Trade (Australia and New Zealand) Bill

Lord Lansley Excerpts

2nd reading
Monday 9th January 2023 Lords Chamber

[Lord Lansley (Con)]

My Lords, I am glad to follow my noble friend for these purposes, the noble Earl, Lord Sandwich, as we are fellow members of the International Agreements Committee. I ask noble Lords to bear with me, as I am the fifth member of that committee to speak in this debate. I hope not to repeat too much of what my colleagues have said but, in so far as the scrutiny of these two agreements is concerned, the committee in this place was able to produce a report in June last year, which was debated here on 11 July. To that extent, I think that many of the criticisms of the scrutiny of these deals were of the other place, rather than here. They have been scrutinised here, as was demonstrated by that debate, in a timely fashion under CRaG.

My friend the noble Earl, Lord Sandwich, referred again to the importance of the Government having a trade policy document, and referenced the New Zealand Trade for All strategy. This was the first agreement entered into by New Zealand after the publication of that policy document. That demonstrates the benefits of a high-quality document. I was rather struck that noble Lords have been quoting George Eustice, the former Secretary of State at Defra, who I will refer to later. It was important when he said that we should look at strengthening the role of Parliament in scrutiny and perhaps even agreeing the negotiating mandate. My noble friend Lord Frost referred to that. As he said, countries such as Japan and the US, and the European Union, all use their parliamentary processes to their advantage. As my noble friend said, we do not want disagreements to be suppressed within government and then erupt afterwards, with Ministers saying, as George Eustice did, that we gave away far too much for far too little in return. I do not happen to agree with him but that is not the point. We should be able to see what the Government’s objectives are in trade policy—not necessarily the detailed negotiating trade-offs but certainly the objectives. As the noble Lord, Lord Kerr of Kinlochard, said, we can illustrate that by reference to examples. We ask about matters such as the Government’s approach to investor-state dispute settlements but all we get in reply is, essentially, the conclusion that they have reached on any individual negotiation, not what the Government’s approach is in general.

The result was different in different agreements, depending upon the approach of the other counterparties. There are a number of illustrations of that. The noble Earl, Lord Kinnoull, chair of the EU Affairs Committee, was here a moment ago. That committee and the International Agreements Committee have a right to expect that we are consulted soon about what the Government’s policy is in relation to carbon border adjustment mechanisms and the implementation of emissions trading schemes, not only between ourselves and the European Union but on the impact that the policy will have on our trading policy more generally. If we do not do that, we will find that, as a consequence, it is potentially one of the largest non-tariff barriers being erected across the globe, alongside the issue that the noble Earl raised about the Inflation Reduction Act in America.

This has been an interesting and wide-ranging debate. In the rest of what I have to say, I want to focus on the Bill itself. This has been a great debate, and I have much enjoyed it, not least the maiden speech of my noble friend Lord Swire. We overlapped for only 14 years in the other place. I hope that perhaps we will overlap a little longer in this place—who knows, as he is not 74? It is a great pleasure to have him here and the benefit of his experience in our debates.

It is not in my register of interests, but I should say that my sister-in-law is a sheep farmer in north Wales. Even over Christmas, she did not raise the question of the Australia or New Zealand trade agreements with me at all, so I do not know what her view on these may be—just as well, perhaps.

Those of us on the International Agreements Committee welcomed these agreements as being of high quality and demonstrating what can be achieved; that is also my personal view. There is a feeling that some of the 32 chapters were included without sufficient substance and that the substance will have to be added over time. For example, I thought that the innovation chapter in the agreement with Australia was a very good thing, but we will not know what it is going to mean for some time to come. I hope it will mean something pretty substantial.

This Bill simply provides the power to implement the procurement chapters—chapter 16 in each of the two agreements—and it is necessary because the powers are not there already. Once the Procurement Bill passes, the powers will be available in that legislation to do this by statutory instrument in the future; the noble Baroness, Lady Liddell, made this point earlier. The Procurement Bill means that we will not see primary legislation for purposes such as this in the future. I think that is probably correct, because the changes in our domestic legislation are relatively modest. In future, this kind of thing should be done by statutory instrument, as long as—taking the point made by the noble Lord, Lord Kerr—it is done by an affirmative procedure, because there will be a whole range of changes. The other place implements the tariff changes, and this place looks at things such as the procurement changes and a whole raft of others, but we should be doing such things by affirmative procedures wherever possible. That will enable us to exercise some control if need be—if there is a serious problem—at each stage. I hope that the ratification process will be under way by then; we will have seen it under CRaG. If there are serious problems associated with an agreement, we should know beforehand.

