Trade (Australia and New Zealand) Bill (Third sitting)

Nia Griffith Excerpts

Committee stage
Tuesday 18th October 2022 Public Bill Committees

[Ms Qaisar]

I thank my colleague for his intervention. He is correct that the challenges that Scottish farmers face are the same as those faced by Welsh farmers and farmers from across the four nations. A key point that he failed to mention, however, is that in Scotland over 60% of people voted to remain in the EU, and there is still a lot of anger from Scottish farmers in that regard.

Last week, we also heard from Jonnie Hall from NFU Scotland. He said something that struck me:

“There are clear potential impacts for particular sectors that are already really quite vulnerable in large parts of the United Kingdom, not least in Scotland. I am thinking particularly of the red meat sector and how important that is to the rural economy of Scotland and, indeed, the whole economy. Scotch beef and Scotch lamb are iconic products, but we are not in a situation whereby we can stack it high and sell it low, as it were. Anything that comes along and undermines our position in that respect is clearly going to be a considerable threat—I use that word advisedly—to the viability of agricultural businesses here in Scotland.”––[Official Report, Trade (Australia and New Zealand) Public Bill Committee, 12 October 2022; c. 32, Q40.]

Concerns have also been raised by the Scottish Cabinet Secretary for Finance and the Economy, Kate Forbes, and the Minister for Business, Trade, Tourism and Enterprise, Ivan McKee. They recommended that the Scottish Government do not give consent for the Bill in its current form. We need to be really careful. The UK Government must not continue on the path of creating delegated powers to implement the Bill.

Amendments 3 and 4 seek to ensure that there are high levels of dialogue and discussion between Scottish and UK Government Ministers. That dialogue would ensure that matters of procurement in Scotland are at the heart of this legislation, crucially protecting the interests of Scottish farmers. In order to support Scottish interests and farmers, I ask Members to please support the amendments.

[Dame Nia Griffith (Llanelli) (Lab)]

I rise to speak in particular to amendments 5, 20 and 22. I am sure that the Committee will be pleased to hear that in talking about amendment 5 and consultation, which is vital, I will also refer to amendment 22 and the issue of impact assessments, so as not to repeat myself. To avoid excessive repetition, I will give examples based on the Welsh Government, but that will certainly apply to Scottish Ministers, to the Northern Ireland Administration and to regions across England. The issue for us is that here we have a clause that will implement part of a trade agreement in which we would have liked to have seen better consultation and a more nation-specific impact assessment. What we can do here is try to put in appropriate consultation before the legislation that clause 1 will allow is finalised.

It is essential that there should be consultation specific to the nations and regions of the UK for a number of reasons. In the case of Scotland, Wales and Northern Ireland, devolution means that within areas of devolved competence, such as agriculture and economic development, there is increasing divergence in the way that things are done. Indeed, public procurement policies are different, and it is important to see the impact of the implementation of the Bill on each nation.

There may be very different economic profiles for the different nations and regions. In the case of the Bill, what is of particular significance is the relatively greater importance that the production of beef, sheep meat and dairy products has in certain nations compared with the UK as a whole. The same may be said for specific regions of England, for example, the relative importance in Cumbria of the beef and sheep meat sectors. Equally, there can be concerns for a particular region because of its reliance on fishing or a specific industry. To give an example, 70% of agricultural output in Wales is beef, sheep meat or dairy, and 70% of the farmland in Cumbria is for beef and sheep livestock farming, with a further 16% for dairy. The importance of livestock farming in Scotland has just been mentioned by the hon. Member for Airdrie and Shotts.

It is no secret that the farming and food processing sectors are most concerned about the treaties; those are the sectors for which ongoing consultation on the implementation of the treaties and their impact on public procurement is absolutely vital. The Government’s impact assessment singled out agriculture, food and fishing, and food processing, as the sectors that lose out in both the Australian deal and the New Zealand deal, with gross value added down in the Australia deal by £94 million, and in the New Zealand deal by £48 million. Food processing is down in the Australia deal by £225 million, and in the New Zealand deal by £97 million. Obviously, there is real worry about what will happen to our farming industry because that has a massive impact on the guardianship of the local rural community, the family farms, and affects our culture—the Welsh and Gaelic languages.

Regarding the markets, let us take the example that 85% of the beef produced in Wales is consumed in the UK, as is 60% to 65% of sheep meat. There is a question about the impact that the huge and rapidly increasing tariff-free quotas of meat from Australia and New Zealand will have on our own farmer’s ability to sell into the UK markets. While we have mentioned the issue of school meals, it is not necessarily in the public procurement of the finished product, but in the supply chains of ingredients, where we will potentially see Australian and New Zealand products—cheese or meat—displacing UK produce. That is in conflict with some of the devolved nations’ procurement policies, where there is a wish to support the local and circular economy.

