Trade (Australia and New Zealand) Bill

Sammy Wilson Excerpts

2nd reading
Tuesday 6th September 2022 Commons Chamber

[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%.

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Gentleman not accept that the reason we are now doing separate trade agreements, especially with the south-east Asian part of the world, a lot of developing countries and countries such as Australia and New Zealand, is that they are the parts of the world that are growing and where markets are going to expand, while Europe is in stagnation? Having the freedom to do that and be released from the EU is going to be good for GDP, business and employment in the UK.

[Angus Brendan MacNeil]

I hear exactly what the right hon. Gentleman says, and he is right to an extent. However, let us suppose I were to give him £1 this year and £1.50 next year, and ask him how his income from the Member for the hon. Member for Na h-Eileanan an Iar had changed. He could say that it had grown by a staggering 50%”, but it would have grown by only 50p. When you are starting with something very small and you say that the percentage is going to be very big as a result of the growth, you still have something very small at the end of it. We should bear that in mind.

I return to the point about the Brexit damage of 5% of GDP and the effect of this Australian trade deal, depending on which type of modelling we use. The first model gave us a 0.02% gain—that was on the Armington trade theory spectrum, which all members of the Committee know just like that. When we moved to the Melitz-style spectrum, we were given a figure of 0.08%, which represents growth of 400%. That is a fantastic bit of growth, but this was still only 0.08%. If Brexit is 5%, this is like saying, “I am losing £500 but the Australian trade deal is taking in £2, if I am using the pessimistic option, or £8, if I am using the optimistic option.” That still leaves the UK economy as a whole £498 to £492 out of pocket by this entire transaction. The joy and boosterism that comes from some parts of the former Government, at least, should be seen in that context. If we add in all the other trade deals—the American trade deal represents 0.2% of GDP, the New Zealand one that we are considering today represents about 0.1 % or 0.2% of GDP and the CPTPP represents about 0.08% of GDP—we might find ourselves up around the £40 mark. It is a bit like going to the races with £500 and coming back with 40 quid. That is basically what is happening here.

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[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.

[Sammy Wilson]

rose—

[Angus Brendan MacNeil]

I will make a little progress and then come back to the right hon. Gentleman.

The point I was making earlier was that the UK now finds itself in the position of being outside the European Union, of talking about the comprehensive and progressive agreement for trans-Pacific partnership, which we will be debating at tomorrow’s Committee, and of not being able to export anything anywhere in the world without masses of paperwork. The proverbial prawn sandwich or the chicken leg cannot be exported without an equivalent weight of paper accompanying it. We know the difficulties that we have in sending that to the European Union, and we are talking about CPTPP and trade agreements. The reality is that it will still be easier to send stuff to the European Union under the EU–UK Trade and Cooperation Agreement than it will be under all those other trade agreements, so let us put trade agreements into some kind of context. They are not a panacea. They are not a replacement for the European Union. What we have done is raise our fences to the European Union to a certain height and lowered some of our fences to other countries, although they may still be higher or even at the same height as those to the European Union, but the global point is that exporters from the UK are finding it difficult to send stuff anywhere. Anything that has to go anywhere requires paper, admin or tariffs. That is a fact for the United Kingdom and a fact that is often missed in our understanding of trade.

[Sammy Wilson]

The hon. Gentleman has rightly said that there are tensions between producers in the UK, who may well find themselves with greater competition as a result of trade deals, but that there are also benefits to consumers, who, of course, far outweigh the number of producers that might be affected and who will benefit from cheaper prices. Will he not also accept that we can help our producers be more competitive, especially now that we are out of the EU, by reducing their costs and removing some of the costly and unnecessary regulations, which push those costs up and make it more difficult for those producers to compete anyway?

[Angus Brendan MacNeil]

I can kind of see a bit of what the right hon. Gentleman says. For example, perhaps we should not have to stick ear tags on lambs before sending them to market. At one time, we did not have that hassle of having to put a 50 pence tag in a lamb’s ear, but then consumers said that they wanted traceability; they wanted to know where the lambs came from. We then have a debate between this regulation that is costly to the farmer/crofter and the consumer wanting a bit of traceability. Again, there is a political decision to be made. Do we want to get rid of tags in sheep’s ears, for instance—that is the easiest example that I can think of. That is one of the problems of getting rid of regulations. Which regulations do we want to get rid of? That is a legitimate point of debate, but if we get rid of our regulations, we do have to understand what the impact will be, and who does not want that regulation to be got rid of. Certainly, getting rid of ear tags in sheep—if anybody is listening—would be a help, because they often get lost in the fences. However, I do not think anybody will be listening and we will still have ear tags in our sheep to deal with.

The shadow International Trade Secretary mentioned that, in the early days, there had been a lot of headline chasing. When Brexit was being done, the Government were scrambling around for ideas. Freeports was one such idea—let’s have freeports, they said—but GDP was unquantifiable, whereas, as I have said, the Government have quantified the GDP of Brexit. The Government then alighted on free trade agreements. I have said this often—members of the International Trade Committee are probably ready to fall asleep at this point—but it reminds me of Neville Chamberlain coming back from Munich talking about peace in our time. This is the equivalent; it is trade deals in our time. It is not about what they mean for the economy, but about them looking quite good.