I said I wanted to refer to George Eustice again; I am going to mark the card of the noble Lord, Lord Purvis of Tweed, in advance of his speech, because he referred to George Eustice’s speech at Oral Questions. The point that George Eustice was making was that he believed a problem with the agreements was that they could lead to hormone-fed beef coming to this country but that this would also be possible under the CPTPP. I do not think he is right about that. In any case, it is not a problem associated with the Australia and New Zealand free trade agreements; it is an issue we need to address in the CPTPP. That is when it comes up. What is the dispute resolution mechanism under the CPTPP? If necessary, that would need to be addressed by our Government in the context of that agreement itself.

I took part in the passage of the Procurement Bill and tabled amendments which would have limited the nature of the repeal of this Bill by that one in due course. The problem is not that the Procurement Bill will take future powers instead of this Bill but the way it repeals it. The Procurement Bill will repeal:

“An Act of Parliament resulting from the Trade (Australia and New Zealand) Bill that was introduced into the House of Commons on 11 May 2022.”


So if we amend this Bill, it will be repealed by the Procurement Bill in due course. This is not a satisfactory procedure. The assurances that we received in this House from my noble friend Lady Neville-Rolfe during the passage of the Procurement Bill were that, if we amend this Bill, the Government will look to ensure that any necessary changes might be made to the nature of the repeal during the passage of the Procurement Bill in the other place. I ask my noble friend Lord Johnson of Lainston simply to reiterate, if he may, that same reassurance.

I am not aware of a necessity for amendment. In the other place, the Official Opposition supported the Bill, and the amendment they were looking for was for further impact assessments. As my noble friend Lord Udny-Lister rightly said, the Government have committed themselves—and I hope my noble friend will further commit the Government—to two-year monitoring reports and a five-year comprehensive evaluation of both agreements. Frankly, that should be sufficient for this purpose, so I do not think we need to amend the Bill to make that happen.

From my point of view, there are issues that we have raised and issues that I feel strongly about in the agreement. For example, there is the fact that we managed to get an agreement with Australia before the European Union did; perhaps that is one of the benefits of Brexit. However, is it not ironic that, for example, the geographical indications element of our agreement is wholly dependent on the European Union securing changes in the Australian geographical indicators regime so that we might take advantage of it? It is ironic and regrettable. It is just one more of the many illustrations of how we want to see what our trade policy should be and, in future, to see that we scrutinise not only the deal that the Government return with but the negotiating mandate that they take with them in the first place. In those circumstances, I think we would find our overall scrutiny and the support we were able to give to the Government’s trade policy all the better, all the stronger and probably all the more effective internationally.

Trade (Australia and New Zealand) Bill

Lord Lansley Excerpts

Committee stage
Monday 23rd January 2023 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I will speak to Amendments 6 and 19 in this group. The questions posed by the noble Lord, Lord Lennie, in moving Amendment 1 are very sensible. I look forward to the Minister’s reply.

According to today’s press, we are now 15 years behind on the commitment that we would reach £1 trillion of trade within a decade. It is now estimated that the target set by the coalition in 2012 will not be achieved until beyond 2035. This highlights the fact that we are starting to see the consequences of the significant non-tariff barriers introduced by this Government over recent years. Therefore, it is vital that mechanisms are as streamlined as possible for procurement and the rest of the trade agreements.

Amendment 6 is designed to probe the discrepancies in threshold levels in the Government’s procurement legislation, currently going through the House of Commons and which has been through scrutiny in the House of Lords. It probes why they are different for those seeking procurement opportunities for Australia as compared with those seeking them here at home. If you are a business seeking to bid for procurement in the UK, you now have to operate under quite a markedly different approach from that if you are looking for procurement opportunities within Australia.

I welcome the Minister’s letter to noble Lords, which he promised at the end of Second Reading and fulfilled. It highlights what we knew: that, factually, there is a difference in the threshold levels. The letter simply states that Australia was not willing to have the same thresholds as us, and so we simply said that we would have its thresholds. What did we get in return? If this is a concession to Australia then surely we got something in return as far as access is concerned.

The report on the agreement from the Australian Parliament’s treaties committee makes for interesting reading, as does our own report from the House of Lords International Agreements Committee. The Australian report is 225 pages long and can be summarised as: “We got a good deal.” Our House of Lords report, which is 36 pages long, can be summarised from our point of view as: “No, we didn’t.”

