiations. Where they are not adopting the same mandate as the EU-Australia agreement, will he will set out precisely where it will differ?
In the same year, our exports to New Zealand totalled £1.5 billion, representing 0.2% of our total exports. The ONS statistics for the period show that New Zealand was our 54th biggest export market over the past 20 years. Again, our biggest goods exports to New Zealand were primarily motor vehicles and machinery, with agricultural products and wine constituting some of our major imports. The US was our primary export destination in that period, and of course it continues to be our biggest trading partner, discounting the EU. We record a trade surplus with each of these countries, so it would be fair to imagine that it is in their interests to ensure that any future trade agreement grows their own export base.
The EU and New Zealand also commenced negotiations towards a free trade agreement last year, with the mandate again being presented for a vote in the plenary of the European Parliament. Concerns were raised about the impact of agri-food imports on farmers, and the European Parliament requested
“that due consideration should be given, for instance, either to the inclusion in the FTAs of transitional periods or appropriate quotas, or to the exclusion of commitments in the most sensitive sectors.”
It said that the negotiations should seek to ensure
“the inclusion of a specific chapter devoted to generating business opportunities for micro-enterprises and SMEs; special treatment for some sensitive agricultural products, for example, through tariff-rate quotas or transition periods, and a request that consideration should be given to the exclusion of the most sensitive sectors; and the preservation of governments’ right to regulate with a view to achieving legitimate policy objectives.”
The European Parliament called on the Commission
“to conduct negotiations as transparently as possible,”
and MEPs stressed that
“the role of the Parliament should be strengthened at every stage of the FTA negotiations.”
Again, I ask the Secretary of State whether, in pursuing the trade agreement with New Zealand, he will be adopting a mandate that is similar to the one already adopted by the EU. If not, will he now set out precisely where it will differ?
With that in mind, we must be clear about what the opportunities and threats are in respect of further liberalisation of trade with these countries by way of a free trade agreement. It would therefore have been helpful had the Government set out their priorities for each of the trade agreements we are talking about. I had hoped that this would be an opportunity for the Secretary of State to come to the House and do precisely that—to set out the sectors of attack, the sectors of defence and exactly what trade-offs he might foresee.
The hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) and his colleague who speaks on trade for the SNP, the hon. Member for Dundee East (Stewart Hosie), both challenged the Secretary of State by saying that neither the contribution to GDP nor the volume of trade secured in these future trade agreements would compensate for the loss of trade with the EU. When they intervened on him earlier to do so, they gave figures and statistics, but the Secretary of State did not do so.
What impact assessments have the Government done on the specific rises in GDP and volume of trade that the UK seeks to secure from the agreements his working groups have been working towards? With those assessments we might be able to hold him to account in the future. For example, given that motor vehicle exports make up our largest goods exports to Australia and New Zealand, it would be helpful to know what assessment the Government have made of recent market developments, or of our ongoing capacity to export motor vehicles to those countries.
Angus Brendan MacNeil
I hesitate to intervene to make a discordant point, because the hon. Gentleman was being generous. However, on balance I think I should say that if we have a customs union only and are not in the single market, which is the Labour party’s policy, that itself will probably mean a hit to GDP of about 4%. If we need about 30 agreements at 6%, then we would need about 20 similar agreements—20-ish such American agreements—to make up for the damage his policy would bring in loss of trade to the European Union.
Barry Gardiner
Yes, indeed. That is why I have consistently said that I believe that Brexit will do economic damage to this country. Unlike the hon. Gentleman, however, I believe in democracy. I believe that, after the referendum took place, this Parliament had an obligation to do what the British people said we should do.
There is also the question of geography to overcome, with the traditional trend towards trade being with one’s nearest geographical neighbours. That is called trade gravity. While we may share a common history, have cultural relationships and even share a legal system—in trade terms, that is critical and very helpful—there can be no avoiding the significant logistical challenges of shipping goods right around the world to the Pacific. It is worth our considering that these countries are all major agri-food producers and exporter nations, with Australia and New Zealand being members of the Cairns Group bloc at the WTO.
The Cairns Group is an interest group committed to the abolition of agricultural subsidies and the elimination of tariff and non-tariff barriers to trade for their agricultural exports. Other members include Canada, Chile, Malaysia, Peru and Vietnam, which, alongside Australia and New Zealand, make up of seven of the 11 CPTPP countries and seven of the 19 Cairns Group members. There may well be potential to grow our exports to those markets, and the ask on their side is clear. It goes precisely to part of the question posed earlier by my hon. Friend the Member for Bishop Auckland.
The ask on their side is clear: “Open up your markets to our food products.” The impact on our domestic agricultural sector could be substantial as our farmers find themselves struggling to compete with an influx of cheaper food products.
The Secretary of State has repeatedly welcomed the perceived benefit to UK consumers of cheaper New Zealand lamb, and today he again dismissed—I was glad to hear him be so robust—safety concerns over things such as GMO foods or chlorine-washed chicken from the United States. In response to one of his colleagues, he said that there will be no lowering of either sanitary or phytosanitary standards or of animal health and welfare regulations in this country. I welcome that, and we will hold him to it.
