Trade (Australia and New Zealand) Bill

Lord Lennie Excerpts

Report stage
Tuesday 14th March 2023 Lords Chamber

Moved by

[Lord Lennie]

1: Clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before completion of a review by the Trade and Agriculture Commission of the potential impact of the procurement Chapters on industry in the United Kingdom.”Member’s explanatory statement
Requires a review by the TAC before regulations implementing the procurement Chapters can be made.

[Lord Lennie (Lab)]

My Lords, I have two amendments in this group, Amendments 1 and 6. I was thinking that the noble Lord, Lord Purvis, would be here, but maybe the noble Lord, Lord Teverson, will cover for him in his absence—he may arrive while I am speaking, who knows?

I begin by thanking the Minister both for being available between Committee and Report and for facilitating a meeting with Mr Phil Goff, the New Zealand high commissioner in the UK earlier in the Bill’s passage; both were very helpful indeed. Amendment 1 would require a review by the Trade and Agriculture Commission, the TAC, before regulations implementing the procurement chapters can be made. The TAC, as we know, is the independent committee of expert specialists in a number of fields—animal and plant health; animal welfare; environmental standards and so on. Its role is to scrutinise a new free trade agreement once it is signed and to inform Parliament whether measures in the new free trade agreement are consistent with UK levels of statutory protection. The noble Lord, Lord Purvis, has arrived.

Last year, the then Secretary of State for International Trade, Anne-Marie Trevelyan, received confirmation that the Australia and New Zealand trade deals were indeed within that consistency, so one might wonder why we are putting down this amendment. It is not to score political points, or to attack the Government, but to ask TAC to consider the procurement chapters of these two free trade agreements. The TAC would need to be fine-tuned to do this by importing necessary expertise. In Committee in the other place, representatives of TAC agreed that it is only as strong or as weak as the parliamentary scrutiny process around it. We can see no reason to limit it to the agricultural aspects of agreements and not to extend TAC to look at procurement as well. Incidentally, it is regrettable that TAC’s role is limited to post the signing of deals, but that is not the concern of this amendment.

Amendment 6 would require an impact assessment of regulations made under Schedule 1 within 12 months, and every three years thereafter. These trade deals are not short-term, one-off deals: while predictions can be made in advance, they are generally vague or broad and wide of the mark, so impact assessments would consider what the actual situation is after time has passed, to better inform the future, and on a rolling basis. This would provide insight into the effect of these deals and help us learn lessons for the future. Whether the Government like it or not—I think they do not like it—these agreements set precedents for future trade deals. A number of concerns have been raised about these deals and it would be sensible to keep them under formal review and readjust expectations as we gain more knowledge. For example, on employment rights, the TUC has commented that the agreements do not contain commitments to ILO core conventions, and an obligation for both parties to ratify and respect those agreements.

On climate change, it is deeply concerning that vital commitments made to this House on climate change in regard to the Australian deal are not being upheld. Alok Sharma MP, COP 26 president, said on 1 December 2021, that the Australia deal

“reaffirms both parties’ commitments to upholding our obligations under the Paris agreement, including limiting global warming to 1.5°.”—[Official Report, Commons, 1/12/21; col. 903]

This final agreement does not uphold that important commitment. In other areas too—the NHS, small businesses, regions and particularly animal welfare, which I think the noble Lord, Lord Purvis, will speak about in a minute—there are further problems. So, an impact assessment set against these concerns would be very helpful to assess the deals and prepare the UK for future negotiations. I beg to move.

[Baroness McIntosh of Pickering (Con)]

I am delighted to follow the noble Lord, and I shall speak to Amendment 3 in my name. I congratulate my noble friend the Minister for the close interest he has taken in listening to my concerns—most recently in a phone call on Sunday evening. I apologise for intruding on his weekend.

My concerns in the background, and my reason for tabling Amendment 3 at this stage, are twofold. One, as the noble Lord opposite alluded to, is the need for an impact assessment, particularly looking at the impact of implementing the procurement chapters of these free trade agreements with Australia and New Zealand. What will the impact be on farmers, and indeed on the market for food within the United Kingdom, particularly in relation to lamb and beef? Secondly, in relation to the impact on the market for food, the impact assessment I am calling for must consider the production and food safety standards.