A former Trade Minister—I will not mention his name—was telling me that he had a bit of boosterism from the former Prime Minister. He was told to get on planes and to sign these bits of paper. He was very, very positive. If it was a car he was selling, I would have bought it. When I asked him what was under the bonnet—or what was the GDP gain from this trade deal—he did not know. That goes back to the point about there being no strategy; it is very concerning that he does not know what his trade decisions are doing for the economy. Unfortunately, with all the difficulty and fluff, the economic gain of trade deals is not being looked at, which is disappointing. Certainly, Brexit has left the GDP of the UK weaker, and at a time when we face a cost of living crisis, things are more expensive and people have less money in their pockets.

The final point I want to touch on is food security and what is happening around the antipodean sale of meats. They will say that they do not fill their quota at the moment, but what they will be enabled to do is to fill it more than the European Union’s free trade deal, which is more restrictive than the UK’s—the UK’s is one of the most relaxed, or lax, trade deals. The best cuts can be sent, which helps them with what they call carcase efficiency, with certain parts sent to specific parts of the world, meaning they can take the top part of the market away quite effectively. As I have said, Professor Lorand Bartels found this the most liberal case that he could think of in the world of anybody opening up their food area.

The deal also enables what I would describe as a parachute market for Australia and New Zealand. If something goes wrong in another market, they now have somewhere else to put a big quantity into. That might have an effect in future of displacing and damaging production in the UK. If the current UK is used as a parachute market for a number of years and then the other market is re-established, we cannot turn on production as quickly as we can turn it off. That is a big problem.

I have mentioned that CPTPP will not be like the European Union. It is not a replacement; it is a smaller GDP and it will be more difficult still to sell into that market. In the CPTPP, I do not think that access into one country will be access into all countries, as it is for the European Union, although that will be clarified tomorrow for those who want to tune in to the International Trade Committee.

We have a situation where the Australians cannot believe they have done so well. New Zealand television is utterly amazed and asking, “How come it is so easy?”. It is because the UK Government have been seen coming. People know they are desperate to get into CPTPP and they think that if they get these trade agreements done, that will happen. That goes back to the point made by the hon. Member for Mole Valley (Sir Paul Beresford) that the antipodeans were furious about the changes in the ’70s; this time perhaps they feel collectively that they have got one over the Poms, as they might describe them.

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[Angus Brendan MacNeil]

I am grateful to the hon. Gentleman. In Scotland “jags” means something that goes into your arm, usually against covid—I think they are called jabs down here—but I think he means the Jaguar car. Of course it is in Australia’s power to buy the Jaguar car; it is then Australia that puts the tariff on the cars coming in. If Australians are moaning that they cannot buy Jaguar cars because of the tariffs, they need to see the Australian Government, who, despite what they say, are not producing any cars and whose very free and open market is not as free and open a market as they let on.

[Sammy Wilson]

To give the hon. Gentleman a piece of good news, adjacent to my constituency there are already 150 new jobs making drilling machines for the mining industry exclusively in Australia. There are already benefits showing through in the manufacturing of goods and 150 people adjacent to my constituency are employed in a factory and enjoying those benefits.

[Angus Brendan MacNeil]

That is fantastic news, and it has happened before the free trade agreement. That just goes to show that the fantastic people of Northern Ireland do not need Westminster to give them a free trade agreement.

I am coming to the end of my remarks. I will give several views to the Chamber on the vote tonight. This trade deal is globally good for the UK, as the figures show, but its level of goodness is very small compared with the badness of the Brexit debacle. Is it good for Scotland? The Scottish Government do not seem to think so. They were engaged with perhaps the way that the umbrella engages with the rain: more with disdain than any sort of welcome.

When it comes to fish and agriculture, we know that Brexit has been most damaging for the highlands and islands of Scotland, including my constituency. The Government cannot break down the effect of this agreement, but it looks like it will also be damaging. That means we have two events that are locally damaging. I am here as a constituency MP. I can weigh up the arguments as Chair of the Committee, but I am mindful that I vote as a constituency MP. All of Brexit—the entire process—has been economically damaging, but the final upshot of this deal is that in years to come, as we move towards independence, that damage will be used as an argument against Scotland being independent. It is a very disappointing state of affairs that this deliberate policy—chosen in Westminster—will do that to us, so we will not be listening to arguments like that in the future.

It is disappointing that this debate was not done properly, and that Members did not get to put their tuppence worth and argue the points that we have debated with the hon. Member for Wyre Forest (Mark Garnier) and my good friend from Northern Ireland, the right hon. Member for East Antrim (Sammy Wilson), because there are legitimate things to consider, to ponder and to change our minds about so that we can get a good—and a better—deal. Some people would say that the European Union has struck that better deal. Had we remained in the European Union, we would not have lost the 5% of GDP. We may well have got the GDP gains anyway from the trade deals that the European Union has just done with those two countries. The upshot might well be that there has been no gain whatever in these trade deals, because they would have come had we not decided to damage the beer producers and exporters of Kent and many others places that have been trading, as has been done.