Brexit: Agriculture and Farm Animal Welfare (European Union Committee Report)

Lord Whitty Excerpts

Tuesday 17th October 2017 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I congratulate the noble Lords, Lord Teverson and Lord Curry, and the other members of the committee. It is a very effective report. We speak in a week when we have had two quite bad pieces of news. The first is that the Agriculture and Horticulture Development Board has produced a fairly well-based report on its expectations for various scenarios as the outcome of Brexit. They list three: evolution, which is, broadly speaking, the Chancellor of the Exchequer’s preferred outcome; unilateral liberalism, which I presume is Liam Fox’s preferred outcome; and fortress Britain, which, I presume from his remarks this week, is Chris Grayling’s preferred outcome. Whatever the origins of those broad-brush outcomes, the conclusion is that in the last two, there will be dramatic falls in farm income in almost all sectors and for almost all farms. In the first scenario, which is broadly the status quo—through a free trade agreement—farm incomes will be kept up only if the level of subsidy from the UK Government keeps pace with what would otherwise have been the European payouts. In all three scenarios there is a presumption that consumer prices will increase, which may be interesting for some theorists. As the noble Lord, Lord Curry, says, we have an opportunity to redevelop and bring in a different British agricultural policy, replacing the 40-odd years of the CAP. Michael Gove has a serious challenge.

We have to see any new agricultural policy in the broadest possible terms. As a bit of history, the CAP was first conceived not simply as a protectionist food policy—although it was always that—but as a regional, rural and social policy. In effect, it was avoiding for the rural areas of France and Italy the kind of depopulation and rural poverty which in the previous century had hit other economies such as those of Ireland and Scotland, and which in the current century is hitting many Asian economies with rural depopulation and poverty. The CAP has always had multiple outputs.

Therefore, we need a wide range of objectives—public goods, as the noble Baroness, Lady Miller, calls them—for any new system: support for the wider rural economy and society, and the rural environment; support for land and water management; and the preservation and enhancement of our natural capital. The answer will be different in different parts of the country, and it will be different in different English regions. However, there are political problems with the fact that they will be very different in different parts of the devolved Administrations. If what has hitherto been the Brussels input to agricultural policy is simply centralised in Whitehall, there will be quite serious problems with the devolved Administrations. We need an all-UK approach to this, but it will be difficult to achieve without causing grave difficulties for the devolution settlement.

Just this week, Carwyn Jones, the First Minister of Wales—who was my oppo in Wales when I was Agriculture Minister and he was in Cardiff—has pointed out that certain trade outcomes and regulatory outcomes could completely wipe out hill farming in Wales. That would be a disaster, not just for Wales but for the whole country. There will also be serious problems in Scotland and Northern Ireland. In the latter, it is greatly compounded by areas covered by previous reports from the Select Committee with regard to the Irish trade and the dominance of the north-south arrangements. Goods which end up as consumer goods finally cross the border several times, and the Irish economy, both north and south, depends heavily on exports to the UK, and via the UK to the EU.

My second main point is on trade. The noble Lord, Lord Teverson, already reported on this week’s row on trade quotas. This is a situation in which, quietly, EU, UK and WTO officials were seeing a way forward. Almost immediately after that became semi-public knowledge, it was objected to by other countries, with which some hope we will reach very detailed free trade agreements in the near future. This proves a number of things. First, we do not have that many friends out there. However, it also proves that if agricultural quotas are not settled, it will be very difficult to deliver a whole-scale free-trade agreement with Europe and, beyond Europe, with other countries. Unless agricultural quotas are settled, because agriculture is such an important aspect of the European Union, reaching an agreement on other trade arrangements with Europe will be more difficult. When we come to negotiate the other agreements that people have in mind, unless we have settled that, they will not know what their quotas will be, whether they have an arrangement for a free-trade agreement with Europe already—in which case there are quotas referred to there—or if they can trade with Europe free of quotas but facing tariffs.

It is in fact worse than that. Historically, any agreement on trade has floundered heavily on failure to agree, under the WTO or whatever, and under GATT before it, on agricultural quotas and the reflection of the level of subsidy—the amber box subsidies—in any trade negotiations. The latest example of that, only 10 years ago, was the almost complete failure of the Doha round, principally because we could not agree multilaterally on trade quotas and trade subsidies for agriculture.

Agriculture therefore has implications way beyond its own importance within our economy, our society and our countryside. Unless we manage to resolve with our European partners and beyond the way in which we treat trade in agriculture, we will not get free trade agreements anywhere.