If a trade agreement between our countries requires the removal of all tariffs on such goods and the abolition of tariff rate quotas, that could well mean the end of our livestock and poultry sectors. We already know that there has been a big push by the agricultural lobby in those respective countries to seek greater market liberalisation, and some of those countries, including New Zealand and the United States, have slowed the progress of our accession to the Government procurement agreement. It is likely that some countries have also voiced objections to the lodging of our WTO schedules and that the Government have had to agree to a number of future concessions to smooth the road. Again, I would happily give way to the Secretary of State if he wanted to come to the Dispatch Box and deny that is the case, or to set out any concessions or commitments he may have given, but he appears unwilling to do so.
The farming sector in this country is extremely nervous about the impact on its ongoing viability should the UK open up market access for imported agri-food, particularly from the United States. Concerns over production standards, animal welfare, sanitary and phytosanitary standards have not been put to rest by the Environment Secretary’s repeated assurances that our domestic standards will not be lowered. At no point have the Government ruled out allowing access to our markets for goods produced to lower standards than our own. Indeed, the latest rumour is that the Government will seek to counter the impact of the importation of such goods with tariffs. The Secretary of State did not rule that out in his earlier remarks—again, I would give way to him if he sought to intervene, but he does not.
Where a trade agreement is in place, such tariffs are likely to be removed and therefore will do nothing to defend our farmers from cheaper imports from those countries. The argument that that will benefit consumers must be demonstrated credibly, with a proper impact assessment and economic modelling that fully considers the effect on our domestic producers and jobs in that sector. Lower prices will not benefit consumers who find themselves out of a job as a consequence of our producers going to the wall. Concerns have been similarly raised about the chapter on sanitary and phytosanitary measures in the CPTPP, which are referred to by some academics as “SPS minus” and are significantly lower than the EU’s current sanitary and phytosanitary rules that the UK will inherit as retained EU law. Acceding to that agreement and allowing products that have been produced to lower or differing standards than our own to enter our markets could further compound the threat to our domestic farmers and undermine any future relationship with the EU and the standards alignment that we need.
Sanitary and phytosanitary standards are one of the most sensitive aspects of trade policy and they have, for good reason, been a major point of contention in discussions about our relationship with the EU post Brexit. It is not only our farming sector that is concerned about the impact of those agreements. Last week, we saw reports that the US steel-producer lobby has been petitioning to block or restrict access for UK producers to Government procurement contracts in the United States under the terms of any potential trade agreement. Indeed, President Trump has been abundantly clear with his America first agenda that he will not countenance any trade agreement that he views as being counter to American interests—namely, domestic protectionism and ensuring a US trade surplus with trading partners.
President Trump has publicly stated that the US is
“losing billions of dollars on trade”
and would find a trade war “easy to win”. Such rhetoric should be alarming to British businesses as Trump is clearly not out to do a good deal for us. President Trump stands on an America first platform and believes that by forcing trade partners into submission and competitor companies out of business, he can restore manufacturing in the United States. In truth, those tariffs are hurting US businesses who participate in global supply chains and face countervailing tariffs overseas. As part of his trade war, President Trump has also refused to endorse nominations to the WTO appellate body, thus blocking the progress of dispute resolutions and the enforcement of the rules-based system. We should be very wary of doing a trade deal if we cannot seek enforcement at the WTO for any actions taken in violation of those rules by another country, and the US is blocking that possibility.
A recent report by a number of right-wing think-tanks—many linked to the Secretary of State, who is understood to favour the report—suggested that a US-UK free trade agreement should “enshrine” the “negative list” approach to liberalisation across goods, services, investment and Government procurement, which is conducive to faster, broader and deeper economic integration. The Secretary of State will know that the negative list system, which has been adopted in some trade agreements that we have already entered into, means that future sectors—some of which we cannot currently even conceive—would automatically be liberalised, no matter what the public policy consequences would be. That is extremely dangerous, and it would be good if the Secretary of State assured the House that when he considers future trade agreements, he is mindful of that point and would not wish to have a negative list system that could expose us in that way.
The Secretary of State has established a number of trade working groups, including with Australia in 2016, New Zealand in 2017, and the US in July 2017. To date, we have precisely no information about what has been discussed in those working groups, what progress has been made towards a future trade agreement with those nations, what assurances have been sought and concessions agreed, or what representations have been made on those issues. The Secretary of State has made no secret of his desire to fast-track these agreements and have them ready to go after the UK withdraws from the EU, but it is not at all clear that his counterparts share quite the same ambitions.
Australia has repeatedly stated that its priority is securing a trade agreement with the EU, and the American President has suggested that a trade deal with the US is all but impossible with the Government’s preferred approach to Brexit, as set out in the Prime Minister’s proposed deal. Just this week, Simon Birmingham, Australia’s Minister for Trade, Tourism and Investment, poured cold water over any idea that the UK could quickly accede to the CPTPP noting
“obviously it’s a statement of fact that the UK is not within the Pacific.”
[Interruption.] That is not me; that was Simon Birmingham. He went on to say that
“some of the other TPP members would think that there are some nations within the Asia Pacific region who might be earlier starters in terms of coming in.”
Does the Secretary of State believe that he can confidently conclude these agreements with the same speed and ease with which he promised he would secure the roll-over agreements?