Further concerns have been raised. In the New Zealand deal the weights allowed in under the tariff rate quotas refer to the carcase weight equivalent, whereas in the Australia deal the volumes are shipped product weight, which means that they could be used disproportionately for the Australians to send their most expensive cuts, thus challenging the most lucrative part of the market for our farmers. We saw something similar to this during covid: when restaurants were not allowed to open, there was a drop in demand for steaks and higher end meat products, while supermarkets continued to demand the lower value products, and that had repercussions for our farmers and food processing industry.

--- Later in debate ---

[Bill Esterson]

My hon. Friend is making the case very well about the need to involve the farming and agriculture industry in trade agreement scrutiny. Was she struck, like I was, by the comments from Jonnie Hall of NFU Scotland about “retrospective scrutiny” and the fact that this weakened the role of the Trade and Agriculture Commission? Does she share my view that the evidence we heard is exactly why we need the kind of analysis referred to in amendment 7 before the regulations are implemented?

[Dame Nia Griffith]

I absolutely agree with my hon. Friend. The whole point is that there should have been much better consultation, either directly with the farming unions or by their representatives in the Scottish and Welsh Governments who have raised these points and have very good, close relations with the stakeholder groups in their respective nations. As my hon. Friend rightly says, a number of concerns were raised by the NFU. The whole point of having consultation and impact assessments is that those concerns can be properly documented and we do not rush into the legislation produced by clause 1 and leave people in a more difficult predicament.

[Gareth Thomas]

Does my hon. Friend agree that one reason why the Minister ought to be tempted by amendment 5 and amendment 22 is that they would give Essex County Council—which is currently Conservative-run but probably not for much longer, given the mess the Conservative party is leaving our country in—the chance to consult directly with small and medium-sized businesses about the procurement chapter deals that have been done in the UK-Australia and UK-New Zealand free trade agreements? As a representative of the people of Essex, he would surely think that that sort of consultation is a good thing that might remedy some of the mistakes that his predecessors have made in this area.

[Dame Nia Griffith]

I absolutely agree with my hon. Friend. The point is that locally based devolved authorities have much closer contact with the people they represent, so the consultation on how this is working out, what we are going to do next and what the next part of the implementation is must be able to take account of the feelings of those stakeholders on the ground who perhaps feel that they have not had a voice until now.

I pay tribute to officials in the Department for International Trade and the Welsh Government for their very positive and professional engagement. Indeed, the Welsh Minister for the Economy, Vaughan Gething, notes that there has been some improvement between the Australia deal and the later New Zealand deal, and I hope that the experience has been similar for colleagues in Scotland and Northern Ireland, and indeed for representatives of local government across the regions of England.

On procurement, the Welsh Government go as far as to say that there may be scope for businesses in Wales to take advantage of the provisions included in the UK Government procurement agreement, and that some Welsh interests in procurement were protected during the engagement with the Department for International Trade. However, Vaughan Gething says:

“I hope we continue to see improvements in the engagement we have with the UK government, and that future deals provide opportunities and benefits for producers and consumers in Wales.”

It should not be a matter of hoping or relying on good will, which is why the concept of consultation should be enshrined in the wording of the Bill and a meaningful consultation should take place before the clause allows for the implementation of the procurement chapters of the FTAs. Of course, there are certain powers that the Welsh Government have already. Under section 62 of the Government of Wales Act 2006, they have the power to make representations about any matter affecting Wales, but we still feel that this needs to be stated explicitly in relation to the Bill.

One of the issues that relates to procurement is the gradual elimination of tariffs on beef and lamb. Under the New Zealand treaty, for example, the UK or New Zealand can unilaterally accelerate the elimination of tariffs. This is clearly of huge importance to Welsh farmers, so the Welsh Government want to know that they will be fully consulted by the UK Government on any possible acceleration of the elimination of tariffs on goods from New Zealand well before any decisions are made, because secondary legislation could emanate from the clause to put that into action. Clearly, we need that consultation beforehand. Why? Because if we had had better parliamentary scrutiny of the trade deal, we might not be in this position in the first place.

[Gareth Thomas]

Given the comments that my hon. Friend has just made, perhaps the Minister will take advantage of this debate and reflect on whether his ministerial colleague, the right hon. Member for Chelsea and Fulham, was wrong to reject amendments to the Trade Act 2021 that would have increased scrutiny. As many suggested at the time, perhaps we should have a debate on each free trade deal as the negotiations are just beginning to get under way, so that interested bodies can set out their concerns and Ministers can properly understand the depth of concerns that particular sectors might have—especially on procurement, given that that is what we are debating at the moment, but more generally as well. We are only having to oppose the amendment because Ministers will not do the sensible thing and have proper parliamentary scrutiny much earlier and at the end of things.

