Traidcraft and Fair Trade

Liz Twist Excerpts

Tuesday 18th December 2018 Westminster Hall

[Liz Twist (Blaydon) (Lab)]

I beg to move,

That this House has considered Traidcraft and the future of fair trade.

It is a pleasure to open this debate under your chairmanship, Mr Hollobone. I start by thanking my right hon. Friend the Member for East Ham (Stephen Timms) and the hon. Member for Colchester (Will Quince), who chairs the all-party parliamentary group for Fairtrade, for their support in making the application to the Backbench Business Committee.

In one of those strange coincidences, when I was thinking about my Christmas card competition for local primary schools last summer, an officer from Gateshead Council—my local authority—telephoned the office and suggested that this year the theme should be fair trade. That seemed an excellent idea to me. Gateshead prides itself on being a Fairtrade authority. In Traidcraft, a Fairtrade company and charity based on the Team Valley trading estate, we had a real local connection and a topic that would get pupils thinking about just what fair trade means for us here in the UK and for producers who grow, create and supply fair trade goods and products, especially in the lead up to Christmas, when we think of gifts and rich food.

I was shocked to hear in September that Traidcraft was in difficulty, facing potential closure and consulting its 60-plus staff based in its Team Valley warehouse and offices on potential redundancies. Traidcraft has a personal significance to me. Over many years I have been a Traidcraft customer, and its craft products are scattered around my home. Some may even have appeared as raffle prizes over the years. Indeed, I have been a trader, although sadly not a very successful one.

[Mary Glindon (North Tyneside) (Lab)]

I congratulate my hon. Friend on securing this debate. I could share many happy memories of buying Traidcraft goods from the late 70s. My sister used to run a stall for Traidcraft in her church, St Robert’s in Morpeth. She ran an evening at the place where I worked in North Shields. It is not just about getting gifts and helping people to have nice things from abroad; what was crucial was the raising of awareness for people who otherwise would not be aware of the need for fair trade.

[Liz Twist]

My hon. Friend is absolutely right that Fairtrade traders, through Traidcraft, have worked to sell goods and, importantly, to raise the social and fair trade issues around those goods.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I, too, congratulate my hon. Friend on securing this debate. Last month, I attended an event hosted by Traidcraft in Newcastle entitled, “Who picked my tea?” It is a brilliant campaign that has resulted in Yorkshire Tea, Twinings, Tetley and Clipper all publishing who is picking their tea and their list of suppliers. That should help drive up the standards for those tea plantations in Assam. Does my hon. Friend share my view of the importance of Traidcraft’s work? Will she join me in calling on PG Tips and Typhoo to publish that information as well?

[Liz Twist]

I most certainly do agree with my hon. Friend. Traidcraft and the Fairtrade Foundation have played a huge part in ensuring that producers are accountable and that those principles are applied fairly.

My mother loved to look at the Traidcraft catalogue, find out what was going on from the Traidcraft bulletins and buy products—mostly chocolate, it should be said—from the back of her church. Churches have played a hugely important part in selling Traidcraft goods. She would get me to buy products either from the Traidcraft shop in Team Valley or on the internet.

Apart from my personal reasons for feeling sad at the news of possible closure and the loss of 60 jobs from our local economy in Gateshead, there are much more serious reasons why so many people were sad to hear of Traidcraft’s difficulties. As the company has said, it was

“overwhelmed by the outpouring of public concern and offers of support which demonstrates that the mission of Traidcraft still matters to many, many people”.

That is absolutely right. Next year marks the 40th anniversary of Traidcraft plc. Established as a Fairtrade enterprise, it initially provided a market for handcrafted items from Bangladesh at a time of great political turmoil there. Handicrafts, because they required minimal capital outlay for women in affected communities and could be produced alongside farming activities, provide an additional income source while preserving food security. Those values of supporting women, developing resilience and environmental concern have been recurring themes for Traidcraft over the years.