Has the Secretary of State had conversations with CPTTP member countries about the UK’s accession to that agreement, and what commitments has he received or given in respect of the same? He will no doubt be aware that New Zealand has sought, through a series of side letters with other members of that agreement, to disapply the investor-state dispute settlement provisions of that agreement. I would be delighted if the Secretary of State said that he is going to do the same. Will the UK be seeking ISDS provisions in trade agreements with Australia, New Zealand and the United States, despite the fact that, as he said, the Secretary of State believes they should not be necessary
“under systems such as the UK’s”?—[Official Report, 7 February 2019; Vol. 654, c. 385.]
Many colleagues will be extremely concerned that a number of those issues will already have been discussed privately through the trade working groups and that assurances and commitments may already have been exchanged. We are here debating potential agreements that may well already be loosely drafted. This debate can hardly be considered to be a meaningful say from Parliament on the terms of those trade agreements. The Government’s approach to trade agreements has been little more than warm words and window dressing. Public consultations were opened by way of an online survey on the Department’s website on July 2018 and have since closed, but we have yet to have any report on the findings of those consultations.
This approach does not constitute a proper consultation and oversight framework that ensures the best agreement possible for the entire country as we withdraw from the European Union. Key stakeholders are concerned that they are being invited to give views merely as a tick-box exercise, with no real say on helping to shape trade talks and with no capacity to feed back on any complications that concessions during negotiations may present. That is why my party has repeatedly called for a proper consultation structure that would require formal engagement with affected stakeholders, civil society, trade unions and the devolved nations.
Such a process must also ensure that Parliament has a role in the approval of mandates, impact assessments and reviews of trade agreements. The Government voted down every amendment to the Trade Bill to that effect. We have also been clear that consultation alone is not enough. A comprehensive, independent sustainability impact assessment needs to be conducted in advance of the launch of new trade and investment negotiations to establish the potential social, economic and environmental consequences for all sectors and regions of the UK.
To conclude, we in the Labour party would welcome trade agreements that grow our export base across all regions of the United Kingdom and that help maintain and elevate rights and standards. If the Secretary of State could show that these potential trade agreements could achieve those objectives, we would of course welcome them. However, we are extremely concerned at the lack of information presented to Parliament on the prospective benefits and on the potential threats to our domestic producers, which are clearly evident. The Government must ensure that proper assessments are carried out and must ensure that Parliament has a proper say in future trade agreements that are ultimately to be concluded between our nations.
Trade Bill
Debate between Barry Gardiner and Angus Brendan MacNeilTuesday 17th July 2018
(6 years, 4 months ago)
Commons ChamberRead Full debate Trade Bill 2017-19 View all Trade Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 17 July 2018 - (17 Jul 2018)
Barry Gardiner
My hon. Friend has put it very succinctly, and he is absolutely correct. That is why the SNP’s new clause 20 does not respect the devolution agreements; nor is it about ensuring that devolved authorities have a say. If that were the case, I would have expected SNP Members to support the amendment that we tabled in Committee, which called for the Joint Ministerial Committee to be convened to consult on the implementation of regulations under the Bill and on negotiations on future trade agreements. Indeed, our new amendment 19 would ensure that such consultation frameworks are established.
Similarly, in new clause 21, the SNP has sought to ensure that each devolved authority takes aspects of trade competence from Her Majesty’s Government and to provide for devolved authorities to have their own appointed trade negotiators at trade talks. Our new clause 4 could does not support that, because it could ultimately lead to several trade negotiators’ working against each other to secure the best terms only for their respective territories. Such a bunfight at the negotiating table would allow negotiating partners to play our own negotiators off against each other.
We believe that trade deals must ensure that benefits are delivered across the United Kingdom and that a whole UK approach must be taken to negotiations. That is why we have called for advanced consultation to ensure full and proper representation in those negotiations. It is also why we would have been happy to support new clause 22 had it been put to the vote. It sought to ensure transparency on trade talks, and it would have afforded a right to the devolved Parliaments to scrutinise all aspects of a trade agreement and related correspondence or documents as they so required.
Our new clause 4 would absolutely guarantee the right of consent to devolved Administrations whenever a Government sought to implement regulations to carry out their obligations under international treaties. What it would not do is give the devolved Administrations a power of veto over the ratification of international treaties, the negotiation of which is a matter for the Westminster Government. SNP Members would seek to secure the ultimate power of veto that has thus far eluded them in other amendments and that they have been very clear about seeking.
Barry Gardiner
I am pressed for time. I know that you want me to conclude my remarks very shortly, Madam Deputy Speaker.
While other amendments are about consent before the making of regulations implementing obligations arising under a trade agreement, that clause would prevent the trade agreement from ever having legal effect, as it could not be ratified unless the devolved authorities had consented. It has been carefully worded, but its intent is clear: it is not limited only to matters of devolved competence, but covers all trade agreements in their entirety even if no aspect of that agreement would touch on devolved competence and even if absolutely no regulations were required to implement that agreement. New clause 23(3)(b) would ensure that any trade agreement
“having an impact within the territory over which the devolved authority presides”
was subject to this consent power. Quite clearly, every single trade agreement will be, as there will be exporters across the UK who can trade under the terms of that agreement. It is a thinly veiled attempt at securing the Wallonian veto power that the hon. Member for Kilmarnock and Loudoun (Alan Brown) told us in the Committee was his intention.
