Trade (Australia and New Zealand) Bill

John Spellar Excerpts

2nd reading
Tuesday 6th September 2022 Commons Chamber

[Anne-Marie Trevelyan]

I thank my hon. Friend for his intervention and, indeed, for his incredible work in the Department over the last year to help us to grow our export opportunities for businesses. He is absolutely right: one of the key opportunities for our service sectors is negotiating that mutual recognition of qualifications, which removes a market access barrier to enable businesses to share their expertise more widely. Not only in the Australia and New Zealand trade deals, but as we work in places such as Canada and the USA, those are key areas where we can genuinely rocket-boost what our businesses will be able to do in taking their expertise across the world.

[John Spellar (Warley) (Lab)]

The right hon. Lady is talking about businesses, but is this not also about individuals in these jurisdictions who have the qualifications and skills? There will be a greater mutual benefit, not just a benefit to the UK. This will grow the economies of the free world and enable our citizens, and those of Australia and New Zealand, to develop their careers and opportunities.

[Anne-Marie Trevelyan]

The right hon. Gentleman is absolutely right. A key element of the Australia and New Zealand trade deals is the improved mobility arrangements, which will not only give those under 35 much more flexibility, but will mean that those with professional skills can move much more easily between our countries, for exactly that reason: to help their skills as individuals, as he says, and as part of businesses to grow those economies mutually. Our trade deals are all about mutual benefit and picking countries with which we have strong ties and want to grow our economies together.

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[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.

[John Spellar]

Has it not been a long-standing problem—even within the EU—that different animal welfare standards have allowed our farmers to be undercut? On beef, might it not be farmers in the Irish Republic who face greater competition? After all, why would people want to send meat to the UK all the way from Australia rather than get it from just down the road? Should we not be looking at supporting our industry domestically, particularly through public sector procurement?

[Nick Thomas-Symonds]

My right hon. Friend is right to raise what we should do domestically. He also illustrates another point. There is a history of trade negotiations, including on different standards of animal welfare, that Ministers could have taken heed of, sought to learn lessons from and put into these negotiations.

The now Prime Minister said that the Government had no intention of striking any deals that did not benefit our farmers, but the reality is that the vast majority of trade deals, which she trumpeted in her leadership campaign, were roll-over deals replicating existing EU agreements—not so much an exercise in driving a hard bargain as a national exercise in cut-and-paste with accompanying photographs on Instagram.

Perhaps it is no surprise that the Prime Minister’s own colleagues have been so critical of her approach to trade. The right hon. Member for Camborne and Redruth (George Eustice) as Secretary of State for Environment, Food and Rural Affairs said that he faced “challenges” in trying to get her to enshrine animal welfare in deals. No wonder the NFU said that it saw

“almost nothing in the deal that will prevent an increase in imports of food produced well below the production standards required of UK farmers”.

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[Nick Thomas-Symonds]

My hon. Friend is absolutely right. If the Government do not give that commitment, we will bring forward an amendment in Committee to seek that commitment.

[John Spellar]

Can we slay this particular red herring, which was also mentioned in relation to the US trade deal? It is not about privatising the NHS. All the Americans said, and in this they were right, was, “We are not saying what you should do with the health service; we are saying that if you decide to privatise it”—which we should not do—“then we want to be treated as equal partners.” That has nothing to do with trade; it is to do with the Government’s health policy. We should not mix up the two, following a political campaign on it.

[Nick Thomas-Symonds]

It is not the threat of the American Government to our NHS that worries me; it is the threat of the Tory Government to the NHS. My right hon. Friend is absolutely right to make that distinction.

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[Drew Hendry]

The right hon. Member is skating over the fact that the Tory Government have neglected their tree-planting duties in terms of their actions on climate change. [Interruption.] Perhaps—if he will stop chuntering from a sedentary position—he should also have a conversation with Irish farmers to see what their position is on this matter.

As we have already heard, but I will now repeat it, the Government’s own trade impact analysis shows that the Australia deal will mean a £94 million hit per year to farming, forestry and fishing, and the New Zealand deal will mean a hit of £145 million to agriculture and food-related sectors. The New Zealand media have been reporting that New Zealand farmers are jubilant about the deal. They are nonplussed; they cannot understand it; they are baffled by this, because, as they have pointed out, the benefits to the UK are negligible.

