Trade (Australia and New Zealand) Bill

Mark Hendrick Excerpts

2nd reading
Tuesday 6th September 2022 Commons Chamber

[Mr Djanogly]

I think it is because there are many people in this world, including myself, who fundamentally believe that the starting point should be free trade and that the peoples of the world improve their lot generally by having free trade.

In any event, we are facing a revolution in the meat sector and it is looking increasingly likely that within 15 years cultured meat will have almost replaced low-value minced meat, chicken and pork. Furthermore, I think it unlikely that UK producers of pricey high-end meat products, particularly ones selling to local markets with strong local followings, need to fear Australian meat imports.

[Sir Mark Hendrick (Preston) (Lab/Co-op)]

The hon. Gentleman is putting a very brave face on this. Many commentators in the agricultural communities in this country see it far more negatively than he does. I take his point about the 15 years. The agreement will be phased in over 15 years. Many of them see this as a car crash in slow motion. If the hon. Gentleman had argued that the agreement was good for free trade reasons, fine. The minuscule GDP gain from it has been accepted. I see the most positive thing about it as access to the CPTPP, which will be coming on stream. Britain aims in the longer future to join that organisation, which I am sure he will agree is a good thing in itself. That begs the question that, if we can do that why not—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Interventions, by their very nature, should be short.

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[Sarah Green]

I thank the hon. Gentleman for his intervention; I think we are in agreement. In fact, I agree with the International Trade Committee that we need transparency on the real impact of these new trade deals and the Government to publish a full assessment of the winners and losers across all economic sectors and the nations of the UK.

There are also serious questions to answer about how this Bill will prevent cheaper and lower-quality food products from flooding the UK market, threatening our agriculture and food safety. The Government must outline how they will monitor the impact of that and what action they will take to minimise any damage done to UK business.

The trade-boosting deals promised by the Government have not yet become a reality. The impact assessment of the agreement with New Zealand shows only a 0.03% increase in GVA for the south-east. My constituents in Chesham and Amersham will see next to no benefits from the deals this Bill facilitates.

[Sir Mark Hendrick]

I agree with the general drift of the hon. Lady’s speech—it is very good indeed, and I agree with most things. There has been emphasis on the regional devolved Governments, but that applies to England as a whole as well. We see people from English constituencies complaining about this deal just as much. The whole problem is about transparency. The Government have bent over backwards to do everything they can to ensure that the Australia deal, which is a template for future deals, was not properly scrutinised, and in my opinion that was deliberate.

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[Paul Blomfield]

I note the hon. Gentleman’s intervention and expertise on trade deals, but I do not think his question is really directed at me. He and others have made the point that the fact that the parliamentary scrutiny period for the CRaG process expired without debate means that there has been no real opportunity for us to look at the deal. The International Trade Secretary studiously dodged meetings of the Select Committee until it was too late for meaningful engagement. Today we are being asked to pass bare-bones legislation implementing an agreement that we have not been given the opportunity to scrutinise.

This matters because these deals set the scene for the way we approach post-Brexit trade negotiations. We have not done trade negotiations for many years, so it is important that we learn from the way this deal is handled and get it right in the future—we clearly did not get it right this time. Parliamentary scrutiny and oversight matter. As the Chair of the Select Committee pointed out, they are important not simply for the health of our democracy, but for our economy. Members have a valuable contribution to make, as we have heard in this debate.

The reasons for the avoidance of scrutiny are becoming clearer. I know the hon. Member for Huntingdon requested positivity, but we need honesty as well. The Government’s own estimate of the benefits of the Australia deal are that it will contribute 0.08% to GDP by 2035; their assessment of the New Zealand deal is that it will add nothing to GDP. As many Members have highlighted, for key sectors, the figures are worse.

The NFU is concerned that UK agriculture will suffer as a result of the Australia deal. Its president, Minette Batters, explained that

“Despite assurances that these sectors would be afforded some level of protection, we will see full liberalisation of dairy after just six years, sugar after eight years and beef and lamb after 15 years.”