From its creation in 1979, the company developed into a public limited company with 4,500 individual shareholders and shares traded on the ethical stock exchange. It buys groceries and craft items from more than 70 producer groups in around 30 countries. Goods are sold through community resellers, online and through specialist fair trade shops. Traidcraft has pioneered fair trade products such as wine, charcoal and rubber gloves, alongside more familiar products such as tea, coffee, chocolate and biscuits. It has reached into thousands of homes—including my mum’s—and communities through its community sales force. What is more, it has had a real impact on the lives of countless producers and their families, delivering real social change.

Traidcraft was at the forefront of the Fairtrade movement and was a founder member of the Fairtrade Foundation along with Oxfam, the Catholic Agency for Overseas Development, Christian Aid, the Women’s Institute and the World Development Movement. The Fairtrade movement developed the Fairtrade certification system, which enabled those same fair trade principles to be applied by mainstream businesses. That was a vital tool for those businesses wanting to establish fairer and more just trading relationships and provided an independent guarantee for consumers.

[Jeremy Lefroy (Stafford) (Con)]

I congratulate the hon. Lady and the others on securing this important debate. I declare an interest, having been a member of the board of Twin, a fair trade organisation. I have been involved in fair trade for well over 20 years. The point that she makes about mainstream organisations is absolutely right. Does she agree that without the work of Traidcraft and others, such as CAFOD and Twin, fair trade would not have been taken up by the mainstream supermarkets, resulting in the enormous boost to fair trade that means that the UK has, I believe, the largest fair trade market in the world?

[Liz Twist]

The hon. Gentleman makes an excellent point. I sincerely believe that without the input of those organisations and Traidcraft, we would not be in the position where we now take it for granted that we can obtain fairly traded goods in mainstream supermarkets and other shops. I most certainly agree with him on that point.

The Fairtrade Foundation has recognised that Traidcraft plc’s approach has been an inspiration to many and that the approach it pioneered in 1979 is now also being taken forward, as the hon. Gentleman said, by other brands and businesses that choose to trade fairly. Traidcraft also established a separate development charity, Traidcraft Exchange—thankfully, it is not under threat—which is supported by individual donations and institutional donors including the Department for International Development, Comic Relief and the Big Lottery Fund. The charity works with farmers and artisans who are not part of fair trade supply chains and campaigns for justice in international trade.

So, what happened to Traidcraft? Just as for many other UK businesses, life has been difficult. The retail environment has been particularly challenging. The success of fair trade products in mainstream suppliers and their availability in supermarkets is welcome, but that challenges fair trade enterprises such as Traidcraft on price and scale.

Much as we might like to escape the B-word, it is simply not possible. Currency fluctuations immediately after the EU referendum and uncertainty about Brexit continue to affect Traidcraft. Traidcraft estimates that the drop in the value of the pound within a week of the referendum cost the company £350,000. With most of the company’s £2.4 million of purchases from suppliers in developing countries paid in dollars, that early 15% currency drop meant that Traidcraft had less to spend, and holding true to its long-held fair trade principles meant that it could not, as others might, exert downward price pressure on its suppliers.

[Catherine McKinnell]

I share my hon. Friend’s concern about the impact on Traidcraft, and its need to reduce operations, because I, too, am proud of the fact that it has such strong roots in the north-east, in our region. Does she share my concern that the implications are not short term? Does she agree that we need to ensure that not only Traidcraft but all businesses that want to trade ethically can do so, and that that is not affected in any way by our departure from the EU?

[Liz Twist]

I thank my hon. Friend for that intervention. From our experience in the north-east, we know that a great many companies—not just Traidcraft, which we are discussing today—continue to feel the impact of the current uncertainty and fluctuations.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I congratulate my hon. Friend on securing the debate and emphasise its importance for future world development. Traidcraft appears to have been hit by a perfect storm in so far as Brexit and currency fluctuations have damaged its business model, and uncertainty in world markets and trade agreements, and changes in consumer purchasing behaviour, have conspired to undermine it. Does she agree that, given the importance of Traidcraft’s small businesses in taking people in the most vulnerable countries out of poverty, there is a strong case for the Department for International Trade and DFID to look at developing a model of support that will ensure that such businesses survive in a very difficult international environment?