The Committee took many more pieces of evidence. I will not detain the House with them today, but simply say that new clause 4 absolutely respects the devolution settlement. It sets out the right relationship so that Government cannot overreach into devolved competence nor the devolved authorities reach up into powers that are reserved for this sovereign Parliament.
I also support new clause 19, but I will not detain the House any longer.
Draft EU-Canada Trade Agreement Order
Debate between Barry Gardiner and Angus Brendan MacNeil(6 years, 5 months ago)
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Barry Gardiner
I am grateful to the hon. Gentleman for pressing me on to the substantive part of the debate, but he will understand that the way in which international treaties progress through this House, the way in which they are scrutinised and the transparency with which that is done are matters of real importance. The reason why is that the substance of these treaties needs to be agreed in terms of a mandate. It then needs to be ensured that the scrutiny that applies is available to Members of this House at all stages. That is what in this situation entirely failed to happen.
The Secretary of State said:
“I am sorry that the timescales meant that it was not possible to have a debate before decisions needed to be made on CETA in the Council. This was down to the parliamentary calendar and the timescale set for us.”
“Not possible”? How did he know? He never bothered to ask. Why would the Government so determinedly pursue such a tack? The Secretary of State told us why when he admitted to the Committee in October 2016 that the
“UK could not be seen to block the agreement as it would send a negative signal to Canada.”
In a meeting between the Secretary of State and his Canadian counterpart that took place on 16 July, we are told by the then Canadian Trade Minister, Chrystia Freeland, that
“when I asked him if I could count on his and Britain’s continued support for CETA, he told me Britain would not just be supporting CETA, Britain would be pushing for CETA at the EU table.”
Heaven forfend that Parliament might have had a say in such a deal now that the Secretary of State had given his gentleman’s agreement to Canada!
There are two key issues that Members need to consider today. One is the issue of substance, and we will come on to the reservations on that score that exist throughout Europe, not just on the Opposition Benches, where they are currently being debated in constitutional courts and campaigned on by colleagues in the trade union movement. Incidentally, they were fully set out in Labour’s general election manifesto last year. The second issue is process. Why have the Government repeatedly attempted to avoid proper scrutiny of the agreement? The reality of today’s debate is that it is nothing more than a masquerading exercise designed to give the illusion of scrutiny when there has in fact been so little. We are now too late in the process and can do nothing to alter its course.
Angus Brendan MacNeil
I think many people watching will want to be clear, given the fragile and febrile nature of their politics in the UK at the moment, on what position the hon. Gentleman would adopt on CETA if he was to find himself International Trade Secretary in a few months’ time.
Barry Gardiner
If we were out of the European Union, we would then be negotiating a new trade agreement with Canada and we would ensure that all—[Interruption.] Much that is in CETA is to be welcomed, as was outlined by the hon. Member for Brigg and Goole (Andrew Percy) who intervened on me earlier. Much of it is to be welcomed, but there are aspects of the trade agreement that the hon. Gentleman will recognise, and all of Europe recognises, as simply unacceptable.
Other Parliaments have, of course, had the opportunity to properly register their views on this agreement and perhaps this illustrates why the Secretary of State has been so concerned about allowing the House to have its say. In the Committee stage of the Trade Bill, I set out how a Labour Government would ensure full and proper consultation with key stakeholders—businesses, unions, civil society and the devolved Administrations—in advance of entering into negotiations on trade talks. My party believes that Parliament should have a vote to approve such mandates. That was why we tabled amendments to the Bill in respect of the same, but the Government voted down every single amendment we put forward.
Barry Gardiner
I will give way to my hon. Friend in just a second.
The Secretary of State spoke about the need to give investors protection and security and he has boasted many times in the past 12 months about the record number of FDI deals that he has been able to achieve. Unaccountably, he failed to report that those deals, though record in number, showed a 92% drop in value. Today’s figures also reveal a drop in the number of deals, and the number of jobs saved by such investments is down by 54% year on year, according to his website.
Indeed, many Canadian companies have used investor-state dispute provisions in trade agreements to challenge foreign Governments, whether it has been the closing down of mines in El Salvador following a moratorium to protect unpolluted drinking water, or the Obama Administration’s decision to suspend the Keystone pipeline over concerns about potential damage to the environment. The very threat of facing such a case, even when the chance of winning is in the Government’s favour, can clearly act as a deterrent to Governments from pursuing actions in the public interest—a regulatory chilling effect. This may well have been President Trump’s view when he reversed his predecessor’s decision and greenlighted the Keystone pipeline, thus avoiding costly legal action and the chance of a substantial payout.
Having watched cases taken against the Uruguayan and Australian Governments by the tobacco giant, Philip Morris, many countries are cautious about introducing plain packaging in tobacco product laws. It is not just European Governments who have expressed concerns about ISDS.
