Future Free Trade Agreements

Paul Beresford Excerpts

Thursday 21st February 2019 Commons Chamber

[Sir Paul Beresford (Mole Valley) (Con)]

As usual, I have a couple of declarations to make. First, I belong to the National Farmers Union, not as an active farmer but certainly as a member in this country. With my background that is to be expected. Secondly, as my accent has already made clear, I have dual nationality. I come from New Zealand and I have a New Zealand passport. I also have a UK passport and I have lived here longer than there. I am extremely supportive of what the Secretary of State for International Trade and President of the Board of Trade, my right hon. Friend the Member for North Somerset (Dr Fox) says, particularly when he talks about negotiations to join the TPP, and working on negotiations for a deal with Australia and New Zealand. Australia and New Zealand can teach us a number of things as we head into a field that they headed into as we went into the EU.

There are at least two relevant factors involved in the negotiations on going into the TPP. First, most people see Britain as an asset as a TPP partner. After all, free trade agreements are two-way—or perhaps I should say that they cut both ways. Secondly, as I have made clear, we almost certainly have at least two friends, two Commonwealth friends, who have been supportive for generations, even kith and kin. They will be supportive as we move towards the TPP.

When we went into the Common Market, New Zealand’s trade with this country teetered overnight from 90% to 50%, and then dwindled to 5%. It must find it a bit strange and have a wry smile that we want to go back. Fortunately, it is most likely to be helpful and positive to our interest, but equally, we must remember, with its own interests definitely in mind. After the crash of the New Zealand economy when we entered the then Common Market, New Zealand and Australia forged an aggressive export drive. They also shocked their economies into action. In New Zealand’s case, I remember the Prime Minister, a few years after that trade blow, explaining to one of our well known characters on the “Today” programme that it had lifted its trade export market to over 100 more countries. We need to watch that as we go out. There was a slight but not too serious hiccup between Australia and New Zealand when a small group of Australians suggested that New Zealand should become another state of Australia. That generated much antagonistic steam. In fact, the New Zealand Prime Minister at the time stated that

“Any New Zealander moving to Australia would increase the IQ of both countries.”

I am sorry that the hon. Member for Australia and Scotland has left the Chamber. [Laughter.]

The main export for New Zealand then and now is agriculture. New Zealand farming was radically shaken up very quickly. Farming subsidies were removed at a stroke overnight, but so were the restrictions. The freedom that gave those farmers made such a difference to them entering a really effective market. Farming became an industry. It became open, competitive and free market. Australia did much the same. They will be our competitors and partners both through our trade agreements and if we go into the TPP.

I find the thought of a Pacific link curious, because the only UK geographic link to the Pacific is the overseas territory of Pitcairn Island. As has been said, I understand that Simon Birmingham, the Australian Trade Minister, did not sound particularly enthusiastic—we heard a couple of quotes. Contrary to that, however, he has also said that Australia is ready to fast-track some sort of deal with the United Kingdom. New Zealand, on the TPP, was a little more confrontational. Commenting on New Zealand’s membership of the TPP, Catherine Beard, the executive director of ManufacturingNZ and ExportNZ said:

“New Zealand would benefit from $222 million in tariff savings yearly.”

As an NFU member, I am also aware that she said:

“Agriculture is widely expected to be a big winner with kiwi fruit, beef, wine, dairy, forestry, and seafood products all expected to benefit from savings on tariffs and the chance to more easily make aggressive entries into foreign markets.”

That could be a warning for us. I think of that when I look round my Mole Valley farms. My constituency has a dairy farm that is supposed to be big. It has 350 cows. Mole Valley has sheep farms with perhaps 1,000 sheep, and some of those farms get 90% of their income from subsidies. These farms are tiny compared with New Zealand and Australian farms. Two dairy farms near where I lived as a youngster in New Zealand milk 1,500 and 2,500 cows, twice a day. The farm I came off in the middle of the South Island had 1,000 head of cattle, 1,000 head of deer and 23,000 lambing ewes. When they lambed we had 50,000 sheep. The land, the atmosphere and the weather resembles much of the hill country of Scotland. It is right up where “Lord of the Rings” was filmed.

We have nothing to compare with that here in the UK. The size and the power of the industry in New Zealand could shatter our farming. If we are going for free trade, we have to wake up. We have time. We can do something about it, but we have to give our farmers the chance to dramatically improve. There is protectionist talk of product care and standards matching ours. That is the correct approach, but it is the correct approach for food safety reasons, but not for protection because Australia and New Zealand meet those standards already.