The Australian report highlights the fact that the Australians wanted to maintain their levels of thresholds—that was very clear. Thresholds are important; a considerable amount of scrutiny that we did on the procurement agreement was about whether the procurement would be below or above the threshold. If it is below the threshold, the reporting mechanisms, the contracts approach, and the way that schemes or pooled contracts can be put together are different. So we now have a higher rate for Australia.

At Second Reading, I raised the fact that this was done by subcentral contracting bodies. The Minister’s letter to me says that in effect I was wrong in saying that Australia was unique, because Canada has the same approach as Australia’s—but not for subcentral levels. The agreement that we rolled over for Canada for the CETA agreement, has the lower threshold, and we have now gone to the higher one. We are simply trying to find out what we got in return for providing a concession to Australia over the threshold levels. The higher threshold means that there will be extra complexity for businesses.

Amendment 19 is simply a probing amendment on the point that was raised earlier on the Procurement Bill by the noble Lord, Lord Lansley, which was simply trying to seek protections. If we try to change this Bill and its mechanisms for the good, those changes will be protected by the Procurement Bill, which, as the Committee will be aware, will automatically repeal this one. We have the rather ridiculous situation that we are in Committee for a Bill that will be automatically repealed by a Bill that is going to go into Committee in the House of Commons. This is a mechanism to try to protect any of what we do. On that basis, I hope the Government might be minded to accept Amendment 19, or indeed they might have their own mechanisms or commitments, so that we are not wasting our time in Committee.

[Lord Lansley (Con)]

My Lords, three important issues arise from the limited number of amendments here, and I want to say something about each of them.

I shall start with the last amendment, Amendment 19. The noble Lord, Lord Purvis of Tweed, referred to the debates on the Procurement Bill, in which many of us participated. We are in a situation where the Procurement Bill will in due course repeal this legislation. We can see the timing a little more readily now: all being well, we should complete the passage of this Bill and I hope it might reach Royal Assent if not by the end of February then certainly very early in March.

The Procurement Bill in the other place still has a substantial amount of work to be done, and doubtless it will return here with amendments. That being the case, I suspect it would be rash to assume that it would pass before late May at the earliest, especially since the Session is to run longer. The Procurement Bill brings its provisions into force two months after the Bill itself is enacted, so in my view we could be in July at the earliest, and maybe in August or September, before the relevant provisions and the repeal take effect.

That being the case, there seems to be a perfectly good rationale for this Bill being used to create the necessary regulations. One matter that we did not get quite clear in our previous discussion is that this Bill, once enacted, can be used to make regulations. Those regulations will subsist even though this Act will subsequently be repealed by the Procurement Act, as it will become. So there is a purpose in passing the regulations in the meantime. There is a particular purpose, which I will not trespass into, relating to the relationship with Scottish legislation. The fact that this Bill can be used to make those regulations is particularly helpful.

The noble Lord, Lord Purvis of Tweed, knows that I agree with the proposition that, if an amendment were to be made in this House to this legislation, it would be inappropriate for it to be automatically repealed. However, we secured assurances from my noble friend Lady Neville-Rolfe to the effect that the Government under those circumstances would make whatever changes might be necessary to the Procurement Bill in another place. I am hoping that my noble friend Lord Johnson of Lainston will have a similar briefing and a similar reassurance to give us.

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[Lord Purvis of Tweed (LD)]

I am very grateful to the noble Lord; as usual, he is extremely perceptive. The point I am seeking to make is that, under the GPA, subcentral and regional bodies are covered. We have existing arrangements under the previous EU rules for subnational bodies, and we currently have subnational special drawing rights with the EU. My question is: what impact will the higher threshold that we have conceded to subregional bodies within Australia have on those businesses? I fear that it means a great deal of complexity, so, for us to say back to the Government that they should be having discussions with Australia to bring the thresholds down, rather than just give up, would make sense for British businesses.

[Lord Lansley (Con)]

Well, obviously, if we were in the course of further discussions through the Joint Committee arrangements on the free trade agreements to modify the agreements so as to reduce the thresholds, I imagine that there would be some benefit to our businesses—but that is not the position we are in at the moment. I certainly do not see that we can arbitrarily and unilaterally impose different thresholds through our legislation. The Minister will have to confirm if I am correct, but I did not understand it to be the case that the WTO general procurement agreement gives us existing access to entities in Australia’s procurement below the federal level. I stand to be corrected if I am wrong about that, and I have no doubt that the Minister will have the briefing to tell me if I am wrong. For those purposes, I just do not agree with Amendment 1 as moved.

