Trade (Australia and New Zealand) Bill

Mark Garnier Excerpts

2nd reading
Tuesday 6th September 2022 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

I thank the shadow Secretary of State for International Trade, the right hon. Member for Torfaen (Nick Thomas-Symonds), for his speech. Broadly speaking, I agree with a great deal of what he said—although not everything—and I think that his speech will probably set the tone for this debate, which is less about the content of the trade deal and more about the process of scrutiny of it. As a member of the International Trade Committee, I have been heavily involved in the process. It is no easy job to consider several tens of thousands, if not hundreds of thousands, of pages of detailed documentation. The abridged version comes to eight volumes, so it is quite a challenge.

As a basic principle, I very much welcome the fact that we have signed these two trade deals. It is absolutely fantastic that, having got Brexit done, we are now delivering what Brexit has to offer. However, there will be an interesting argument, perhaps in relation to some of our constituents, that having taken back sovereignty from the European Union, we cede a bit of sovereignty every time we sign a trade deal with other countries around the world. That illustrates the point that we have taken back control from the EU, but we will give a bit of control to the CPTPP or the GCC. That is an interesting debate, but it is not what we will talk about today.

The trade deals are good. As we heard from the Secretary of State, on the Australian side, there will be an increase of £2.3 billion in economic activity, with increased income of £900 million to people working who benefit from it. As for New Zealand, there will be an increase in economic activity of £800 million, with increased income of £200 million for people working in the relevant sectors.

These two trade deals are incredibly important, because they are the first trade deals that we have signed ab initio since leaving the EU. All the trade deals that we have done until now have been roll-over trade deals, aside from the Japanese trade deal, which was a quasi-roll-over deal. When we were leaving the EU, it was incredibly important in the Department for International Trade—having been a Minister in that Department, I was very aware of what was going on—that we did not interrupt trade with all those countries around the world. That is why the shadow Secretary of State is right to say that they were cut-and-paste deals, because their objective was to not interrupt trade. I suspect that we will come back to some of the trade deals and renegotiate them, so that we get better outcomes for UK businesses.

[Anthony Mangnall]

I think that my hon. Friend and I met when the South Korean Trade Minister came to speak to members of the International Trade Committee. He said that the benefit of the roll-over trade agreement that the UK has with South Korea was that we could look to improve it. Indeed, South Korea had sent a letter to the Department for International Trade in August last year and it received a response shortly afterwards in September, and discussions were already under way in the Department, whereas the letter that it sent to the EU warranted no response. The roll-over deals already provide the opportunity to improve on them and, in the case of South Korea, that is happening. Does my hon. Friend think that that is what the Opposition should look at when it comes to trade agreements and roll-overs having real value?

[Mark Garnier]

Yes, I agree. It is incredibly important that we have a basis on which we can improve and that is absolutely the case. We would not be able to improve on these deals if we did not have them in the first place.

The Japan deal was a relatively easy one to scrutinise, because it was basically about looking at whether we had secured better terms than the European Union, based on the fact that we all started at the same time with that deal. It was a cut-and-paste deal with added lines, but the important point is that it was a modification of a roll-over deal.

These two deals are massively important, because there are two fundamental things that we need to consider. First, what are the UK Government’s negotiating objectives? We have never really understood what they are. A number of documents have laid out bits and pieces here and there, but there has never been a cohesive document to tell us what we are negotiating against or how we are doing relative to the outcome that we want.

The second important point is that this is the very first time that we are looking at the process of ratifying a trade deal, and it falls short of what we really need. I welcome this debate, which is an incredibly important one, but it is not the debate that we should be having. This is a debate about enabling certain legislation to ensure that the trade deal goes ahead. The Opposition have already said that they will support the Bill, but in the unlikely event that the Bill did not pass, that would leave us in breach of our international obligations under the trade deal. The trade deal has happened, so we would now be in trouble if we did not pass the Bill. It is incredibly important that we understand that this is an enabling Bill; it is not about how we scrutinise the deal itself.

[Lloyd Russell-Moyle]

The hon. Gentleman highlights the point that we have passed CRaG before passing the enabling legislation, which is quite an unusual thing to do; normally in this country we pass enabling legislation and then ratify treaties. Does he think that perhaps the Government should have done things in a different order to ensure that the right scrutiny would happen and that there would be no risk, not even a minuscule one, of our breaching international agreements?