The UK Government are kicking Scottish farmers while they are down. Farmers are gasping for air, and they already face spiralling uncapped energy costs, crops rotting in fields owing to a lack of pickers, rising diesel costs, the loss of EU farming subsidies, and rocketing fertiliser costs. I can assure the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) that the sector in Scotland will not forgive this. Food and drink manufacture is twice as important to the Scottish economy as it is to the UK economy. As we have heard, even the recent Tory Chancellor, who lost the race to the new Prime Minister by the slimmest of margins, has said that the deal is bad for farmers.

The news for consumers is, of course, not much better. Because we do not know what the split is across the nations and regions of the UK, we cannot say what the impact on people will be, but the best that the UK Government can come up with as a justification for the deal is a prediction that UK households will save £1.20, on average.

[John Spellar]

Will the hon. Gentleman give way?

[Drew Hendry]

I will in a minute.

Perhaps households can get together to buy a single cup of coffee at Starbucks if they pool their resources—

[Drew Hendry]

Or a unit of electricity, as my hon. Friend has chimed in to suggest.

[John Spellar]

Will the hon. Gentleman give way?

[Drew Hendry]

I have said to the right hon. Gentleman that I will give way, but not at this particular moment. If he does not mind, I will continue with the point that I was going to make.

I have just talked about the risible benefits, in this crisis, to UK households. Perhaps the Government are counting on the fact that farmers, and others who are losing out, can drown their sorrows with 20p off a bottle of Jacob’s Creek. Now I will allow the right hon. Gentleman to intervene.

[John Spellar]

I thank the hon. Gentleman. Can he make it clear to us whether he thinks we should have free trade agreements on agricultural products with any countries? If he thinks we should have them, why should we not have them with our great ally Australia? If he thinks we should not have such agreements with Australia or New Zealand, which countries does he think we should have them with?

[Drew Hendry]

I think we should have free trade deals with countries—of course we should—but we should take into consideration whether we will win or lose from them. Those deals should be scrutinised by the parliamentarians who are elected to scrutinise them on behalf of their constituents.

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[John Spellar (Warley) (Lab)]

I think we should initially recognise that trade does not exist in a vacuum. It is about relationships and trust, and which country is better to trust than Australia? In April, we have the Anzac Day commemoration in Whitehall, where we acknowledge and remember the hundreds of years of joint working and joint operations against tyranny and dictatorship. We have the long-standing and deep Five Eyes intelligence relationship, which also underpins our defence of our freedoms, and only this morning the Defence Committee was conducting an inquiry into the AUKUS agreement. We also have much wider relationships—family, political, trading, business, trade union, cultural and sporting—and of course a common basis in the common law.

Therefore, if we are going to do trade deals with anyone—and this is what has always surprised me about the opposition shown by some on the Opposition Benches—it should be a deal with Australia, as we have so much in common. That is why the contribution from the shadow Secretary of State, my right hon. Friend the Member for Torfaen (Nick Thomas-Symonds), was so welcome today. It had a very different tone from some speeches we have heard previously, and it is all the more welcome for that.

We have to recognise—and I forget which colleague mentioned this—that there is always a dynamic between free trade and fair trade. It is a debate that has dominated British politics from time to time over the last 150 or so years, and it has even twice torn the Conservative party apart. It is right to have such a debate, and we therefore need to focus on the details and on the principles, because such agreements cannot be an open door to pillage. We also have to make sure that the other parties are living up to the commitments they make in these agreements. Probably the most telling example is the accession of China to the World Trade Organisation, in that the great failure of the WTO and partner countries has been the failure to hold China to the commitments it made in joining that organisation.

At the same time, unlike some on the right and left of politics who seem to be opposed to trade in and of itself, we should recognise the huge benefits that trade has brought throughout history. Otherwise, we would have to go back to the days before the industrial revolution, when not only did trade drive the growth of Britain as the world’s leading industrial power, but imports of food from the new world fed the new urban masses running such industries. We cannot ignore that.

Equally, while we should not dismiss some of the particular impacts of trade—with sometimes the movement of work and sometimes the exploitation of those opportunities—we should recognise the huge reduction in poverty worldwide post war through the growth in trade. That is especially so, frankly, in China, where hundreds of millions have moved out of poverty in what is probably the biggest move out of poverty in history. Our starting point should be to encourage the development of trade, but with caution. We should not have predatory trade, and certainly not trade based on a race to the bottom on standards.

[Angus Brendan MacNeil]

Does the right hon. Member agree that the trade pursued by the European Union with Australia and New Zealand, which will see economic growth, has on the face of it been done with less risk to certain sectors, including the agriculture sector? Yes, trade is good, but there is also what we are throwing away, and the UK Government have admitted that they are throwing away a few tens of millions on agriculture in the New Zealand deal alone. There was a better balance to have been reached, but in being too keen on getting into the CPTPP and other things, the UK has just thrown the baby out with the bathwater, unfortunately.