[The Minister of State, Department for International Trade (Lord Johnson of Lainston) (Con)]

My Lords, I am delighted to be speaking in what is my first Bill Committee in your Lordships’ House. I start by saying how grateful I am for the engagement that I have had with the noble Lords, Lord Lennie and Lord Purvis, since Second Reading of this important Bill. I am also grateful to them for tabling the amendments in this group. I also thank my noble friend Lord Lansley for those extremely helpful interjections.

As we have heard, this group deals with how the Bill impacts on the UK’s procurement rules, both now and under the Procurement Bill, which is currently awaiting Committee in the other place, once it is enacted. I recognise the concerns raised by noble Lords on protecting UK contracting authorities and the importance of the discussions we are having in this Committee. Having listened to the contributions of noble Lords today, I hope to reassure the House that these amendments are not required. Perhaps I may begin by thanking this House’s International Agreements Committee for its valuable scrutiny of the Australia deal, the report on which stated:

“The Government has been broadly successful in incorporating its objectives on procurement into the agreement and we welcome the procurement chapter.”


On Amendment 1, on general effect, in the name of the noble Lord, Lord Lennie, I reassure the House that these powers cannot make changes beyond what is necessary to implement the procurement chapters of the Australia and New Zealand agreements, while ensuring that the UK procurement system continues to function. I think my noble friend Lord Lansley covered that in his comments. Rather than conferring unnecessary powers on the Government, Clause 1(2) and (3) ensure that, when the regulatory changes are made, they do not have the effect of creating a separate, parallel set of regulations for Australia and New Zealand suppliers alone. This is the concept of conformity.

As a member of the WTO Agreement on Government Procurement—the GPA—the UK, as has been discussed, has a most favoured nation obligation to not discriminate in its treatment of businesses from different parties to the GPA. To meet this obligation, the changes needed to the procurement rules resulting from the Bill need to apply to all GPA parties, as I think we have also discussed. This is laid out in the Explanatory Notes, which, for useful repetition, I restate:

“This will ensure procurement regulations remain uniform and coherent by not imposing different or conflicting procurement procedures on contracting authorities for procurements covered by the FTA, and ensure the UK can implement its obligations in the FTA in a way that is consistent with the UK’s other international procurement obligations.”


The Bill will lead to a wider range of protections for tendering parties and, ultimately, better value and choice for our procuring entities. The changes will make the system simpler, which is something all parties desire.

Turning to Amendment 6 on the equalisation thresholds, I understand the concerns of the noble Lord, Lord Purvis, about these agreements placing additional burdens on suppliers—and, frankly, contractors or contracting parties—by having a different threshold to that in the UK’s procurement regulations. I have great sympathy with his objective. However, I hope to persuade the noble Lord that his amendment is unnecessary and, in doing so, show that the UK can meet its market access commitments in both the Australia and New Zealand free trade agreements and can bring these agreements into force.

Amendment 6 proposes that no regulations can be made in respect of subcentral procurements that are valued above the threshold amount specified for such procurement in the Procurement Bill. The value I have here is 200,000 special drawing rights. By not allowing any regulations to be made for subcentral procurement with a value in excess of the threshold amount, the UK would not be able to give effect to its market access commitments—my noble friend Lord Lansley covered this very successfully—for all subcentral procurement under the UK-Australia FTA, because the threshold for subcentral procurement is 330,000 SDR; or any subcentral procurement under the UK-New Zealand FTA, valued at 200,001 SDR or more.

Having different thresholds—after our discussions, I took this away and investigated it—between parties is commonplace in the GPA, as we have discussed. For example, as I believe I mentioned in the letter sent to the noble Lord, at subcentral level the UK has a threshold of 200,000 special drawing rights, as do New Zealand and Japan, while Canada and Australia have a threshold of 355,000 special drawing rights.

On the question of whether the different threshold values between the UK rules and the FTA present a burden to UK contracting authorities, let me reassure the Committee that, under the current UK procurement rules, the only threshold that contracting authorities need to worry about is the one in the UK rules. That is the core point. This is because the SDR thresholds set out in the FTAs themselves determine the contracts that, in the event of an Australian or New Zealand supplier wanting to challenge a UK procurement procedure, are eligible to be addressed by UK domestic courts. So, effectively, this simply allows the concept of challenge.

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I do not see this group of amendments as doing anything other than enhancing and improving the Bill. They will not wreck the Bill, but they could make a considerable difference to how the public and farming communities view the implementation of the Bill, and I hope the Minister will agree.