[Liz Twist]

I thank my hon. Friend for that intervention, and I will touch on some of those points later.

Brexit, as we have said, continues to affect the company’s trading. When I spoke to Traidcraft’s chief executive, Robin Roth, shortly after the announcement of a potential closure, I asked what I could do to help to secure Traidcraft’s future. He told me that the best thing that I could do would be to encourage people to buy from Traidcraft in the run-up to Christmas, as a strong Christmas—the Christmas catalogues were nearly ready—would allow Traidcraft to look to a future for the organisation.

That is what I have tried to do locally, and—with the help of my right hon. Friend the Member for East Ham—in this House. I hope that many hon. Members will have bought at least some of their Christmas gifts from the Traidcraft catalogue, which we sent to all Members some weeks ago. Traidcraft do a fine line in quality socks as well as more decorative crafts, and they have certainly featured on my Christmas list.

I am glad that Traidcraft supporters have, I am told, responded magnificently. That has meant that the company has been able to put together a plan for the future that will see the company refocus and survive. Sadly, many of the jobs in Gateshead will be lost, the warehousing will be outsourced and there will be a focus on food and related goods and a very much narrower range of crafts, together with a new emphasis on consumers buying co-operatively. I look forward to seeing the new “Traidcraft 2” develop and grow, and will continue to support it.

Traidcraft, as part of the fair trade movement, has some asks of the Government. I thank the Minister for inquiring in advance whether there were any particular issues for which he could prepare. I do not believe that any of the asks will come as surprises to the Minister, although I was unable to give him that notice.

First, the Government need to reassure the many producers and farmers in vulnerable developing countries that the UK will put in place measures to preserve market access—if necessary, unilaterally—to avoid disruption. They urge the Government to provide reassurance that the needs of poorer countries and vulnerable stakeholders will be taken into consideration as future trade policy is developed and implemented.

[Jeremy Lefroy]

Does the hon. Lady agree that one of the great benefits of the work of Traidcraft, and others, has been that it works on the ground with producers and farmers, and enables them not only to increase their incomes, but to improve their quality and so much else? That engagement on the ground with producers and small-scale farmers, with whom I have worked for 30 years or more, is vital, because it means that money gets to the grassroots. So often, money does not seem to trickle down. This is money, support and agricultural extension work going in at the grassroots.

[Liz Twist]

I thank the hon. Gentleman, and I agree with him on all those points. One of the important things about Traidcraft has been that personal connection through the “meet the producers” tours, and being able to see in the catalogue who produces the goods. We must never forget the impact on individuals of the work of Traidcraft and other fair trade organisations. I hope that the Minister will reassure us that DFID will play its part in continuing that work.

The UK has a strong record of using its aid programme to support business development. The Government should continue their development work in that area and re-emphasise the inclusive approach that we have talked about within that, through a clear gender focus and support for small and medium-sized enterprises, ensuring that the trade and business environment enables them to voice their needs and to thrive.

As Traidcraft goes forward, it will look to offer consumers even greater transparency. As part of the review of the Modern Slavery Act 2015, the Government should update the official guidance to encourage companies to publish where they buy their goods from and the wages of their supply chain workers. The Government should consider legislation to make human rights due diligence mandatory, so that we can have that transparency and see exactly what is being done.

Finally, Parliament is considering the Agriculture Bill, which is perhaps not in the Minister’s immediate purview, although I am sure that he can have some input.

[The Minister of State, Department for International Development (Alistair Burt)]

I have a lot of farming constituents—trust me.

[Liz Twist]

Yes. As Parliament considers the Agriculture Bill, the Government could table amendments that establish more comprehensive regulation, supporting fairer purchasing practices all the way along agricultural supply chains.