Angus Brendan MacNeil
I am slightly puzzled by the hon. Gentleman. At the moment, there is talk about the provisional application of CETA. What situation would he want with CETA? I know that he has reservations—if I have reservations about a car I am going to buy, I do not buy it. He has reservations about CETA, so would he not apply CETA? Would he provisionally apply it? What would his position on CETA be if he were the Secretary of State for International Trade and President of the Board of Trade in a few months’ time?
Barry Gardiner
I did answer that question earlier following an intervention. There are many aspects of this trade agreement that we would welcome and would wish to pursue, but we cannot—[Interruption.]
Energy Spending Priorities: Investors and Consumers
Debate between Barry Gardiner and Angus Brendan MacNeil
Barry Gardiner (Brent North) (Lab)
I thank the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) and his Committee for initiating this debate, for giving the House the opportunity to consider the direction of the Government’s energy and climate change policy, and for their excellent reports.
Like the hon. Gentleman but, I suspect, unlike the Secretary of State, I look forward to the publication of the findings of the National Audit Office’s inquiry into whether the Government will have to pay compensation to carbon capture and storage project developers. That could result in a multimillion pound bill for the taxpayer. I hope that the Secretary of State will acknowledge that this might have been an extremely expensive decision indeed. One would be forgiven for imagining that DECC has received instruction from the right hon. Member for Surrey Heath (Michael Gove) when one looks at the way in which it led the industry on until the very last minute, before finally applying the knife to carbon capture and storage. Well, there we are. It is no wonder that the hon. Member for Warrington South (David Mowat) regretted the decline of the CCS projects. He was quite right to do so. He also spoke very powerfully about the green deal, calling its demise nothing short of a disaster.
The hon. Member for Beverley and Holderness (Graham Stuart) quite rightly praised the Government for agreeing with the Committee on Climate Change on the fifth carbon budget. I agree with him. I just wish that they had actually set it by the statutory limit in accordance with the Climate Change Act 2008. It had to be set and voted on under the affirmative resolution procedure of this House by 30 June. That did not happen. I hope that the Secretary of State will clarify the legal status of the budget to the House. It is one thing to accept the recommendation of the Committee on Climate Change, but simply accepting is not good enough. The Climate Change Act is very clear on that point: it has to be set. So far, it has not been.
The judgment of the hon. Member for Eddisbury (Antoinette Sandbach) was absolutely impeccable. She spoke at great length, but it was a great speech. She talked about the investor community being startled, but in a way that, I trust, did not scare the horses or make her open to the accusation of talking Britain down. It was a very fine speech indeed.
My hon. Friend the Member for Stockton North (Alex Cunningham), despite his sore throat, spoke very powerfully about the need to bring forward the UK carbon plan. He is absolutely right. That goes to the point made by the hon. Member for Beverley and Holderness and by the Scottish National party spokesperson, the hon. Member for Aberdeen South (Callum McCaig). It is great to have the ambition of the fifth carbon budget, but, yet again, we look back to 2011, when the fourth carbon budget was set. We know that the statutory obligation is to bring forward, as soon as reasonably practicable, a plan to show how it will be achieved. Five years later, we are still waiting for that. My hon. Friend’s point was a very fair one: it should be brought forward by the end of the year and rolled out immediately, to give confidence to investors.
My hon. Friend the Member for Southampton, Test (Dr Whitehead) speaks with such knowledge and authority on these matters. He made a very powerful point about the LCF after 2020, and I hope the Secretary of State will give some clarity on that in her closing remarks.
In its latest report, “Meeting carbon budgets”, which was published last Thursday, the Committee on Climate Change showed that there is a need for
“urgent action to strengthen policies”
without which progress on emissions will not continue. We are in a post-Brexit situation. Investor confidence has been lost through heightened uncertainty, creating a crisis in investment that in turn creates a crisis in energy costs, as greater uncertainty results in higher costs of capital. National Grid has issued a warning that energy bills would rise and energy security be put at risk if, like Switzerland, the UK is excluded from Europe’s internal energy market. The Secretary of State herself cited analysis by Vivid Economics ahead of the referendum that warned that the potential impact of exclusion from the IEM could be up to £500 million a year by the early 2020s.
Given the Secretary of State’s clear view on this, which I agree with, and bearing in mind that the Chancellor has been forced to announce that his fiscal surplus target is being dispensed with, as we will no longer be able to balance the books by 2020 as he had promised, and that growth has been downgraded from 2% to just 0.4%, we must ask her with what certainty she is asking us to consider the estimates for her Department. Her Cabinet colleagues have been very clear that to meet the deficit, they can raise taxes, or cut departmental spending, or borrow. Which is it going to be? For goodness’ sake, the Government are in the midst of a financial crisis. The Chancellor refuses to tell us how he is going to get out of it—he says it is up to a future Chancellor to decide, because he knows that in a few short weeks he will no longer be the occupant of No. 11—
Barry Gardiner
I cannot, I am afraid, because of the time constraints.
The Chancellor will not have to make that decision. The Secretary of State is asking us to approve estimates that have about as much chance of remaining solid as an ice cube in a Jamie Oliver stir-fry. This motion is not responsible financial management; it is government by magic wand—think of a number, close your eyes, and make a wish. Will the Secretary of State give a clear answer about her level of confidence that these estimates will be reflected in the outcomes at year end?