[Lord Lansley (Con)]

My Lords, it may be that I am not paying sufficiently close attention, but it struck me as rather odd that the starting point was a discussion of the advice that was given to the Secretary of State on 13 April last year by the Trade and Agriculture Commission in relation to the Australia deal and on 16 June last year to the Secretary of State on the New Zealand deal. The purpose of that advice was to answer a number of questions. To characterise them generally, they were, “Do these agreements undermine our statutory protections and our ability to protect animal welfare and human health?”—and, to characterise again, the short answer in each case was “No, it does not”. So it seems me that the starting point, not least of Amendment 3, is undermined. It seems wholly unreasonable to ask for a report from the Trade and Agriculture Commission when the TAC has already had the opportunity to give its advice to the Secretary of State.

The second thing that is missing from the debate so far is that Ministers have been very clear, not least in the letter that I think was sent to the International Trade Committee in the other place and to our International Agreements Committee, that they are committed to a monitoring report on both these agreements every two years and to a comprehensive evaluation five years after the coming into force. Some of these amendments look for earlier and more frequent reporting. I have to say, earlier reporting seems to be misplaced. It is going to take time to understand the impacts of these agreements, not least because, for example, the tariff rate quotas that are available for some of these products have not yet been absorbed, so the starting point for thinking about what is the base case for the impact of the agreements must at least allow for the possibility that, in the absence of the agreements, there might have been some increased importing from Australia and New Zealand using existing TRQs.

The third thing I want to say is about George Eustice, who I like. We have worked together, and I enjoyed working with him, but I have to say two things. Number one, if you subscribe to my view of collective responsibility—I see former Ministers in their places—it does not stop when you leave the Government subsequently. You subscribe to collective responsibility when you enter into government and you enter into collective decision-making. In my view, I stick to that—even, in my case, extending it to my coalition friends. If George Eustice did not agree with the decision that was made in relation to either of these agreements, the time to leave the Government and to leave collective responsibility was then, not at a subsequent point when he is on the Back Benches.

The second point to make about him—clearly, he said things that people will say are interesting for the future, not least on the setting of deadlines, while the Government have moved away from that idea—is that the principal argument he made about the risks associated with the agreement and food standards was the risk of the importation of hormone-fed beef. His argument that this was a risk was only because we might subsequently enter into the CPTPP and, under it, we might be subject to an investor state dispute resolution that would force us to dispense with our ban on the import of hormone-fed beef. These are extremely unlikely propositions. As the TAC made absolutely clear, despite the fact that a proportion of beef cattle in Australia are fed hormone growth promoters, none of them—nor their products—may be imported to this country, because we have a ban. So the risk presently does not arise.

[Baroness McIntosh of Pickering (Con)]

That is the heart of the problem—as we will go on to consider in the next set of amendments. Since we left the European Union, there have been no checks at our frontiers to show to what extent the meat coming into this country observes the criteria to which my noble friend referred.

[Lord Lansley (Con)]

My noble friend simply makes the point that the Government should implement the legislation that exists. We have no need to change the legislation to ban the import of hormone-fed beef or the use of hormone growth promoters on beef imported into this country, since the legislation already exists. The point is its implementation—and messing about with this Bill does not change that at all.

I have one final point. As I turn to the CPTPP and sheep farmers, I should say that my sister-in-law is a sheep farmer in north Wales. She may take a view about the New Zealand agreement, principally because of lamb imports, but she has never mentioned it to me. She probably thinks that it is a pretty remote risk compared with the many risks that she has to put up with on a daily basis.

I am UK chair of the UK-Japan 21st Century Group; my noble friend Lord Howell, who is sitting on the Front Bench, was one of my predecessors. My Japanese friends tell me that we are making good progress on our potential accession to the CPTPP. There are clearly issues. In this context, if one were critical of the Government, it would be on the risks associated with the precedent of tariff liberalisation—to the extent that it was offered in these agreements—being used by other counterparties as a basis for their negotiations, not least through the CPTPP. They may seek that in the schedules that they are looking for from us before we are allowed to accede to the CPTPP. Notwithstanding that reservation, in the view of my Japanese friends, other aspects of the negotiations stand a fair chance of being completed in the first half of this year.

On the basis of what the Government have already said about impact assessment and reporting in the future, I think the amendments in this group in particular are not required.

[Lord Kerr of Kinlochard (CB)]

My Lords, I rather agree with the noble Lord, Lord Lansley. There are two points to bear in mind, particularly about the agricultural concern. First, Australia is a very long way away; and, secondly, the big market for Australia and New Zealand is due north of them in East Asia, not over here.

I do not see even the hill farmers in Britain suffering seriously. I do not think that this will be a major target market for Australia and New Zealand. Let us remember the scale. This is a very marginal agreement. It is not a bad deal, but it is certainly not a big deal. It will not change much in our economy; even on the Government’s own estimates of the increase in GDP that might result as a consequence of these two agreements, it is really marginal.