Earlier this month, I went to the Traidcraft warehouse sale in Team Valley and, yes, picked up some bargains, although it feels wrong to do that knowing the difficulties that the company has faced. While there, I spoke to a member of staff who was tidying up the shelves and said how sad I found it. He surprised me by saying that it was not sad; Traidcraft plc has a plan and a future to look forward to, although there will not be the same range of crafts.

Although I was surprised, I am sure that his was the right attitude, and it will ensure that the company has a long and sustainable future—different from what it has been, but still upholding and strengthening the fair trade principles that it has been instrumental in developing, and continuing to work with like-minded organisations in the Fairtrade Foundation. I wish it every success.

[Several hon. Members rose—]

--- Later in debate ---

[Alistair Burt]

Clearly the right hon. Gentleman has had prior sight of my remarks if he is asking such a perceptive question at this time. I will come to that issue in a moment.

Our immediate priority on leaving the EU is to deliver continuity in our trading arrangements, so that developing-country firms exporting to the UK do not face new and damaging trade barriers—that is one benefit of securing a deal on leaving the EU, rather than no deal, and the Government will determinedly strive for that, as will all Ministers. To that end, we will put in place a UK trade preferences scheme that will, as a minimum, provide the same level of access as the current EU scheme by granting duty-free, quota-free access to 48 least developed countries, and generous tariff reductions to around 25 other developing countries. We will also seek to replicate the effects of the EU’s economic partnership agreements, which are development-focused trade deals with African, Caribbean and Pacific countries. We aim to maintain the preferential access to UK services markets for least developed countries that is guaranteed through the LDC services waiver—that, I was pleased to note, is a better deal than the one currently offered through the World Trade Organisation, which is an important consideration.

As well as maintaining preferential trade access for around 100 developing countries, those trade arrangements also embed the principles of inclusive and sustainable trade that Traidcraft and others have long argued for. For example, the UK’s trade preferences scheme will include an enhanced tier similar to that of the EU, which grants special tariff reductions to developing countries in return for progress against ratifying and implementing international conventions on human rights, labour rights, the environment and good governance.

More trade does not have to come at the expense of workers, the environment, human rights or the growth of least developed countries, and the Government firmly believe that it is in everyone’s interest to avoid any kind of race to the bottom on standards. That point was at the heart of the remarks by the hon. Member for Birmingham, Edgbaston when she asked what more might be included in deals, and my sense is that as these opportunities evolve, we should all press for the highest standards. As I said earlier, we have a minimum baseline, but that is not where the United Kingdom should be. We should be able to operate to higher standards, and we should work through them. My sense is that DFID and the Department for International Trade recognise that and wish to ensure it is the case. There is much work to do for these new agreements, and the House would not be fair if it took the bottom line minimum standard that we “must” have in place as our intention or ambition, because I am sure we will be keen for it to be developed.

The hon. Member for Strangford asked about modern slavery, and I shall say a little more about that. At last year’s UN General Assembly the Prime Minister launched the “Call to Action” to end forced labour, modern slavery and human trafficking, in which specific commitments are set out, to address modern slavery at the national and international level. It has been endorsed by 43 countries[Official Report, 7 January 2019, Vol. 652, c. 2MC.] so far. On the International Day for the Abolition of Slavery, my right hon. Friend the Secretary of State for International Development announced a £40 million package of new funding, forming part of the overall £150 million spend that the Prime Minister committed the Government to at the UN. That package of support will help more than 500,000 vulnerable men, women and children, and includes £13 million for the second phase of the work in freedom programme, the UK’s £20 million contribution to the global fund to end modern slavery, and the £7 million of DFID support to Nigeria.