Ministers insist that Britain is open for business but energy companies have halted major investments in the UK. This week the Secretary of State told business that she is certain that investment will continue to flow, yet Siemens has paused clean energy investments in Hull, and according to the Government’s external adviser, a future for Hinkley Point C nuclear power station project is now “extremely unlikely”. That is not Her Majesty’s Loyal Opposition “talking Britain down”; that is the Government’s own adviser telling it as it is. Vattenfall is reassessing the risk of working in the UK, which could jeopardise its plans for a £5.5 billion wind farm off England’s east coast. Bloomberg New Energy Finance has warned since the referendum that the uncertainty caused by the result and the upcoming negotiations
“is likely to cause project investors and banks to hesitate about committing new capital, and could cause a drop in renewable energy asset values.”
The Institutional Investors Group on Climate Change, which represents more than €30 trillion of assets, said that the aftermath of the vote
“brings considerable uncertainty and market turmoil.”
These are deeply worrying times, but the Government do not seem to recognise the urgency of quashing such uncertainty and instability. Will the Secretary of State’s Department push for access to the internal energy market as a negotiating priority, and how will the Government gain support from EU member states to accept that? SSE has said that collaboration with other European countries on energy matters is important for UK consumers. What calculations or estimates has the Department made of price premiums on loans that will be demanded by investors in UK energy infrastructure to cover the costs of political uncertainty? How much will that add to the cost of building new electricity generating capacity? To reduce that uncertainty, it is imperative that the UK provides a clear direction of travel on domestic policy. Why did the right hon. Lady fail to uphold her statutory obligation under the Climate Change Act 2008, and not take the necessary steps to ensure that the order was set by 30 June?
The European Investment Bank is the UK’s biggest clean energy lender, having invested €31.3 billion into British clean energy projects over the past five years. Will that funding still be available for projects already in progress or agreed, such as the four clean energy projects under assessment by the European Fund for Strategic Investments? What funding sources have been identified to replace the opportunities that we will lose for research and development in clean energy to power the future? Have the Government discussed the future of Hinkley Point with EDF and/or the French Government, as a result of the vote to leave? The Government estimated in 2014 that by 2020 the annual net savings to the UK economy for the European energy standards and labelling ecodesign would be in excess of £850 million per year. Will those potential savings be compromised by the process of leaving the EU? The right hon. Lady must begin to answer those questions.
As the referendum result was causing political and economic chaos, the final results of the two-year Competition and Markets Authority inquiry into why customers are being overcharged by nearly £2 billion a year for their energy were quietly released. The recommendations are nothing to shout about, as they will not deliver the Prime Minister’s promise from four years ago to put all households on the cheaper tariff. How will the Department introduce more transparency over available deals, and provide support to make it easier for customers to switch, thereby putting an end to the big six milking their loyal customers to maintain profits amid falling wholesale prices?
Hundreds of thousands of families cannot afford their energy bills, and in 2014-15 that contributed to 43,900 excess winter deaths. However, Ministers are still letting energy companies off the hook and failing to ensure that the drop in wholesale prices is passed on to people’s bills. Will the Secretary of State ensure that the UK ratifies the Paris agreement before the Prime Minister leaves office?
Fishing Industry
Debate between Barry Gardiner and Angus Brendan MacNeil(10 years, 11 months ago)
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Barry Gardiner
I would have to rely on the Mandy Rice-Davies defence—“They would say that, wouldn’t they?” The point is that anecdote is not the basis of sound policy. We have to establish the facts. I am as keen to establish them as the hon. Gentleman and, I am sure, the fishermen in his community. Once we have established the facts, we can proceed with certainty.
Mr MacNeil
When politicians talk about science, in reality, as we have just seen with mackerel, the science has followed what is happening. The ICES advice for the increase in TAC in 2014 is a 65% to 79% increase, which in effect is only a 3% increase in what was caught in 2013 owing to fishermen in other states having a certain view of what was happening in the sea. Another issue—this relates to what the hon. Member for Strangford (Jim Shannon) said—is that there are other areas where there is a cod recovery plan in operation but where there were no cod anyway. However, because of the catch compositions the cod recovery plan is leading to the dumping of haddock, and as haddock are being dumped and not landed, consumers will have to choose anther fish, and they will choose cod, so the plan will have the opposite effect to the one intended.
Barry Gardiner
It is important to remember that for every hour spent fishing nowadays—in boats bristling with the latest satellite technology to identify the movement of the stocks, with all the modern gear on board—fishers now land just 6% of what they did 120 years ago.
Of course, fishermen always want to maximise their catch, and rightly so—they are business men—but we have to recognise that the loss of our fishing communities up and down the coastline of Britain has happened because of overfishing. There is no getting away from that fact. We have to put in place a regime that can restore biomass and maximum sustainable yield but also ensure that we get to the point where those communities have secure jobs and secure economic benefits because we have enough fish for everyone.