Vineyards are another classic example. There are square miles of vineyards in New Zealand. You can stand on a high hill and see nothing but vineyards.

[Angus Brendan MacNeil]

The hon. Gentleman talks about improvement. I just wonder what he means by that. Does he mean expansion and growth? When he talked about having 23,000 sheep, with 50,000 after lambing, my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) asked me, “How many do you have?” I said 32—just 32. We are talking about a hugely different scale. Is he talking about farms in the UK getting bigger and amalgamating, and a whole change in the structure of UK farming?

[Sir Paul Beresford]

There is a list of ways in which we can look at that. Perhaps I can answer with an old story. I was upbraided by my farmers some time back and they finished with an anti-politician joke. I explained to them that the son of one of my Surrey farmers had gone out to New Zealand and had bought a farm the same size out there. When shearing time came around, he called up the shearing contractor and said, “Will you come and shear my sheep?” The contractor said, “I’ve got two gangs near you. One’s up the Waimakariri and they have 17,000 sheep to go, and the other ones can be with you next week. How many sheep have you got?” He said, “17.” The contractor said, “17,000?” He said, “No, no—17 sheep.” The contractor said, “Oh, are you English?” He said, “Yes.” The contractor said, “Are you from Surrey?” He said, “Yes.” The contractor said, “Right —you’re English, you’re from Surrey, and you have 17 sheep. Can you tell me their names?”

What I am getting at is that we have an opportunity—I will touch on this in a minute—to counteract that. Australia is a huge agricultural producer. The gross value of Australian farm products in 2016-17 was $60 billion. The Australians export about 77% of what they grow and produce. Fortunately, through the TPP and other arrangements, those two nations are pouring their products into Europe, China, the middle east and even the US, and they are not fulfilling their quotas. There is a real opportunity for us to improve our efficiency in farming and everything else, because Australia and New Zealand may well be looking for us to help them to fulfil those quotas, including, particularly, the quota for lamb meat going into the EU.

[Chi Onwurah]

I really appreciate the hon. Gentleman’s anecdotes about sheep farming. He talks about improvements in efficiency, but does he recognise that our landscape—I am thinking particularly about the landscape of Northumberland and County Durham and the beautiful landscape of the north of England—is driven by the scale of farming that we have now? Its beauty would be much affected and, in my view, much diminished by the kind of efficiency that we see in New Zealand farms.

[Sir Paul Beresford]

All I can suggest to the hon. Lady is that she gets disc two of “The Lord of the Rings”, and if she does not find that beautiful, she needs to go to Specsavers.

[Chi Onwurah]

I do not need to get disc two of “The Lord of the Rings”, because I already have it and have watched it on a number of occasions. There are different types of beauty; I am talking about the beauty of Northumberland. I appreciate the beauty of other countries, but I wish to retain the beauty of our gorgeous countryside.

[Sir Paul Beresford]

So would I, but I think it is quite possible to have some dramatic improvements in farming. Part of the reason for that is that, having left the EU, we will be able to have a bonfire of the rules and regulations that the EU has applied to farming. That would make a huge difference. Also—I say this to the Minister—if we are going to continue with farming subsidies, could they be paid on time and without, in the case of my farmers, my having to constantly badger the Department for the payments? We need a total rethink of the subsidies and regulations. We need to provide an opportunity for farmers to meet standards but not have to suffer from the regulations. If we do not do that, we will suffer from some of the gloom and doom that we heard from the Opposition Front-Bench spokesman, except that we will have the help of our allies—Australia, New Zealand and most of the people in the TPP—because they will need us to help them to fulfil their portfolios. That will give us an opportunity to make sure that our farming is up to scratch and can meet standards. However, at the same time, as a few hon. Members have already said, free trade is double-edged.

--- Later in debate ---

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure and an honour to follow my hon. Friend the Member for Warwick and Leamington (Matt Western) in speaking in this debate.

This has been a tumultuous week in British politics and, indeed, a very saddening week for a Labour Member like me. However, today’s debate reminds us of the critical task that this Parliament faces as the Brexit deadline approaches. Trade is at the heart of the Brexit debate, and many Members have made very good and detailed points on the challenges for our trade policy as we leave the European Union. I wish to focus my points on three areas: landscape, cars and negotiating power.