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[Mark Garnier]

My International Trade Committee colleague gives me a fantastic prompt for the next part of my speech, which is about that part of the CRaG process. The CRaG process allows 21 days in which Parliament can hold up the process of ratification of the trade deal. In the lead-up to the recess, the International Trade Committee was desperate to get more scrutiny. We went out and spoke to huge numbers of interested parties such as the NFU, we read countless pages of written submissions, we heard from experts and all sorts of people, and we went through the whole thing, but it was not until the final days before the recess that we heard from any Ministers.

The Secretary of State, to her absolute credit, came and spent some five or six hours giving evidence to the International Trade Committee, but it was too late for the Committee to publish a full report or get a debate in Parliament. My hon. Friend the Member for Totnes (Anthony Mangnall) went to huge efforts to secure a debate on the two trade deals in order to hold back, if necessary, the ratification by 21 days under the CRaG process. We even applied to Mr Speaker for a debate under Standing Order No. 24, but unfortunately that debate was not allowed.

That means that the CRaG process is completely meaningless. If we cannot get a debate in Parliament, there is no way under the CRaG process to hold up—admittedly only by 21 days—the ratification of the deal. We cannot extend the process of scrutiny to get better scrutiny of the deals. That is a real problem, not just for these trade deals, but for Parliament and for its ability to scrutinise the Government properly under the CRaG process.

This is an incredibly important debate, because Parliament is an institution that learns by its mistakes, and we have made a lot of mistakes in the process of scrutinising these trade deals. We cannot afford to continue making mistakes. I am very disappointed by what has happened.

[Angus Brendan MacNeil]

I pay tribute to the hon. Gentleman: if people are not paying attention in their offices or wherever, what he says is a very gentle reminder to the Government and to Government Members that things could have been done better. He and I see scrutiny from very different political angles, but the point, which he makes eloquently and well, is that the scrutiny could have been far better than it is. I share his frustration, as do the hon. Members for Totnes (Anthony Mangnall) and for Brighton, Kemptown (Lloyd Russell-Moyle)—we are all utterly frustrated. I praise him as a parliamentarian: he is in perfect flow and is doing an excellent job. This is a very important point, and I hope that Parliament will listen, because it comes from all sides and it probably comes best from him.

[Mark Garnier]

I thank the Chairman of the Select Committee for his kind words. In the spirit of collaboration, I think there is an opportunity for us all to work together. The Department for International Trade has reached out to us, and we have a visit to the parliamentary team coming up in the next couple of weeks.

There is a problem somewhere, but we are not too sure what it is. I was a Minister in the Department, and I found that the civil servants we worked with were second to none. As one of the Prime Minister’s international trade envoys—I believe I am on my fourth Prime Minister as a trade envoy—I continue to work with civil servants in the Department. It is important that we get this right. My experience with the Secretary of State is that she has been incredibly generous with her time and has been very engaging. I believe in her sincerity in trying to move things forward, but something fundamental has gone wrong with the interaction between the International Trade Committee and the Department. I do not know what it is, but we need to find out.

Something has also gone wrong with the process of scrutiny of international trade deals and with the CRaG process, so I urge the House to think hard about how to ensure that they run smoothly. At the end of the day, we have left the European Union and we ain’t going back. These are exactly the opportunities that are presented to this country. We must get this right. We must take advantage of global Britain.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the SNP spokesperson.

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[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

It is a great pleasure to follow the hon. Member for Mole Valley (Sir Paul Beresford). Despite my attempts to be a second-hand car salesman and flog a 1954 Morris Minor, the real reason I am here is not to turn the Chamber into a car showroom but to speak as Chair of the International Trade Committee. Before I say too much more on that, though, I can confirm, following the Antipodean mentions of Dunedin, a city of 117,000 souls, that it is indeed the Gaelic for Edinburgh; I am glad that the hon. Gentleman mentioned that. To reciprocate on his awareness of Scotland, let me say that Mole Valley is important to many crofters, because online shopping for many medicines is done at Mole Valley Farmers—that is a wee punt in his direction as well.