I am trying to impress upon my noble friend and the Government the plight of upland hill farmers, many of whom are tenanted farmers. I am most familiar with those based in North Yorkshire, where I had the honour to represent two different constituencies for a total of 18 years; I grew up in the Pennines in County Durham. Peculiar to those areas of the north of England is that perhaps 50% of the farms are tenanted. They also have very poor land but it does lend itself to grazing, and over the years they have done this extremely well. Therefore, they have thrived through our membership of the European Union and, most recently, the Basic Payment Scheme, through spring lambs and fat-store cattle.

I was particularly concerned to see in an article dated 5 March that it is estimated that in this financial year alone, the typical grazing livestock farm in the English uplands faces a drop in farm business net profit income of almost two thirds, to approximately £16,300. I would like to pay tribute to the work of Julia Aglionby, professor of practice at the University of Cumbria’s Centre for National Parks and Protected Areas. She predicts that the income will recover slightly to almost £23,000 over two years, before slumping back to £16,700. The ballpark figure is going to be between £16,300 and £16,700.

On that basis, the NFU fears that it is not going to be cost effective, as we move from the Basic Payment Scheme to payments for environmental and public goods, for farmers to farm in the uplands, certainly in the north of England, with which I am most familiar. So, they face a drop in farm income. Coupled with that is what I see as unfair competition and the lack of a level playing field. My noble friend Lord Inglewood will remember from our days in the European Parliament this elusive level playing field that we thought we would obtain at some stage in the European Union; it never happened, but I see it becoming more and more elusive as we go forward.

So, the purpose of this amendment is to look at how we can ensure, through proposed new subsection (2) of Amendment 3, that our standards of food production and safety will be met going forward. The NFU is concerned that there are no enduring safeguard mechanisms —that the mechanisms in place are for up to a maximum of 15 years.

I would like my noble friend the Minister to acknowledge when he sums up that, in its impact assessments for the two agreements, the Department for Business and Trade has modelled agriculture, forestry, fishing and semi-processed foods, which include the beef and sheep meat sectors, and these are estimated to see a fall of 0.35% in one agreement, and a minus 1.16% reduction in gross value added, respectively, relative to the base line, over the long run as a result of the FTA. We have to accept that some farmers will take the view that we are doing a deal with the devil.

Australia and New Zealand are very good producers of food. They have large tracts of land on which to produce their food, and they are going to come after our markets very aggressively. Regarding my noble friend’s department’s impact assessment, I accept there may be other areas under these agreements that may benefit, such as automobiles and whisky—which is close to my heart, coming as I do from Scotland—but I am here to argue for the plight of the hill farmer and the upland farmer, who are feeling very beleaguered as we speak.

Another source of concern that I hope my noble friend will address is how these imports are going to meet my test under proposed new subsection (2) in Amendment 3. I have had a note from the Food Standards Agency concerning the percentage of food coming into the UK from third countries, including EU countries, as “checked at port or point of entry”. As we will recall, imports from the EU, which may include Brazilian, Australian and New Zealand imports, have been temporarily suspended at our borders; I think they are due to be phased in toward the end of this year. But imports from Australia and New Zealand through the EU are not being checked at our borders at the moment.

What is concerning me more is that all imported high-risk food and feed from non-EU countries is subject to control at our borders. This includes 100% documentary checks to ensure that the consignment originates from both a country and establishments that are approved to export to this country, and food and feed safety assurances contained with the Export Health Certificate have been correctly completed, meeting our safety requirements. Additional identity and physical checks will be carried out, and the frequency of such checks vary between—if the figures are correct—1% and 30%.

The FSA says that typically, meat and dairy products fall into the 30% frequency, while fish and fish products fall into the 15% frequency, and highly refined products of animal origin fall into the 1% frequency. Lamb and beef fall within the 30% checks, so we are taking an awful lot on trust at our borders from non-EU countries —an example being Australian and New Zealand meat imports—under the terms of a free trade agreement.

The final thought I would like to leave my noble friend with is that the checks undertaken by local authorities in England are a sort of last-chance saloon; at the moment they are patchy, and I hope that enough resources will be made available to them. Those are my main concerns. This is yet another agreement which is asymmetrical in nature, and we are doing a deal which is going to be far more in the interests of Australian and New Zealand farmers than our own. Unlike other free trade agreements, it does not allow for a safeguard measure, so it is putting our own producers of meat, particularly lamb and beef, at risk. It also lays us open, both as domestic producers and consumers, to substandard foods coming in.