So I am very doubtful about calling for a raft of impact assessments; it seems to me that that is not really necessary. The one amendment that might be necessary is Amendment 18, in the name of the noble Lord, Lord Purvis of Tweed, which takes us back to procurement standards. I can see a case for that, but not for looking sectorally across the agreements and calling for impact assessments in every case.

It would be reassuring if the Government could say something about the non-precedential nature, in their view, of the agricultural agreements with Australia and New Zealand. We read that the Canadians and the Mexicans are pricking up their ears and asking for the same terms that we have given to Australia and New Zealand. Those countries are much closer, and a major target market for both is Europe. If one were to look beyond them to, say, Brazil, Uruguay or Argentina, then I would say that the hill farmers in Britain would have a real reason to be concerned, if the Government were to follow the precedent of their deal with Australia and New Zealand, which is going to come in slowly, over time, and will be pretty marginal in its economic effects. If that were to be applied to trade with Canada, Mexico, Brazil, Uruguay and Argentina, there would be very serious effects on UK agriculture.

What we most need from the Government is not an impact assessment of the effect of the deals that they have done but an undertaking that, since very different considerations would apply, they would do very different deals with other future partners.

Trade (Australia and New Zealand) Bill

Lord Lansley Excerpts

Report stage
Tuesday 14th March 2023 Lords Chamber

Minette Batters, the president of the NFU, finished her speech to the recent NFU conference with a number of issues that she wanted the Government to address, including committing to promoting domestic food production, putting farmers and growers at the heart of our trade policy, guaranteeing our food security and backing British farmers and British food. It is time for the Government to do just this and add these amendments to the Bill to show that they do indeed support British farmers.

[Lord Lansley (Con)]

My Lords, I will intervene briefly. We had a substantial debate in Committee on precisely these issues and I will not repeat the remarks I made then. I remind the House that my sister-in-law is a sheep and beef farmer in north Wales.

For these purposes, I draw attention to the fact that each of these amendments refers to the impact of the procurement chapters—on industry in Amendment 1, on farmers in Amendment 3, and so on. This allows the amendments to come within the Bill’s scope, because the Bill is about only the procurement chapters of the two trade agreements. But because the amendments are within scope and relate only to the procurement chapters, they essentially are pointless, since they do not allow for an impact assessment of the impact on farming; as far as I can tell, the procurement chapters do not impact on farming.

I looked at those chapters; I was a member of the International Agreements Committee, which looked carefully at these two agreements and reported to the House on them. Where New Zealand is concerned, the benefit of the procurement chapter in the short run is modest and principally relates to housing and access to procurement of national parks in New Zealand. Where Australia is concerned, the agreement essentially enables us to access procurements at a sub-federal level, but given the thresholds I am unaware of any likelihood of any significant impact on UK agricultural exports to Australia or vice versa, since these are not necessarily public procurements. The question is whether farmers and agricultural produce from Australia and New Zealand have access to the UK market more generally. All these amendments are pointless in this context since they relate only to the procurement chapters.

I hope we get on with this. When we last spoke, I said that I hoped we might have completed the passage of the Bill by early March. The whole point of the Bill is to enable these chapters to be brought into our domestic legislation and to allow the free trade agreements to be ratified and brought fully into force. I had hoped that we would have done it earlier than this, but thus far we have not.

I have one point on impact assessments, since the purpose is to try to get impact assessments. I still do not understand why those who are asking for these assessments to be made have not recognised that the Trade and Agriculture Commission produced reports last year on each of these free trade agreements. The International Agreements Committee and the International Trade Committee in the other place had commitments from Ministers that there would be a monitoring report every two years and a comprehensive evaluation of the free trade agreement after five years. That seems a perfectly reasonable proposition, so I cannot see that these amendments have either procedural or substantial merit.

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The Government’s rhetoric on some of these agreements is not matched by reality when we know what the direct impact will be. Even at this late stage, therefore, I hope that the Minister will be able to offer some reassurance to our sector.

[Lord Lansley (Con)]

Going back for a moment to the point the noble Lord made earlier about the sale of food to public bodies and these procurement chapters, does he recognise that the purchase of food locally by schools, hospitals and the like will almost certainly not be, as I judge it, within the definition of covered procurement and not above the threshold; and, therefore, the procurement chapters, in so far as they extend procurement opportunities to Australia and New Zealand providers under this Bill—and under the Procurement Bill—really would not be relevant to that local provision of food?