[John Spellar]

I have always believed in the basic principle in any negotiations: that it is the terms of the deal, not the fact of the deal, that matter. Too often in takeover bids in this country, the intermediaries are far keener to get the deal done than to make sure it is a good deal for the participants.

However, I also caution the hon. Gentleman that in terms of meat production, we ought to be looking more at the problems posed by, for example, Brazil, or indeed the EU—in many cases there has been EU competition with less favourable animal standards than we have in this country. We should recognise that this is not unique in any way to the Australian agreement. I also point out that some of the hon. Gentleman’s arguments about percentages may also apply in meat terms to these two trade deals.

Returning to the topic of basic standards, particularly workers’ standards, a welcome development in international trade discussions has been the strong position taken by the Biden Administration in making sure that the beneficiaries are the working class—middle class in American terms—who have built the trade union movement in America and built America, and also workers in other countries. The British Government should note that. I am pleased that the TUC has been brought along to the trade talks with the United States in both Baltimore and Scotland; I fear that was probably at the insistence of the United States rather than willingly from the UK, but it is a good precedent and I hope it will be applied in other trade talks, particularly with Australia and New Zealand.

Australia and New Zealand have strong trade union movements and high labour standards. This deal is not about making ourselves liable to face undercutting competition; this is about opportunity and the ability of firms to trade, perhaps on much more equal terms than with some other countries.

That was touched on earlier in the debate, in relation to the movement—particularly in services and professional areas, but also in manufacturing—of skilled and technical workers. The Minister must acknowledge that previous Home Office restrictions on visas have been a real point of friction with both the Australian and New Zealand Governments. It would be a welcome development if other Government Departments influenced and pressurised the Home Office about that, not just for the economies on both sides but for individual development and to give skilled and professional workers in all three countries the opportunity to move and develop their careers and experience.

Alongside that, I hope there will be mutual recognition of qualifications. Instead of, frankly, allowing professional bodies’ self-interest to override that, we should look at where there is enough common ground and make sure that retraining and recertification, if needed, is very limited rather than taking a blanket approach. As I said earlier, the fact that we are common-law countries should help to facilitate that.

Political, geopolitical and trade interests often meet. For example, China has launched a massive campaign against Australian wine to put pressure on Australia on policy issues. We should work with the Australians as much as we can to facilitate our ability to import Australian wine, although not to the detriment of the growing number of British vineyards, obviously. That would have the side benefit of getting the attention of the Australian trade Minister, Senator Farrell, who represents the great wine-producing state of South Australia.

[Angus Brendan MacNeil]

The right hon. Gentleman makes a great point. Australian wine producers have argued that Treasury banding undermines the spirit of the agreement. To those who are exporting to another country, it would feel like a bit of skulduggery if that country’s Treasury undermined the agreement.

[John Spellar]

The Chair of the International Trade Committee makes the exact point made to me by Senator Farrell. I hope that that was heard by those on the Government Benches.

To broaden that point, with reference to AUKUS, following the Russian assault on Ukraine, there is a much deeper understanding across the world of the fragility of supply chains and the imperative of supply chain resilience. That is about not just physical industrial capacity, but a skilled workforce. Indeed, AUKUS is in part about the movement of skilled workers in the defence industry to sustain the agreement. It is also about critical materials, such as rare earths. Actually, they are not particularly rare, and Australia has the ores in abundance, but China has consolidated them—often through unfair competition and under-pricing competition —by dominating the refining capacity. Those are areas where we need to work with our security allies, but they also need to be our trade allies. Of course, that is also about trusted suppliers, so there could not be, for example, a “buy America first” policy. There is one level of understanding of that in the United States, but there needs to be greater understanding. That must be an objective of Government.

We should welcome the deepening of relations with our Australian friends and, in particular, with the new Government and Prime Minister Albanese. We look forward to building on that for a successful and shared future.

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[Gareth Thomas]

My hon. Friend is right to highlight that ongoing concern. His intervention reminds me that it would be remiss of me not to praise the International Trade Committee, whose work on the deal, notwithstanding all the difficulties that it has faced, is an example of the very best of our Select Committee system at work. Indeed, I say gently to its Chair that perhaps his Committee’s work is one small example of how the UK is stronger together.