Indeed, landscape, cars and negotiating power are related, as I had reason to realise when my car broke down on the road to Craster in Northumberland on Sunday. After I had sought to negotiate getting a bungee lead from a friendly fisherman, who refused to take any money for it, I had ample time to contemplate the exquisite beauties of the Northumberland coastal landscape while I waited for my exhaust to be repaired.

The labour movement is often associated with our cities and great urban centres. In truth, however, access to and enjoyment of our countryside has been a key part of our labour movement for decades and, indeed, centuries. One only has to think of the Kinder Scout trespass to see the way in which our movement has fought to ensure that our glorious countryside remains accessible and can be enjoyed by everyone.

While Newcastle is uniquely privileged in having a moor, the Town moor—or the “Toon” moor—at its centre, we also have the ability to enjoy the wonderful countryside of Northumberland and County Durham. It is perhaps contradictory to say so, but this stunningly beautiful countryside, with its dry stone walls, little fields and fantastic coastal views, is not entirely natural. It is actually a function of our farming and particularly of our small-scale farmers. They are the ones who have created and who protect our beautiful countryside.

This is of course very different from the situation in the United States, where we can find wheat farms the size of small counties here in the UK and pig farms the size of small towns. How does the Secretary of State expect our small-scale farmers to compete with the American agro-industrial machine? If someone drives through areas of the US that have a similar northern, temperate climate, they will see vast swathes of countryside that, having been cultivated in the 19th and 20th centuries, have been given back over to wilderness because of that inability to compete with the vast farms in Texas and other states.

The hon. Member for Mole Valley (Sir Paul Beresford) suggested that New Zealand might be a model to follow, and as I said, I greatly admire its landscape and countryside, as shown so wonderfully in the films of “The Lord of the Rings”. However, the landscape of north-east England, with its drystone walls, hedgerows and its people, is not comparable with that. In the Northumbrian countryside, someone is never more than a few hundred metres from a wall, house, field, home or road. New Zealand has only 4 million people but 20 million sheep, and although I admire and recognise those different forms of landscape beauty, I do not want that imposed on the north-east.

[Sir Paul Beresford]

New Zealand also produces other agricultural products such as wine and fruit—apples, pears and so on. Many of the units in New Zealand are small, but they work together as co-operatives that do not damage the countryside, and something similar could quite easily take place in many areas of this country. The countryside would be preserved; jobs would be created; and the economic value of those small units would be lifted.

[Chi Onwurah]

I thank the hon. Gentleman for that intervention, but let us be clear. He gives the example of wine—we are not huge producers of that in Northumberland—and fruit, but I am talking about lamb, sheep and the other products of small-scale farming in the highly temperate climate that drives our beautiful, natural landscape. That is what I want to continue.

British farmers have been able successfully to compete on both quality and price in markets defined by EU food safety rules. For example, British farmers export far more wheat flour to the European Union—approximately 250,000 tonnes last year—than they do to non-EU countries, at approximately 6,000 tonnes, and the same goes for other agricultural products such as barley and oats. The EU is the largest importer and exporter of food in the world, and as part of an EU member state, our farmers have benefited from preferential access to that market through exemptions from the tariffs and quotas that are imposed on non-member countries, and without dropping our environmental and farming standards.

With 85% of seasonal agricultural workers in the EU coming from Bulgaria and Romania, agriculture is one UK sector dependent on freedom of movement. The immigration Bill will clearly do nothing to enable the continuation of what the Government are pleased to call “low-skilled” workers—those who earn below £30,000— but what about the Agriculture Bill? Will it protect our small farmers? It does nothing to address concerns about competition, and it places no duties on the Secretary of State for Environment, Food and Rural Affairs. It offers no funding and no environmental safeguards. The Government are showing yet again that they are not prepared to deliver a farming environment that protects our environment as well as the standard and quality of our food.

Our automotive sector is a global success story, although, as we saw in the sad announcements from Honda and Nissan, it now faces challenges due to technology, climate change and Brexit. It is clear that this is not all about Brexit. As I said, there is technology and there is climate change. However, the automotive sector is one of the most competitive and highly integrated industrial sectors. When there is one disabling factor that is a unique disadvantage for UK producers—Brexit is a unique disadvantage for UK producers—we are more likely to lose in the competition for future investment. The inability or the decision of this Government to not take a no-deal Brexit off the table means that our investment is falling.