That is all in addition to existing DFID programmes such as the £8 million regional women and girls protection programme operating in Greece and the Balkans, protecting girl and women refugees by providing shelters and strengthening national counter-trafficking mechanisms, and the £22 million¹ responsible business programme, which is spreading responsible business approaches. That international strategy, overseen by the Prime Minister’s taskforce, has the aim of driving down slavery in source countries to the UK, and others of high prevalence, and effecting change through multilateral channels.

[Liz Twist]

A specific request to the Government was to update the official guidance to encourage companies to publish where they buy their goods from and the wages of their supply chain workers, and to consider legislation to make human rights due diligence mandatory. Are the Government prepared to make that commitment?

[Alistair Burt]

My remarks have gone even wider than the copy that was obviously supplied to the right hon. Member for East Ham. DFID has recently updated its supplier code of conduct to require companies to sign up to the UN global compact, thereby promoting responsible businesses and committing companies to take action to address such issues. Responsible business is about more than just small or one-off projects that create win-win outcomes for business and society; it is the expansion of firms’ core business in developing markets, embracing socially and environmentally positive conduct through supply chains. That is why we have updated the code. We are encouraging businesses to contribute to economic development in ways that are socially responsible and environmentally sound, and that help to defeat modern slavery.

Hon. Members raised the question of gender focus, and all DFID private sector work goes through a gender lens. We recognise the changes that have taken place, as well as the particular pressures on women when working through these issues. The Commonwealth Development Corporation has a gender strategy, and DFID has its Work and Opportunities for Women programme. As I have explained, there are specific programmes directed at supporting women.

The hon. Member for Blaydon asked us to consider legislation to make human rights due diligence mandatory. That is a matter on which we must encourage, rather than legislate. We are encouraging better reporting on human rights, through grants to Shift and the Ethical Trading Initiative. We also rank human rights performance through corporate human rights benchmarking. We do not have plans at present to make that mandatory through legislation. It would be difficult to enforce. However, the question of how to promote that and to work with others on it is much on our minds. I think that is important.

There is more we must do to ensure that the benefits of trade are spread widely, levelling the playing field for those on the margins. That is important between countries, which is why the Government have a range of programmes to support the least developed countries to benefit from global trade, including our flagship trade facilitation programme TradeMark East Africa, and the recently launched Commonwealth Standards Network.

--- Later in debate ---

[Liz Twist]

It seems to me that there has been a good deal of agreement on the issue of fair trade from all sides in this debate. All hon. Members who have taken part, whom I thank, have recognised the social impact and significance of fair trade standards and the use, as the Minister said, of fair trade as a key tool in poverty reduction.

It is amazing that, as many hon. Members have said, those fair trade volunteers standing in draughty church halls up and down the nation should have produced a real blast that has changed things for the better, leading to big business adopting fair trade standards and affecting producers in faraway countries, such as those banana producers in St Lucia mentioned by my right hon. Friend the Member for East Ham (Stephen Timms). It has been a real turnaround.

Another issue that was picked up widely in the debate is the importance of inclusivity, of helping women and recognising their importance in trading and eradicating poverty. That is a key message that we must not forget: enabling women to trade and to support their families for a fair reward, and pursuing, as the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said, the overarching campaign for justice. We have heard about the importance of the co-operative movement and its role in fair trade, which we must certainly recognise; the impact that not only Traidcraft—although most definitely Traidcraft—but many other members of the Fairtrade Foundation have had on big business; and consumers’ enthusiasm to follow fair trade, with a 7% increase in Fairtrade sales last year.

I welcome the Minister’s comments in response to the specific queries from Traidcraft. While his comments are very welcome, I am sure that Traidcraft and other fair trade producers will continue to push the Government to go one step further to ensure that we really can pursue fair trade, with an emphasis on gender focus and poverty reduction. Traidcraft has had a difficult time, but it has a plan and it will survive. It is not too late, by the way, to order for Christmas: we have until the 21st, so I encourage everyone to look out their catalogues and order. I wish Traidcraft well in its new role.

Question put and agreed to.

Resolved,

That this House has considered Traidcraft and the future of fair trade.