[Lord Purvis of Tweed (LD)]

I am grateful to the noble Lord; he knows I respect his work on this area very much. I would like the Minister to confirm that that will be the case, because I am not convinced. I see the noble Baroness, Lady Neville-Rolfe, in her place. She was kind enough to have a meeting with me about it. I am not yet convinced, because of the elements within the Procurement Bill which will require there to be no discrimination for any of the treaty countries for public procurement in this country, that what he is arguing for, which is effectively a carve-out, will in fact be the case. My understanding is that under the Procurement Bill, we are unable to discriminate against any of the treaty suppliers. I am not sure that a public body in this country would be able to discriminate. I hope the Minister will be able to clarify that point.

The reason this is relevant and why I quoted the then candidate for leader of the Conservative Party’s commitment to 50% of public procurement in this country being local is that I do not know how that squares with what will be the legal requirement under the Procurement Bill that we are then unable to discriminate against Australian and New Zealand produce which will enter the market. I do not know how that squares.

I am simply asking the questions, because we have not had more meat on the bone, if that is not too inappropriate an analogy, about what has been published as a government commitment and is in the Procurement Bill. If the noble Lord has any other answers, I am happy for him to intervene on me. I do not know how he knows how this might be squared. I do not at this moment. That is why part of our agriculture sector is also questioning how these two commitments will come together. The different sequencing of this Bill and the Procurement Bill is relevant. Because it also sets the precedent for Canada and Mexico, with new produce coming in, and if these are gateway agreements for CPTPP, we are looking at potential competition with all CPTPP members for public procurement of produce. If you are a public body in the UK looking at cost-effective procurement of food for schools or hospitals and you are unable under the Procurement Bill to discriminate against Australian or New Zealand produce or that from any CPTPP country and state that there is local producing, similarly, I do not know that it is matched.

I hope that, at this late stage, the Minister can offer some reassurance. I hope that he is able to explain how these commitments to 50% of procurement can be matched, as well as give further reassurances, specifically on the impact on tenant farmers and biodiversity. There are genuine concerns here, I do not think they will go away and we need to offer that reassurance to these sectors, which are so vital to our rural economy.

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[Lord Johnson of Lainston (Con)]

I appreciate the noble Lord’s comments and was about to come on to that when I said “conclusion”. Sadly, my conclusions can run to several topics, the noble Lord’s being one of them.

It is correct that the procurement legislation prohibits a nationalist tilt towards procurement, which is what we want. When it comes to government procurement, we want the highest quality products at the lowest possible prices, and I would like to think that they will be British products. It will reassure this House to know that 81% of all beef sold in this country is under British brand labels. Only 19% international beef is sold in this country in the first place. The assumption is that you are already looking at a very high level of local procurement. A 50% threshold would be logical for something such as beef, which already fits into that.

There is a further question and further investigation regarding whether procurement can be assessed in terms of other relevant factors. I am happy to have a further debate about that in general. It can apply to a wide range of concepts. It could even apply to how energy is sourced and supplied. There is always work defining what concepts such as sustainability or relevance to the environment could be in terms of transportation distances and so on. They are discussions to have. I have been having discussions in other areas, for reasons not linked to these trade discussions, on whether these factors can be brought to bear in procurement. We are very wary of introducing anything other than straightforward procurement rules, but I assure the noble Lord that—as with beef, where 81% is already UK beef—it would seem logical that a very high proportion of produce is sourced locally.

[Lord Lansley (Con)]

At the risk of delaying us on this point, the access that is given through these procurement chapters and for treaty state suppliers under the Procurement Bill is to cover procurement, which means procurements larger than the threshold amounts set out in the schedule to the Procurement Bill. For example, for local food production for a set of schools, this would have to be a procurement over £213,000. In truth, the issue is not whether there is an Australian company that is likely to bid for such a procurement, because these procurements will be smaller than that. It is whether beef from Australia is in this country and in circulation in their market which might then be used by local suppliers—but then they are a local supplier to the school.

[Lord Johnson of Lainston (Con)]

I have appreciated my noble friend’s extremely positive interventions and applaud wholeheartedly his phrase, “Let’s get on with it.” He has also been extremely helpful in pointing out the specifics of the Bill and the difficulty of attaching these sorts of amendments to it, although I am very sympathetic to the overall philosophy of the desire for proper impact assessments, which we have had and agree to wholeheartedly in terms of the two-year and the five-year monitoring report. I stress again that this treaty does not create a precedent. However, it does create a model. I am very impressed and support wholeheartedly the flexibility of this agreement because it will allow us and allow noble Lords to call Ministers to account on a constant and rolling basis concerning the effectiveness of these trade treaties.