Those are the concerns that lie behind Amendment 3, and I very much look forward to hearing some reassurance from my noble friend when he comes to respond.

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[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.

[Lord Lennie (Lab)]

The TAC covering procurement seems to be a future possibility, and I welcome the Minister’s comments on it. On the questions of food standards and quality assurance that noble Lords have raised, we will wait and see. We will have a review in two years and a conclusion to that in five years, and we will find out whether the assurances that we seek on food standards have been maintained. I do not think that there is any doubt about this being a gateway agreement: it is clearly to do with the CPTPP. The impact assessment that we are calling for is a one-off. This is the first time that we have negotiated a trade deal for some 45 years. To make sure that we have covered all the bases and got things right, we thought that a review—rather more frequently than the five years offered—would have been better. I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

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[Lord Johnson of Lainston (Con)]

My Lords, Amendment 2, in my name, is a minor and technical amendment that has been tabled by the Government to correct a typographical error in the Bill and clarify the power available to Ministers of the Crown or a devolved Administration under Clause 1. I am very grateful for noble Lords’ scrutiny, which was instrumental in highlighting this typographical error in the Bill. In particular, I thank the noble Lord, Lord Kerr, who is not in his usual place, and my noble friend Lady McIntosh, for highlighting this issue in Committee. If I may say so, their laser focus on detail in the Bill shows the real value of your Lordships’ House in ensuring that legislation is as robust and clear as possible. The Government are very grateful to noble Lords for highlighting this issue. I beg to move.

[Lord Lennie (Lab)]

There is nothing to say; we agree.

Amendment 2 agreed.

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Moved by

[Lord Lennie]

7: Clause 4, page 3, line 4, at end insert—
“(2A) This Act expires at the end of the period of two years beginning with the day on which it is passed.”Member's explanatory statement
Adds a sunset Clause to the legislation.

--- Later in debate ---

[Lord Lennie (Lab)]

I rise briefly to speak to Amendments 7 and 8 in this group. These two amendments would sunset the ability to make amendments to two years after the law passes or the UK’s accession to the CPTPP. Incidentally, the Government previously said that accession would happen last year, but, as I am sure we are aware, it has not yet taken place.

The Explanatory Notes to these deals state that each party to the free trade agreement should ensure that its domestic legislative framework is consistent with the obligations in the FTA. The UK-Australia and UK-New Zealand free trade agreements require changes to domestic procurement law. Therefore, why not have sunset powers in the legislation? Is there any expectation that achieving this intention would take more than two years, and are there concerns that constant updates would be required for whatever reason? If so, would it be right to do so for more than two years in any event? If accession to the CPTPP will change our trade relationship with Australia and New Zealand, will a domestic legislative framework need to be updated in a manner not possible within the powers in the Bill so that it is aligned with the CPTPP and these deals if they are to coexist? A series of trade experts have commented that the UK will be a rule-taker, not a rule-maker, when we join the CPTPP. The Minister may perhaps wish to comment on this interplay between the Australia and New Zealand trade deals and the CPTPP. I beg to move.

[Lord Johnson of Lainston (Con)]

My Lords, I turn to Amendment 8 specifically, which seeks for the Bill to lapse when the UK joins the CPTPP. Bilateral free trade agreements, such as these signed with Australia and New Zealand, do not lapse due to membership of plurilateral agreements such as the CPTPP and the WTO Agreement on Government Procurement. They exist alongside each other—that is important to note—with the UK having separate and continuing commitments under each. This is already the case with the numerous bilateral trade agreements that the UK has with members of the GPA, such as Canada, Switzerland, the Republic of Korea, the EU and Ukraine, to name a few.

I emphasise that the procurement chapters of the Australia and New Zealand agreements will not be superseded by the UK’s accession to the CPTPP. Accordingly, the power in the Bill will still be needed when the UK has acceded to the CPTPP, to implement future modifications to the Australia and New Zealand agreements. In light of this, I ask for the amendment to be withdrawn.

[Lord Lennie (Lab)]

I beg leave to withdraw the amendment.

Amendment 7 withdrawn.