That means no restrictions on imports and open market access, which leaves no protection for UK agriculture or our standards, rights and protections. She continued:

“Just as concerningly, the UK has agreed to beef and lamb quotas which will favour imports of high-value cuts, despite this being the end of the market where British farmers tend to derive any value from their hard work. It’s also difficult to discern anything in this deal that will allow us to control imports of food produced below the standards legally required of British farmers”.

Standards are not just important to farmers; 95% of British people think it is important to maintain British food standards through trade deals. There is also concern in the agriculture sector that Australia approves the use of almost three times the level of pesticides as the UK does.

I served with representatives from every party in this House and representatives from across business and industry on the UK Trade and Business Commission. As part of our work on this deal, we heard, for example, from a beef farmer, Jilly Creed, who explained that hormone beef and antibiotic use is a big concern in the sector. She illustrated the differences between UK and Australian practice in the industry in relation to animal welfare and environmental safeguards, telling us that

“Our cattle go 30 miles down the road and are slaughtered within two hours of leaving this farm. Cattle in Australia can travel up to 24 hours without food and water”.

Kieran Box, of Friends of the Earth, talked to us about environmental issues, saying that

“Prioritising a negotiating partner like Australia…with a lack of progress towards climate targets, with some fairly poor enforcement of environmental laws at the state level, and with the lack of enforceable commitments that we see in the FTA to progress on multilateral environmental agreements, it just feels that we have a set of multilateral environmental commitments on one side and we have a set of trade agreements on the other that pay lip service to those, but in practice they are contributing…to emissions.”

The TUC told us that the sanctions mechanism in these deals for issues such as workers’ rights degradation are so

“restrictive and difficult to be actually brought into action that we don’t think it’s going to be possible to use”.

It is clear that, desperate for a post-Brexit deal, the Government were willing to secure this one at any price, regardless of the damage to communities, industries and the environment. That underlines the importance of effective parliamentary scrutiny. There is real concern that the regulation-making powers in clauses 1 and 2 will enable existing legislation to be amended significantly without scrutiny, undermining parliamentary sovereignty and transferring yet more power to the Executive.

[Sir Mark Hendrick]

Is it not the case that the whole trick of Brexit was to pretend that trade deals with other countries could compensate for the loss of trade with the EU? We have seen the Government conducting a tick-box exercise where roll-over deals from the European Union were turned into so-called successes, when they were not successes—they were just a copy of what we had with the EU. Australia was the first opportunity to have a template for future deals, but the Government have fallen at the first hurdle.

[Paul Blomfield]

My hon. Friend echoes the point that I am making.

I am drawing my remarks to a conclusion, but I will make a further point. Trade deals and their implementation must be developed with engagement from business and workers so that they can operate effectively.

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[Gareth Thomas]

Of course we will want a much more meaningful process of scrutiny of trade deals when we switch Benches, but we also want to make sure there is a much more meaningful process in the few months left of the Conservative party’s time in government.

As I have set out, it was deeply disappointing to hear and share so many concerns of Conservative Members about the scrutiny allowed to this House of the trade deals the Conservative Government have negotiated with such key partners. We know the ministerial team at the Department for International Trade was in crisis, with the Secretary of State at loggerheads with the Minister of State, open and clearly deep personal animosity, and then junior Ministers resigning in protest over lack of support for British exporters. The chaos was obvious and clearly profound. As with so much from Conservative Ministers, the difference between what was promised and what was delivered is considerable.

The now Prime Minister said when she was still the Secretary of State for International Trade:

“I can confirm that we will have a world-leading scrutiny process…That will mean the International Trade Committee scrutinising a signed version of the deal and producing a report to Parliament”—[Official Report, 8 October 2020; Vol. 681, c. 1004.]

Only then, she said, will the CRaG process start.

The reality has been somewhat different. The Secretary of State was asked eight times to front up at the Select Committee and only finally turned up to answer questions after being shamed into doing so by her rightly angry Back Benchers. Ministers have failed to publish in full vital analysis or modelling to justify key provisions in the agreement, not least on agricultural quotas. The Government began the formal 21-day CRaG process before the International Trade Committee had produced its report, and even before the then Secretary of State had had the courage to show up to defend the agreement.

