Trade (Australia and New Zealand) Bill (Second sitting)

Lloyd Russell-Moyle Excerpts

Committee stage
Wednesday 12th October 2022 Public Bill Committees

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

Q Nick, you mentioned some carve-outs around procurement on environmental grounds, but we know from the Government’s numbers, which I challenged on the International Trade Committee, that they believe that New Zealand lamb, for example, even with the import carbon, is lower carbon than British lamb. As I say, I challenged them on some of their figures on Welsh lamb, in particular, because I am not convinced of that. However, assuming that is the case, the environmental carve-out would not stand and, on price and environmental grounds, Welsh lamb would effectively be excluded from procurement. We could be in a situation where schools in Wales were not able to serve Welsh lamb to their children, and were instead serving New Zealand lamb.

The deal does not cover schools in New Zealand and Australia, because those public institutions are at the state level, not the federal level. If, for example, we produced a certain crop or fish, such as British cod, cheaper, those products would not have that easy access, so people in Australia having fish and chips would not necessarily have British fish or British potatoes. Do you not think there is an inherent unfairness in this deal? Should there be some procurement conditions in the Bill to ensure that it is about reciprocity and, where reciprocity does not exist, to allow devolved or local authorities to take a divergent approach, as Australian local authorities will be able to do?

Nick von Westenholz: I certainly agree with the principle of what you say: these deals should be reciprocal. There are a number of elements of the Australia deal where there is an asymmetry. In some of the environmental aspects, there are provisions that apply to UK-wide environmental regulations, but only to Australian federal regulations rather than those at state level. Most Australian environmental laws actually exist at state level, so the vast majority of environmental laws are not covered by this trade deal. I would say that that is an imbalance and an asymmetry in the deal.

As I say, as a point of principle, I agree with you. The rather lengthy annexes to the FTA set out which bodies are covered at both national and sub-regional levels. It is not always easy to discern exactly what is and is not covered, so I will bow to your knowledge on the exact differences in the bodies that are covered—I would not be able to confirm that myself—but, where there are differences, we would be concerned about that.

I would temper that a little with the fact that I am not sure we think there will be a major exchange of business through procurement contracts on food as a direct result of this deal. We will need to keep an eye on that. It will probably be other, bigger industrial services contracts that are likely to benefit, so I would not want to over-egg it. However, as a point of principle, I agree with you.

Jonnie Hall: I will add one thing quickly. There was a reference to the carbon content of lamb from New Zealand versus the carbon content of Welsh lamb, or indeed Scottish lamb. I think that would be a real sticking point in many ways, because that carbon is not necessarily calculated using the same process and the metrics may not be directly comparable. We need a level playing field in how we measure the carbon or climate impact, or indeed any other environmental impact, of production in Australia and New Zealand versus production in the UK before we can draw any sort of comparison. If you cannot do that, you have to be very careful about any assumptions you make about importing any product because of its smaller carbon footprint or any other environmental impact before you rush into any deal.

Gareth Parry: I agree with everything that has been said. I have not seen the figures relating to the carbon footprint, but if they are correct, thank you for challenging them. I also agree with the point about carbon calculators, and as a union we have been raising that issue on a national level. The same calculator may be used to compare neighbouring farms, or even on a national scale, but the issues become even more apparent when we look further afield and discuss trade deals: the issues that arise in comparing the carbon footprints of two farm holdings five miles apart also apply when we compare the carbon footprint of a product produced in a UK nation with that of a product produced on the other side of the world.

It is really important to consider the scale of production in countries such as Australia and New Zealand, compared with the UK. I guess that has something to do with the conclusion that the carbon footprint is lower. The scale of production over there—and things are produced to different standards there, as has been said—cannot be compared to that in the UK.

[Lloyd Russell-Moyle]

Q That is a fair point. The figures I quoted were from the Government’s Trade and Agriculture Commission, which gave evidence to the International Trade Committee recently. The Bill not only allows the Secretary of State to implement secondary legislation where it is required, but allows them to do so when they think it would be advisable. That is broader. We have signed an asymmetrical deal; we have given away more than we have got, and have opened up our markets more than the Australians have opened theirs to us. We will allow in a lower standard of goods, but the Australians will do likewise. The Government have sold us down the river, because we have accepted a deal written by the Australians. Should we be slightly more restrictive in this Bill? Should we say what things are required by the deal, and not give the Secretary of State any wriggle room to suddenly leverage in other things that they might want to include?

Nick von Westenholz: As a general rule, we are nervous about the overuse of secondary legislation to implement Government policies. That goes back to the earlier point about parliamentary accountability and scrutiny.

[Lloyd Russell-Moyle]

Q Hopefully through the affirmative procedure.

Nick von Westenholz: Yes, indeed. I would not like to comment, because you would need more expert legal commentary on the precise powers available in the Bill. I sit on the Trade and Agriculture Commission to which you referred, and our experience from that supports the points made by Jonnie Hall. We found very varied calculations of the relative carbon emissions from New Zealand and UK red meat production, which is exactly the point made earlier. To give New Zealand farmers due respect, on a global scale, they have comparatively very sustainable and good global emissions—as do we; we should be proud of ourselves as well.