While I am throwing compliments about, let me praise the shadow spokesman, the right hon. Member for Torfaen (Nick Thomas-Symonds), for reading our report on the Australian trade agreement. It is a gripping read, and I have good news for him: a next instalment is coming out on New Zealand fairly soon. I am sure that he is looking forward to that and that all of us on the Committee will gladly sign a copy for him just to make that an extra special experience for him. I can see nods. [Interruption.] Some are looking for a paperback version; there is a cheapskate from Northern Ireland at the back there, But it is good that that has been read. While I am in salesman mode, let me say to those who are into trade agreements and looking for good-quality information tomorrow that we have our meeting on the comprehensive and progressive agreement for trans-Pacific partnership at 10 o’clock. The exact Committee Room escapes me—

[Mark Garnier]

Committee Room 16.

[Angus Brendan MacNeil]

I thank my colleague very much for that.

I was reminded of something by what the hon. Member for Mole Valley said about the size of farming in New Zealand and the Scots exiles. I met a man named Andrew Morrison, who is from his part of the world, but originally from mine—his ancestors came from my constituency—and we talked about sheep, because he had sheep. I told him that I had 32 to 33 breeding ewes, depending on the year. He looked at me and said that he had 26, and there was a big pause. My chest was going out during the pause but, unfortunately, he went on to say, “Thousand”. So the hon. Gentleman is indeed right to say that the scale of agricultural production is massively different there.

We are here today to talk about these trade agreements and the legislation that is going forward. Trade agreements, on the whole, are to be welcomed. They are clawing back GDP that was lost by Brexit, although the Government figures do not say that. There are many nuances, and I will come to those by the end of my remarks, but I wish to start with the broad brush by asking why we are doing this. Surely we are doing this for our economic benefit and gain. We have then to set that in the context that the Government are doing it because Brexit is a damaging event to GDP, by up to about 5%.

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[Angus Brendan MacNeil]

The hon. Gentleman is a very fine member of my Committee, if not the finest, bearing in mind that there are at least two fine members in front of me. He is right that the modelling can be wrong, but it is not usually out by £492 to £500. It may be out by £2 or £3. I caution him that if those models say that the outcome could be better, the flipside is that Brexit could be worse than the 5% that has been modelled using the same sort of criteria. I hope it is not. I would rather the optimistic side, but let us be aware that this thing can go either way.

We are often told that there are winners and losers in these trade deals. We have certainly identified losers today, including the crofter I alluded to. Certain losses are hitting agriculture. I decided as Chair of the International Trade Committee to write to the Australian high commission to ask if it could identify some losers in Australia we could speak to. It wrote back and told us that everyone was a winner in Australia and nobody at all was a loser. We set that in the context of the figures that were mentioned earlier for Australia and New Zealand. For New Zealand alone, agriculture, forestry and fishing will lose between £48 million and £97 million.

The chair of the Trade and Agriculture Commission Professor Lorand Bartels told us:

“I cannot think of another country that has significant agricultural production— so not the Hong Kongs or the Singapores of this world—liberalising fully in agriculture, even over what is almost a generation. … That is unusual.”

So the UK has done something very unusual here in opening up. It comes back to the point about free trade that was mentioned earlier. None of this is free trade. It is trade that still has restrictions. Rather than paying a tariff, now you need the paperwork. As people have found, paperwork itself is quite costly.

I am reminded of the man in the weekend paper—the brewer, I think from Kent. He had lost a large part of his £600,000 export market for beer to the European Union. It has now become a £2,000 market. He has lost 99.7% of his exports. He is now not exporting and cannot export to any country in the world. When he exports to the European Union, he is going to need paperwork, and the paperwork costs him. It is a hurdle to 99.7% of his trade.

[Mark Garnier]

On the question of farmers and agricultural producers here in the UK, the hon. Gentleman makes an important point. He says that there is an increased risk to those agricultural producers, but the one thing that has not come up in the debate so far is consumer choice. It is an interesting point. Ultimately, we have to look after our farmers—that is incredibly important—but we also have many constituents who may well feel slightly aggrieved that we are restricting the amount of food that can be brought in, which means people having to pay more Waitrose prices. Would it not be all right to get Kentucky Fried Chicken that comes from Kentucky?

[Angus Brendan MacNeil]

Absolutely. This is the tension that there has always been in trade policy over the years—do you abandon your countryside and rural places? I use stark words deliberately, but it is a sliding scale between various points. Political judgments are made for various reasons, and people will come down on one side or the other. I do not belittle what the hon. Gentleman says, and is important that we recognise that spectrum. I am sure that he can argue the other way as well if he chooses. He is presumably making a devil’s advocate point or giving perhaps a strongly held viewpoint. It is a good point, but it is a point of debate. That is what we are here to do—to enlighten and illuminate that debate.