Common Fisheries Policy
Debate between Barry Gardiner and Angus Brendan MacNeil(12 years, 8 months ago)
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Barry Gardiner (Brent North) (Lab)
First, I apologise to the House because I was introducing a debate in Westminster Hall at the beginning of the debate and was therefore unable to listen to the remarks of the hon. Member for Thirsk and Malton (Miss McIntosh), who chairs the Select Committee. I pay tribute to her for the report. I also pay tribute to the Minister, who has worked assiduously on these matters. I know that he is trying to get a very reasonable voice heard in Europe, where Commissioner Damanaki is doing a wonderful job, but is meeting rather large obstacles along the way.
Decades of intensive fishing in European waters have led to dramatic declines in once-abundant fish populations. It is estimated that 88% of all the assessed fish stocks are over-exploited and that almost a third of all assessed stocks are being fished beyond safe biological limits, threatening their very future. Of the stocks for which a scientific assessment is available, 60% of north Atlantic stocks and 40% of Mediterranean stocks are currently outside safe biological limits. Continuous over-fishing has resulted in less productive fisheries and a gradual loss of jobs and livelihoods. Words such as overfishing, discarding, habitat destruction, unemployment and subsidy dependence characterise EU fisheries. However, we have a unique opportunity, with the reform of the common fisheries policy, to rectify some of those failures.
At the heart of the motion is the demand that CFP reforms should adopt greater regional ecosystem-based management, but if such management is to succeed, it must recognise and respect the commercial interests of fishing communities. Ecological sustainability must go hand in hand with economic sustainability. The New Economics Foundation recently published a report that concluded that more than €3 billion is lost every year due to over-fishing. That money could support an extra 100,000 jobs in the industry. When fish stocks are mismanaged, fishers, their communities and the whole economy suffer.
Some people misinterpret ecosystem-management as putting the benefit of fish before that of fishers, but without sustainable fish stocks there is no fishing industry. The history of our coastal areas sadly bears witness to that, as fishing communities from Stonehaven to Newcastle and from Grimsby to Cornwall have declined over the past century and a half. It is always comfortable for Members of Parliament to support small fishing communities, particularly those in their constituency, but we should also have the courage to point out that the demise of fishing communities is the result of their parents and grandparents’ over-fishing.
The ecosystem-based approach is fundamental to sustainable environmental management. It establishes a strategy for the management and sustainable use of natural resources by considering them in the context of their role in the entire ecosystem. The current CFP and the EU marine strategy framework directive already commit the EU in principle to that approach. Indeed, the CFP was significantly reformed in 2002 with a view to implementing the principles of ecosystem-based management. The tragedy is that that has not been reflected in practice. True ecosystem-based fisheries management would require systemic reform through the introduction of a regionalised management framework. A regionalised management system within Europe would divide EU fisheries into management regions according to ecosystems rather than nations. Unfortunately, fish do not carry passports and do not know when they are travelling from one nation’s waters into another’s, so we must look at ecosystems and not simply national boundaries.
Mr MacNeil
When the hon. Gentleman talks about ecosystems, is he talking about migratory stocks, non-migratory stocks or straddling stocks? What sorts of stocks does he mean?
Barry Gardiner
Let me give the hon. Gentleman a good example: the Baltic ecosystem and the surrounding countries engaged in its regional management structure. He will know that in recent years east Baltic cod had gone into sharp decline. As a result of the regionally based management structure in the Baltic, those countries agreed, on the advice of the regional fisheries management organisation, to halt the catching of east Baltic cod. After putting that moratorium in place, they then allowed an increase each year of only 15%, which was actually below the fishing maximum sustainable yield; if they had had FMSY the biomass of the stock would actually have recovered less quickly. They put that moratorium in place on a regional basis and in accordance with the ecosystem, and those stocks have now recovered to a level that has far surpassed what they were and what they would have been had those countries opted for FMSY: the stocks have actually achieved biomass MSY.
Mr MacNeil
I am grateful to the hon. Gentleman for giving way again and allowing the debate to continue. Does he not see that one stock’s ecosystem is not the same as another’s? When he moved to ecosystem management he would start to have a geographical impact and to impose geographical limits on that, and very quickly he would go down the slippery slope with the common fisheries policy, which at the moment is an utter mess.
Fisheries
Debate between Barry Gardiner and Angus Brendan MacNeil(13 years, 6 months ago)
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Barry Gardiner
No, I am already pressed enough for time.
Certain decision-making powers would be devolved to regional management bodies, in consultation with local stakeholders, in order to tailor the application of central policy objectives for EU fisheries to the specifics of each ecosystem. A fully regionalised management system would include the following features: quotas allocated on the basis of ecosystem regions in order to manage fishing pressure according to the necessities of the different ecosystems; regular scientific assessment of all marine species, not just fish stocks, within a given eco-region to establish the impact of fishing on the ecosystem as a whole; quota allocation on the basis of eco-regions with different licences used in different ecosystem regions and no transfers between the regions.
The discards in the North sea are between 40% and 60% of total catch, while in other European fisheries, such as that for west of Scotland cod, they can total as much as 90%. The vast majority of fish discarded overboard of course die. In an effort to limit fishing to sustainable levels, EU regulations under the common fisheries policy prohibit the landing of commercial species above a given annual quota. However, in practice this often results in the discarding of thousands of tonnes of saleable fish—the over-quota discards—as fishers are forced to cast overboard their excess or non-target catch before landing, so as not to contravene EU law.