I sympathise with the frustration of cross-party Committee members that no cohesive strategy for trade negotiations has been published, making it that little bit easier for Ministers to be pushed and pulled in whatever direction those with whom we are negotiating want. I hope that whoever is confirmed as Secretary of State for International Trade will address that key issue quickly. Why has there been such a contrast between what was promised to the House for such key deals and what has happened? Is it just incompetence, laziness or poor performance from individual Ministers, or is there something more profound here? Is it that the implications for procurement, British agriculture and tenant farmers—the hon. Member for Penrith and The Border (Dr Hudson) and others flagged up that issue—as well as for our food standards, for labour and human rights, for action on climate change, for buying British and for good digital regulation are so significant that Ministers felt it better to try to discourage a sustained look at the provisions in these deals?

The Australia and New Zealand trade deals are not going to deliver the sustained boost to economic growth that the country needs. Many have made that point. Welcome as the deals will nevertheless be, they will deliver at best marginal benefits for business, limited gains for consumers and few additional jobs. In the post-truth world that the Conservative party now sadly inhabits, the deals have been sold to us all as the start of a brave, amazing, fantastical post-Brexit era for British trade and growth. One can only wish that the same effort had been put into the actual negotiations as into the stories being told about these deals.

To be fair, there is genuine excitement from some about these deals: Australian farmers, Australian negotiators and New Zealand farmers were all delighted. On the upside, too, the deals have not led to the value of the pound dropping or a decline in foreign investment, and British farming and food businesses have not seen an immediate hit to their contracts. That, at least, is an improvement on the trade deal that the previous Prime Minister negotiated with the European Union. The overwhelming sense of the trade deals—with Australia in particular, and with New Zealand—is of deals done in a rush, with the now Prime Minister desperate for any deal, at almost any cost.

Some commentators have suggested—this point has been echoed by many in the debate—that in the rush to sign off the two new free trade agreements and bring the Bill to the Floor of the House, Ministers have failed to grasp how the deals leave Britain badly exposed for future negotiations with, for example, the US or Brazil. They argue that by undermining our food, animal welfare and environmental standards, the deals create difficult precedents in key parts of our economy, and that English farmers—and those in the devolved nations too—have been left most at risk of a long-term cumulative hit to their, and our country’s, economic interests, with the terms of these deals being used against us in even more significant negotiations.

It is, I have to say, extraordinary that Ministers made such a big offer to Australian farmers and got so little in return. The unconditional abolition of tariffs on Australian farm produce with few safeguards—a very big concession—is particularly surprising given that Ministers did not even negotiate basic protections for our most famous products, a point made by my right hon. Friend the Member for Torfaen (Nick Thomas-Symonds) and the SNP spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). Why did Ministers not prioritise protections of UK geographical indicators for our most iconic brands, such as Scotch whisky, Swaledale cheese, traditional Grimsby smoked fish, Yorkshire Wensleydale and Cornish pasties, to name just a few?

It is not just in Australia and New Zealand that Ministers cannot negotiate protections for our country’s best brands. Ministers still have not secured GI status in Japan for half the products they claimed they would. Indeed, ironically it appears Ministers are hoping their failure here will be partially put right through the knock-on impact of the EU’s negotiations with Australia.

[John Spellar]

My hon. Friend rightly concentrates on the Government’s deficiencies in handling the negotiations on agriculture, but, as a Member of Parliament representing the heartland of the industrial revolution, does he not see advantages for British industry in this agreement?

[Gareth Thomas]

Absolutely, I see advantages for British exporters, which is why, in my praise for my right hon. Friend in the opening part of my speech, I underlined that we want to see increased trade with Australia and New Zealand going forward.

Given the huge concessions Ministers made on access to our agricultural markets, it is frankly also surprising that they did not insist on more protection against competition from food imports produced to lower standards. Human rights, labour rights and climate change have also been largely unmentioned.

Turning specifically and lastly to the Bill, it gives Australia and New Zealand better access to our Government procurement market, worth almost £300 billion, in return for our firms getting a little better access to their procurement markets, worth just £200 billion together. We will seek to amend the Bill in Committee to ensure there is better scrutiny of the procurement sections of both UK trade deals. The Conservative party has been missing while the people of our country are struggling to make ends meet and deeply worried about how their businesses and other businesses will survive. The Bill will make little substantial difference to those challenges. A more robust trade strategy to generate wealth and share it more fairly is long overdue, and much more robust parliamentary scrutiny needs to be one of the lessons that Ministers learn from the passage of these two deals. We want greater trade with both Australia and New Zealand. We will not oppose the Bill tonight, but we will seek to amend it during its remaining stages.