--- Later in debate ---

[Dr Mullan]

I thought not. Thank you.

[Lloyd Russell-Moyle]

What about by Belgium?

[Dr Mullan]

By us. [Interruption.]

--- Later in debate ---

[The Chair]

I call Lloyd Russell-Moyle.

[Lloyd Russell-Moyle]

Q Thank you for clarifying the negative and positive procedure. You are right that the use of the negative procedure means it will be very unlikely that, even if one Member prayed against it, it would get a full debate, and almost certainly not a vote. It would have to get the Front Bench and a large number of MPs to secure a debate. We know that on a number of occasions, even when things have been prayed against because of recess and scheduling times, they have still slipped through, so it is no guarantee, whereas a positive procedure is a guarantee.

I have asked people about the scope of the secondary legislation that the Secretary of State can lay down. In regard to the trade deal, the scope is slightly wider than “must”; it is currently phrased as “may”. Do you think that the scope is correct at the moment, or should it apply only to things that the Government are legally required to bring forward under the trade deal?

Rosa Crawford: Yes, we are concerned that the scope is very broad. As has been said by you and a number of members of the Committee, the negative resolution procedure makes the process for scrutiny and debate, and for full democratic—[Inaudible.] Using “may” terminology, rather than what the Government are legally bound to implement, introduces an element of concern that there might be a whole range of things brought in through this legislation that are not strictly required to be brought in, and that could be problematic because this Government have not suggested they are going to take an approach that is about protecting social standards and ensuring that social criteria are indicated in public procurement. We are therefore worried that there might be additional measures that would allow for further liberalisation of the public procurement processes, and for businesses that do not respect workers’ rights to be awarded public money. That would completely undermine the standards, so we are very concerned about the broad drafting of the Bill.

[Lloyd Russell-Moyle]

Q Thank you for that, Rosa—much appreciated. I want to bring you on to the way that the Secretary of State gets to introduce these secondary pieces of legislation, because that is how much of the Bill will be enacted in reality, not through on what is on the face of the Bill. There is no requirement for them to consult with businesses, trade unions or other stakeholders. I am not suggesting that we create a complex mechanism, but what is your view on a line requiring the Secretary of State at least to demonstrate that they have consulted stakeholders and potentially the International Trade Committee, and sought their views before the laying of a negative or positive procedure? What is your view on requiring consultation with the International Trade Committee and stakeholders such as trade unions?

Rosa Crawford: We would strongly support the inclusion of such a provision because, as I say, it is essential to consult trade unions on the provisions in all parts of the trade agreement. On public procurement specifically, we need consultation with the unions to ensure we have the requirements there so that international labour standards and environmental standards are upheld, and that we pursue public objectives such as reducing inequalities through public procurement. That consultation with trade unions and parliamentarians is really important. The International Trade Committee is an important Committee that should be consulted, because there is expertise there on the public procurement provisions; then maybe other Committees that are relevant and have an interest should be consulted. Having that requirement for consultation with MPs would be a welcome addition to the Bill.

[Bill Esterson]

Q Can we go back, Rosa, to what you were saying about the impact on workers’ rights, and indeed environmental considerations? Can I confirm that your concern—or one of your concerns—about the Bill and the trade agreement behind it is that organisations have the ability to undercut rights and standards, in spite of what is elsewhere in domestic legislation?

Rosa Crawford: Yes, that is correct. With both the UK-Australia and the UK-New Zealand trade agreements, you have a weak labour chapter that makes reference only to the ILO declaration, rather than a requirement of fundamental international labour organisation standards respected by both parties. That is an issue in Australia and New Zealand because, despite the fact they both have progressive Governments, neither has ratified all the fundamental ILO conventions. New Zealand has not ratified the fundamental conventions on minimum age, health and safety, or freedom of association, and Australia has not ratified the fundamental conventions on minimum age, and health and safety.

Without that base of fundamental rights, there can be potential for a pressure on rights to lower here, as businesses take advantage of the market access they can get through the UK-Australia and UK-New Zealand trade agreements to places where they can potentially respect rights less. That could pressure rights to be lowered here. You do not have a labour chapter that has high standards, requirements and rights, and it has an ineffective enforcement mechanism that requires a proven effect on investment and trade, which we think will be difficult to meet.

There are similar provisions in the CPTPP labour chapter, despite the fact that CPTPP contains countries that are egregiously breaching labour rights—such as Vietnam, where trade unions are banned, as well as Brunei. We have not seen the CPTPP labour chapter being used at all. To us, those kinds of provisions are ineffective when they are included in a trade agreement, so it is concerning that the trade agreements we have with Australia and New Zealand do not have those effective provisions in place for labour standards. It sets a concerning standard for trade agreements we might sign with future partners, particularly as the Government are considering signing trade deals with places where labour rights are much worse, such as Gulf states, India and Israel.

The direction of travel is concerning in Australia and New Zealand. The inadequate protections around environmental standards also have an impact on workers’ rights; allowing produce with lower environmental safety standards to be imported into the UK potentially exposes workers here to more dangerous chemicals and other production methods that impact on workers’ safety and protection. We are concerned about the approach taken in both agreements.