Sheep Farming: No-deal EU Exit

Debate between George Eustice and Gareth Snell

Tuesday 3rd September 2019 Commons Chamber

[George Eustice]

The hon. Lady has it the wrong way round, as it is always the case that for sectors that are producing goods, such as agriculture, a weaker exchange rate against the euro leads to higher prices. It is no secret that since the referendum result in 2016, when there was an adjustment of sterling against the euro, agriculture commodity prices in the UK have been at highs, and that has helped farm incomes. That is a recognised fact; exchange rates are a key driver of agriculture commodity prices.

We recognise that even with those important factors going in our favour, the sector is still exposed. Some modelling has been done by a number of different organisations, including the NFU. It is important to recognise that tariffs are a tax on consumers first and foremost. Some estimates therefore anticipate that were the EU to apply full most favoured nation tariffs on lamb, there would likely be an increase in consumer prices in the EU of up to about 20%. That reflects the fact that the UK is the dominant lamb producer in the EU and there are limited other options for it to source its lamb from.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The Minister mentions choosing to apply MFN tariffs. I profess not to be an expert on the sheep industry, but in the ceramics industry we have been told that there is no choice over MFN and it is the tariff that has to be applied to abide by World Trade Organisation rules. Is the Minister now saying from the Dispatch Box that the Government can apply discretion on that? If so, will he outline what that plan is?

[George Eustice]

Yes, absolutely, there is discretion, and the UK Government have already indicated what our tariff schedule would be in a no-deal scenario. Governments have the opportunity to have a lower applied tariff—lower than the bound tariff set in the WTO. The option is also open to any Government unilaterally to suspend tariffs. Indeed, should it wish, tariff suspension would be open to the EU, which I think is unlikely. Alternatively, and more likely, is the creation of an autonomous tariff rate quota for lamb that would be open to the whole world, including the UK. There are many options that both the EU and the British Government have unilaterally to apply tariffs that are lower than the WTO bound tariff.

However, as I said, it is important to recognise that we are the dominant producer. The EU could source more product from New Zealand, provided it had access to the ceiling currently set under the EU tariff rate quota. In the medium term, countries such as Spain could increase their production, but they are unlikely to be able to do that in the short term. For those reasons, it is likely that there would be an increase in consumer prices in the European Union as a result of its applying the full MFN tariff.

It is important to recognise that that increase in price would dampen demand in the European Union. Modelling suggests that that would increase supply in the domestic market and that as a result prices in the UK could fall by up to 30%. To put that into context, that means prices going back down to roughly where they were in 2015, which was a difficult year for the sheep sector. We are talking about a significant potential reduction, but it is not unprecedented. It would simply be going back to levels prior to the referendum result.

European Union (Withdrawal) (No. 5) Bill

Debate between George Eustice and Gareth Snell

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 3rd April 2019 Commons Chamber

[George Eustice]

I do not agree, because subsection (3), as amended by amendment 20, would mean that it would not be possible to have a date in a motion under subsection (2) that went beyond 30 June, because subsection (3) would make it explicit that the date could be no later.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Without wishing to cause a row with my right hon. Friend the Member for Leeds Central (Hilary Benn), I agree with the interpretation of the hon. Member for Camborne and Redruth (George Eustice). It has always been the case in this place that a motion cannot trump legislation, so the Bill would have primacy if the motion included a date that was later than that on the face of the Bill. While I understand my right hon. Friend’s misinterpretation, I would interpret the Bill in the same way as the hon. Gentleman.

[George Eustice]

I thank the hon. Gentleman for his intervention. Subsection (3) would have to not exist for the point of the right hon. Member for Leeds Central (Hilary Benn) to be valid. Amendment 20 would amend subsection (3) and therefore change the terms under which subsection (2) could be exercised, which would in turn have a direct impact on the reading of subsection (5).

Oral Answers to Questions

Debate between George Eustice and Gareth Snell

Thursday 29th November 2018 Commons Chamber

[The Minister for Agriculture, Fisheries and Food (George Eustice)]

The Government obviously did not agree with every element of the Migration Advisory Committee report. The food industry is the most important manufacturing industry in this country and horticulture is one of our most productive agricultural sectors. It is important that we ensure that these crucial industries have the labour requirements that they need in future.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Illegal waste sites such as the Twyford factory in Stoke-on-Trent pose a huge risk to our environment. Despite the £10 million that was in the Budget, that site is not eligible for that help because it remains in private ownership. Court action has ordered a clearance. The local authority and the fire service want it cleared. Will the Minister meet me and those interested parties so that we can find a way forward so the site can be cleared once and for all?