[Dame Nia Griffith]

Indeed. As I said, there are a number of unanswered questions. For example, it would have been nice to have had some analysis from the UK Government to understand why such huge increases were agreed in the quotas of tariff-free beef and sheep meat. Indeed, the Welsh Government requested that but have not had an answer. During the negotiations, the Welsh Government also made calls for market access offers that recognise the risks that large increases in imports could pose to Welsh producers, who have to meet high animal welfare standards. All of this points to why consultation is so important from the very outset and all the way through to the stage we are at now and beyond.

This is not just about the things that have been done by the Bill; it is also about areas where the free trade agreements could have been made better. Let me take the example of antimicrobial resistance. It is okay to stay where we are at the moment, but it would have been useful to work towards a better situation and to use procurement to do that. We do not want just to say, “Well, we don’t want any more use of antibiotics.” Actually, we want to look to reduce their use, although we seem to have missed that opportunity in the trade deals.

We welcome the commitment in the free trade deal to regulate our own standards, as well as the commitment to non-derogation with respect to welfare standards, but the point is that we need the consultation. We want the statutory basis for consultation to extend much further to the point of having some form of concordat with the Welsh Government, the Scottish Government and the Northern Ireland Administration that set out exactly what the consultation would be throughout the process. Indeed, we have a similar concordat on justice between the Welsh Government and the UK Government.

The point is to try to give some shape to the framework, and some certainty, and such a concordat would have so much to contribute. I made a point earlier about the fact that the devolved Administrations are in many ways much more able to engage with stakeholders to represent their views. Going forward, we need to think about issues that might cause problems, such as rules of origin and the fact that small and medium-sized enterprises might struggle and need support in that respect—consultation, impact assessment and feedback are so important to getting this right.

[Gareth Thomas]

Surely one of the other benefits of consultation is that it might start the Welsh Government and the Department for International Trade thinking about how, together, they might help businesses in Wales to capitalise on a free trade agreement. My hon. Friend will remember that a previous trade Minister criticised the Department for not doing enough to support businesses trying to export. Early consultation with the Welsh Government presumably might help to address some of those failings and enable businesses, together with the Welsh Government and the Department, to begin to think more quickly about how they might take advantage of the benefits of an FTA.

[Dame Nia Griffith]

Indeed. Not only might there be a benefit, but the high penalties that can be incurred by the respective parties if, for example, they do not understand rules such as the rules of origin might be avoided. Such fears could be fed back through proper consultation and support put in place to ensure that we were able to take advantage of the free trade deals.

Another pertinent issue is the fact that we are debating legislation that overlaps with areas of devolved competence —for example, procurement policy, agriculture and economic development. We do not want the situation that arose with respect to the United Kingdom Internal Market Act 2020 whereby instead of a proper negotiation on where we should end up and what we wanted and required, we were frightened by the thought of being driven to the lowest possible common denominator on standards by the over-powerful influence of a UK Government purporting to represent the whole UK, but in fact listening only to themselves and not taking into account the views of the devolved Governments.

It is important that we recognise the powers that we have, and that the way forward is through consultation and negotiation, rather than riding roughshod over the issues. For example, the Welsh Government have devolved responsibility for setting domestic sanitary and phytosanitary strategy and policy. Clearly, that is of direct relevance to procurement and the way the FTAs were drawn up.

--- Later in debate ---

[The Chair]

I reassure the shadow Minister that he will always catch my eye as long as his comments are—as they are always are—in the scope of the Bill.

[Dame Nia Griffith]

My hon. Friend raises the importance of consultation, working together and wanting to make things better by negotiation, rather than by imposing a view by one central Government Department on areas that are actually within the devolved competence of other Governments.

I will move on to speak more specifically about the issue of impact assessment. There are various reasons for wanting a proper impact assessment of the effects on Scotland, Wales and Northern Ireland and on regions of England. Clearly, there is the levelling-up agenda. There is the fact that different sectors are of different importance to different areas. There is also the fact that the Government’s impact assessment in respect of the FTAs is literally just a table. This is the sop we have to anything to do with the individual nations or regions. We do not have a real study of the impacts of the FTAs on those areas.

As we go forward with the Bill and clause 1, with the powers it provides, it is absolutely essential that it should include a clause for proper impact assessment. The Welsh Affairs Committee was very critical of the lack of detail in that respect. The Committee referenced the Japan comprehensive economic partnership agreement, which includes a better attempt at regional impact assessment—of Wales, for example—but that again did not go far enough. There is a real need for proper impact assessment.