I believe that I have covered most of the points raised. I am very happy to continue a dialogue around these and any other measures that may not have been covered on this important piece of legislation. We believe, and I believe passionately, that this trade Bill is a good thing for this country. It will be of huge benefit to our citizens and our consumers. It will give us enormous additional security and allow us to have a closer relationship with two nations that have been, since their founding, sister nations of this country.

I am continually being asked by the representatives of Australia and New Zealand when this treaty will come into force because, as soon as it does, and only then, their businesses and citizens, and ours, will be able to take advantage of it. I call on this House to support the Government in this mission. I ask the noble Lord, Lord Lennie, to withdraw his amendment, and for the noble Baroness, Lady McIntosh, and the noble Lord, Lord Purvis, not to move theirs.

Trade (Australia and New Zealand) Bill

Lord Lansley Excerpts

3rd reading
Monday 20th March 2023 Lords Chamber

[Lord Johnson of Lainston (Con)]

I greatly appreciate noble Lords’ comments. I think I was so keen to get this Bill through that I slightly jumped the gun. I apologise to those noble Lords who were waiting to speak. I greatly appreciate the personal comments towards my own enthusiasm. I have hugely enjoyed the process of working with so many noble Lords in the first of what I hope will be a series of very exciting, exhilarating and profitable trade deals for the whole of the UK.

I have always been very specific, as have the Government, that this is a journey. We are very keen to hear how we can engage better. It is absolutely in the interests of the Government and these trade deals that there is a broad consensus around their power and effect to elevate our economy to new heights; otherwise, we will not be able to broadcast the ramifications and specifics of the trade deals to the country and people will not take advantage of them. Personally, I am continuing to engage at all possible points.

I am delighted to answer a few of the questions. In terms of the committee resourcing, I will certainly take that away. I thank the noble Lord, Lord Howell, for raising that. The IAC under the noble Baroness, Lady Hayter, has done a very good job. A number of noble Lords have spoken to that today and during the debate. It is certainly worth making sure we have the resources in this House to ensure we are scrutinising according to the appropriate CRaG process.

The noble Lord touched on the consent issues. They have clearly been an important feature of the debates around these trade deals. It does not necessarily look like we have resolved them for future trade deals. However, as the noble Lord rightly said, these are reserved powers. If you consult your Walter Bagehot, as I did over the weekend, he makes it very clear and is absolutely right that the Executive should be making treaties and be given the freedom of rein to implement them across the entire United Kingdom.

Having said that, we have made huge efforts to consult and engage with the devolved nations. I personally made extra efforts, which I would not describe as effort at all but part of a necessary process of good governance and communication, to ensure that devolved nations felt that they had a way in to this process. It is absolutely confirmed that our negotiators spend a great deal of time with officials from all parts of the United Kingdom to make sure that their views are fed in. This reflects on the sort of trade we are trying to do in terms of the specific industries of these nations. We are one United Kingdom, and our power in negotiating global trade deals comes from that fact. It would be a great mistake to try to abrogate that for any reason. Having said that, consultation and communication are paramount to us, and I personally commit to them.

[Lord Lansley (Con)]

Will my noble friend confirm that the Bill is about incorporating into domestic legislation the procurement provisions and chapters of the treaty? Although treaty making may be a reserved power, the implementation of the procurement-related legislation reflects directly on devolved matters. That is why consent should have been provided by the devolved Administrations.

[Lord Johnson of Lainston (Con)]

I thank my noble friend for that comment. I do not believe that is necessarily the case, in the sense that this is a procurement Bill relating to a trade deal, so it is right that concurrent powers can be initiated. I believe that is the case. That is certainly how we have operated on the premise of this Bill.

We wanted to gain consent because that is good practice, but, as I say, we focused on consultation and communication, which has achieved the same goal. The whole point of this Bill and the trade deal it underpins is that it will lead to greater trade, more commerce and economic activity and greater wealth creation for the entire UK, which we should celebrate.

If I may come to a conclusion, I thank noble Lords for their extremely helpful scrutiny. I was glad to hear the noble Lord, Lord Kerr, mentioned. It proves the power and point of this Chamber. Any of the body politic who discuss significant revision of the powers of this Chamber should think very carefully about the actions taken on this Bill. Through the scrutiny of this House and the participation of individual Members, we have been able to draft a more effective Bill and draft it correctly, for which I am extremely grateful. I am very excited about the opportunities that the Australia and New Zealand trade deal will give us, our citizens and this nation. With that, I beg to move.