The Government refused to grant the Committee’s perfectly reasonable request for 15 sitting days between the publication of that extra critical information and the start of ratification of the CRaG process. As my right hon. Friend the shadow Secretary of State underlined, Lord Grimstone—then a trade Minister—confirmed in May two years ago that the Government did not envisage a new FTA proceeding to ratification without a debate having first taken place. World-leading it has not been.

It is similarly extraordinary the Trade and Agriculture Commission is not properly resourced. If that does not change, it will be clear that Ministers do not intend to allow serious scrutiny of future trade deals, either.

[Sir Mark Hendrick]

My hon. Friend mentions the Trade and Agriculture Commission, which it was promised would have proper trade union representation, but many months after it was set up, that has still not materialised.

[Gareth Thomas]

My hon. Friend is right to highlight that ongoing concern. His intervention reminds me that it would be remiss of me not to praise the International Trade Committee, whose work on the deal, notwithstanding all the difficulties that it has faced, is an example of the very best of our Select Committee system at work. Indeed, I say gently to its Chair that perhaps his Committee’s work is one small example of how the UK is stronger together.

I sympathise with the frustration of cross-party Committee members that no cohesive strategy for trade negotiations has been published, making it that little bit easier for Ministers to be pushed and pulled in whatever direction those with whom we are negotiating want. I hope that whoever is confirmed as Secretary of State for International Trade will address that key issue quickly. Why has there been such a contrast between what was promised to the House for such key deals and what has happened? Is it just incompetence, laziness or poor performance from individual Ministers, or is there something more profound here? Is it that the implications for procurement, British agriculture and tenant farmers—the hon. Member for Penrith and The Border (Dr Hudson) and others flagged up that issue—as well as for our food standards, for labour and human rights, for action on climate change, for buying British and for good digital regulation are so significant that Ministers felt it better to try to discourage a sustained look at the provisions in these deals?

The Australia and New Zealand trade deals are not going to deliver the sustained boost to economic growth that the country needs. Many have made that point. Welcome as the deals will nevertheless be, they will deliver at best marginal benefits for business, limited gains for consumers and few additional jobs. In the post-truth world that the Conservative party now sadly inhabits, the deals have been sold to us all as the start of a brave, amazing, fantastical post-Brexit era for British trade and growth. One can only wish that the same effort had been put into the actual negotiations as into the stories being told about these deals.

To be fair, there is genuine excitement from some about these deals: Australian farmers, Australian negotiators and New Zealand farmers were all delighted. On the upside, too, the deals have not led to the value of the pound dropping or a decline in foreign investment, and British farming and food businesses have not seen an immediate hit to their contracts. That, at least, is an improvement on the trade deal that the previous Prime Minister negotiated with the European Union. The overwhelming sense of the trade deals—with Australia in particular, and with New Zealand—is of deals done in a rush, with the now Prime Minister desperate for any deal, at almost any cost.

Some commentators have suggested—this point has been echoed by many in the debate—that in the rush to sign off the two new free trade agreements and bring the Bill to the Floor of the House, Ministers have failed to grasp how the deals leave Britain badly exposed for future negotiations with, for example, the US or Brazil. They argue that by undermining our food, animal welfare and environmental standards, the deals create difficult precedents in key parts of our economy, and that English farmers—and those in the devolved nations too—have been left most at risk of a long-term cumulative hit to their, and our country’s, economic interests, with the terms of these deals being used against us in even more significant negotiations.

It is, I have to say, extraordinary that Ministers made such a big offer to Australian farmers and got so little in return. The unconditional abolition of tariffs on Australian farm produce with few safeguards—a very big concession—is particularly surprising given that Ministers did not even negotiate basic protections for our most famous products, a point made by my right hon. Friend the Member for Torfaen (Nick Thomas-Symonds) and the SNP spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). Why did Ministers not prioritise protections of UK geographical indicators for our most iconic brands, such as Scotch whisky, Swaledale cheese, traditional Grimsby smoked fish, Yorkshire Wensleydale and Cornish pasties, to name just a few?

It is not just in Australia and New Zealand that Ministers cannot negotiate protections for our country’s best brands. Ministers still have not secured GI status in Japan for half the products they claimed they would. Indeed, ironically it appears Ministers are hoping their failure here will be partially put right through the knock-on impact of the EU’s negotiations with Australia.