We have mentioned already the impact on agricultural producers and, as I have mentioned, the wellbeing of future generations. The importance of that is of course that FTAs have obligations that bind future generations. They are not things that we can go back on. That is why it would have been nicer to have had impact assessments earlier. If we had them now we could at least prevent mistakes going forward and not have negative impacts on our agricultural sector in the surrounding communities. Given that we already start with negative figures, there is clearly some work that needs to be done. The risk has been exposed. That has been detailed, yet the impact of what that means for farming families and our communities has not been thoroughly explored.

[Gareth Thomas]

The beauty of having a consultation before regulations are introduced as well as an impact assessment once regulations are about to be brought forward is that we can try to prevent mistakes and understand what might happen as a result of procurement regulations. An impact assessment can highlight to the Welsh Government and other Government agencies what ameliorative support might be needed to help businesses adjust to the impact of new procurement regulations as a result of the procurement chapters. That is an advantage of two of our four amendments as well.

[Dame Nia Griffith]

Indeed. In respect of support for businesses, there is a real concern about the cumulative impact. That, again, refers to the first amendment we debated today—the issue of what other FTAs with other countries might be included in the legislation. Also, we need to see what the situation would be if the agreement has a negative impact—for example, unfair subsidies made by New Zealand or Australia to help their businesses, or if there is a particularly high volume of imported goods. It is important that Welsh businesses can report and escalate any concerns to the relevant trade bodies and authorities. Again, the proper relationship with devolved Governments can facilitate that.

To sum up on the issue of impact assessments, the impact on sectors is very important. That dovetails with the question of the different regions in England and the different nations of the UK because different sectors can be affected by trade agreements in very different ways, particularly regarding the output and the employment in the different areas. What is the GVA in those areas? Those are all reasons why we want an absolute commitment from the UK Government to a proper consultation procedure and a proper impact assessment before the implementation of clause 1.

I want to sum up with the question of rights and the rights that we are concerned about. The Joint Committee on Human Rights did not give exactly give the ETAs a clean bill of health as they went through. We have had concerns from the trade unions. The Joint Committee on Human Rights raised the fact that in the Australia deal there is no language about the protection of human rights. I note that in the response to the International Trade Committee, the Minister at the time, the right hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), rather brushed that off as “Oh, there are other ways we can deal with that.” However, as we know, it has become more common for trade deals to have a wider focus.

Whereas historically trade deals would just have focused on the economic benefits of trading relationships, they have now expanded to address a wider set of cross-cutting areas, such as small and medium-sized businesses and gender, labour and environmental policy, including climate change. Those wider considerations are particularly relevant to public procurement implementation because of the role of procurement policies in protecting the environment and fair work.

The Joint Committee on Human Rights was not exactly happy—[Interruption.] It was pleased to see provisions on forced labour, modern slavery and human trafficking, but noted the limitations on enforcement and supply chains, limitations that the trade unions also raised. The trade unions also pointed out that they were not part of the stakeholder consultation and did not have their rightful place at the table. Again, consultation through the devolved Governments could give them a better voice, because there tends to be a better relationship, but trade unions should be at the table, full stop.

I will not go into more detail on climate change, apart from to say that at the time of the negotiation of the Australia deal, Australia had a terrible reputation on climate change, ranking very low in the world, with a terrible record on emissions. This might have been an opportunity, perhaps, to do rather more.

[Gareth Thomas]

It was a Conservative Government.

[Dame Nia Griffith]

It was indeed. I hope that the new Government in Australia may do something of their own accord, but we should not be leaving it to them to act of their own accord, and hoping. That is the point of the amendment. It is not enough to leave things just to happen, because they do not. Unless we put positive steps in to make something happen, it does not happen.

[Gareth Thomas]

My hon. Friend is making a very good point about climate. Is that not one of the differences between the New Zealand FTA and the Australian FTA? Negotiating with a conservative Administration in Australia led to a deal that does not reference climate. Negotiating with a Labour Administration in New Zealand led to substantial provisions on climate—[Interruption.] Would it not be good to hear the Minister explain how he has been talking to the new Labor Administration in Australia about how they might perhaps insert some more climate provisions into the trade relationship between the UK and Australia as a result of some of the joint committees that have been set up under the FTA?

[Dame Nia Griffith]

Indeed, absolutely. One rather suspects that it was not thanks to the UK Government, but thanks to the New Zealand Government that the climate provisions found their way into the trade agreement; they somehow got completely lost in the Australian FTA.

All these points are reasons why we have tabled the amendments. These issues are too important to be left to chance. They should be fundamental to any form of procurement policy, which should be based on a full impact assessment, full consultation and full respect for human rights and employment rights, and our goal of getting to net zero. Those are all very important points.

[The Chair]

After that big bang, I am very tempted to call the ghost of Christmas past, but instead I call the very living and very present, Lloyd Russell Moyle.