Trade (Australia and New Zealand) Bill

John Spellar Excerpts

Report stage
Monday 12th December 2022 Commons Chamber

[Gareth Thomas]

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

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

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

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

[John Spellar (Warley) (Lab)]

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

[Gareth Thomas]

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

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

Will the hon. Member give way?

[John Spellar]

Will the hon. Gentleman give way?

[Richard Thomson]

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

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[John Spellar]

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

[Richard Thomson]

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

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

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

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

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

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

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

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

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

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

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

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[John Spellar]

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

[Sir Mark Hendrick]

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

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

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

Trade (Australia and New Zealand) Bill

John Spellar Excerpts

Consideration of Lords amendments
Wednesday 22nd March 2023 Commons Chamber

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Last week the Office for Budget Responsibility published figures on trade which changed the context for this debate on what is an apparently innocuous amendment from the other place. According to the OBR, we now face two years of declining exports, with a huge 6.6% drop in British exports this year, a further drop next year, and then an average growth in our exports of less than 1% for the next three years. We are reaping the results of the Conservatives’ failure to negotiate a better trade deal with the European Union or complete a trade deal with the United States, and the impact of significant cuts in support for attendance at trade shows and access to overseas markets is now all too obvious.

This amendment, and the debates in the Lords, strike me as a big missed opportunity—not for want of trying by Opposition colleagues—to start attempting to put things right. Abolishing the Department for International Trade and moving the deckchairs around in Whitehall is not going to hide away the Conservatives’ dismal record on trade and economic growth. We are lagging behind the rest of the G7 on exports to the world’s fastest growing economies in the G20, and nothing that the Minister has said so far, this afternoon or in previous debates, is going to improve the situation any time soon.

I do not want to detain the House too long, but while the amendment might involve the insertion of only one word in the Bill, the difference it makes does matter, both for what it does and what it does not do. Although there is support across the House to increase trade with our friends in Australia and New Zealand—particularly on the Labour Benches, not least because both countries are now led by progressive Labour Governments—there has also been widespread concern, among hon. Members and certainly outside the House, about what Ministers have negotiated, particularly in the trade deal with Australia. As I say, this amendment feels like a missed opportunity to begin to address those concerns.

We know that Ministers decided to throw British farmers under the bus, ignoring the concerns of the National Farmers Union. We know that the Prime Minister could have intervened, but did not. And we know that the desperation to get any deal meant that too much negotiating leverage was given up. One of the questions that the amendment raises is whether its wording in any way helps to offset, even just a little, those significant negotiating failures by the Government. We on the Labour Benches warned Ministers that the Australian deal would be used as a precedent by the other countries with which Ministers are negotiating, and as the Minister knows, that is exactly what is happening. The weaknesses in the deal that his predecessors negotiated are now being used to demand further concessions in our current negotiations, particularly by the countries with big agricultural interests.

I have considered carefully whether this amendment helps us to find any comfort following the devastating analysis of these trade deals offered to the House by the right hon. Member for Camborne and Redruth (George Eustice), when he explained, back in November, that we

“gave away far too much for far too little in return”.—[Official Report, 14 November 2022; Vol. 722, c. 424.]

He also said that

“the value of the UK agri-food market access offer was nearly double what we got in return”.

I have also considered carefully whether this amendment from the other place improved the scrutiny by Parliament, or even the scrutiny of how the regulations bringing into effect the procurement chapters of these trade deals are implemented. If the amendment had forced Ministers to consult with and in the nations and regions of the UK before the regulations were introduced, it would have been extremely helpful. After all, surely one of the most important lessons from these two trade deals is that the process of parliamentary scrutiny for trade deals is not fit for purpose.

Granted, Ministers in the Department for International Trade were busy disagreeing and attacking each other at the time, but when the then Trade Secretary failed to turn up eight times to give evidence before the International Trade Committee on these deals—and despite that, would not extend the time for the Committee to report on the deals to the House—it became clear that something was very amiss with the system of scrutiny. It is hardly surprising that the International Trade Committee has been abolished by Ministers, but instead of improving the scrutiny of trade negotiations, or even just the regulations implementing the procurement chapters of the negotiations, the amendment makes things a little easier for Ministers.

[John Spellar (Warley) (Lab)]

Will my hon. Friend confirm, notwithstanding the absurdities of the previous Trade Secretary, who was more concerned with a photo opportunity than a proper deal, and some of the other difficulties, that our position is that it is enormously important that we have good trading and all other relations with our great allies in Australia and New Zealand, particularly after we recently strengthened and deepened our strategic relationship through the very welcome AUKUS deal?

[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.

--- Later in debate ---

[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.