The result is a policy that fails to prevent fish mortality above levels deemed biologically sustainable. That is a particular problem in mixed fisheries—the majority of EU fisheries—where fishers will catch more than their landing quota for one species as they continue fishing for others that swim with it, in order to maintain fishing throughout the year. The Government estimate that over-quota species account for about 22% of English and Welsh discards.
The introduction of catch quotas in place of the current landing quotas would make fishers accountable for their total catch, rather than for what they land, thereby eliminating the legal catch and discard of over-quota fish. The current CFP also prohibits the landing of quota species below a certain minimum landing size—MLS—to ensure that they are not caught before reaching maturity, thus preserving the reproductive capacity of the stock. In practice, however, many under-sized fish are still caught and simply discarded at sea. An estimated 24% of discards are quota species below legal MLS, so too small to land. The introduction of minimum catch sizes in place of minimum landing sizes has been successful in Norway in incentivising the use of selective gear in fisheries and minimising the catch and mortality of under-sized fish.
An estimated 54% of English and Welsh discards are of non-commercial species caught as by-catch. Stimulating the creation of new or stronger markets for under-utilised sustainable species such as dab and coley in UK fisheries could result in the elimination of unnecessary waste, greater profits for fishers and a reduction in fishing pressure on other more popular and over-exploited species. We need to be careful, however, that that policy does not encourage the creation of markets for species whose population could not support a sudden increase in harvesting.
There is currently no obligation to conduct regular stock assessments for most non-commercial species in EU waters, as they are not subject to quota restrictions, so there is little understanding of the impact that increased fishing of them would have on their stocks and on the wider ecosystem. The first priority of any policy that aims to eliminate discards and improve demand for under-utilised species, therefore, should be to mandate regular stock assessments for all species, with a view to introducing management plans, including catch quotas, for all species caught in EU fisheries.
At the Johannesburg world summit on sustainable development in 2002, the EU committed to achieving a maximum sustainable yield for all fish stocks by 2015 at the latest, but in 2010 it estimated that 72% of its fisheries remained overfished, with 20% fished beyond safe biological limits, risking the wholesale collapse of those fisheries.
The EU marine strategy framework directive requires that all EU fisheries achieve good environmental status by 2020, which includes the attainment of sustainable fishing levels for all stocks. The European Commission requests scientific advice for the establishment of fisheries management plans on the basis of sustainability, but the European Council is under no obligation to adhere to that advice when agreeing total annual quotas for stocks. The result is that the European Council sets total allowable catch limits that are on average 34% higher than the scientifically recommended sustainable limits.
Ensuring that all fish and shellfish are harvested at sustainable levels is an absolute prerequisite of the future profitability and survival of EU fisheries. By requiring the delivery of that target by 2015, we will ensure that the EU fulfils its international and domestic commitments to achieve sustainable fisheries and end overfishing.
A legal requirement to end overfishing of all fish and shellfish by 2015 will necessitate the following key measures: first, rendering scientific advice binding, thus preventing quotas from exceeding biologically sustainable limits; and secondly, introducing stock assessments and management plans for all fish and shellfish, including non-commercial species that are currently unmanaged, in order to establish sustainable limits for harvesting.
Co-management is an approach whereby Government authorities involve local communities and other stakeholders in management decision making, monitoring and surveillance. The approach aims to encourage co-operation and a shared sense of responsibility, and it has been shown to improve compliance with regulations as well as to improve the effectiveness of management measures, because it draws upon community knowledge to address local socio-economic and ecological issues.
The establishment of regional advisory councils is cited as a key success of the 2002 CFP reform, because they have served as forums for stakeholders to inform policy implementation at the regional level, but they have no decision-making powers.
Small-scale and artisanal fishing represents a vital link between the industry and historical coastal fishing communities, and often utilises lower-impact methods—more environmentally sustainable methods of fishing that draw on local traditional knowledge. A future common fisheries policy must reverse the balance of incentives by allocating access rights to fisheries on the basis of environmental sustainability, so giving priority to vessels that utilise selective gear and low-impact methods of fishing. By enabling the UK to introduce higher standards of management and conservation for UK and foreign fishing vessels within its inshore fisheries, without recourse to the European Commission, we would regain powers to determine and manage our coastal marine ecosystems and the livelihoods that depend on them.
The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) spoke of the importance of ITQs—individual transferable quotas—and the problems that will arise from them. Under this proposal, which is probably the most dramatic in impact of any EU proposal, skippers would be guaranteed shares of national quotas for periods of at least 15 years, which they could trade among themselves—even, if the relevant national Government agree, with fleets from other countries. This is already practised on a smaller scale in several EU member states, including the UK, but it has been taken much further in other countries.
A global survey published three years ago showed that fisheries managed using ITQs were half as likely to collapse as others, which is one of the reasons why the Commission is so enthusiastic about them. However, the blanket nature of its proposals gives rise to serious concerns, and I echo those that the hon. Gentleman expressed. Ecologically, ITQs diminish overfishing and seek to protect the sustainability of fishing in the area concerned, but experience shows that they can give rise to the privatisation of fisheries. That is a very serious point, which the Minister has to take on board.