Traidcraft and Fair Trade

Stephen Timms Excerpts

Tuesday 18th December 2018 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

I am delighted to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on the initiative to secure this debate and on what she said. I also very much agree with what the hon. Member for Strangford (Jim Shannon) said.

I draw attention to my entry in the Register of Members’ Financial Interests, where it is recorded that I am the unpaid chair of the Traidcraft Foundation trustees. I will say a little more about the work of that body later in my remarks.

In 2007, Sainsbury’s announced that it would in future sell only Fairtrade bananas, a commitment that it has maintained to the present day, with 100 million a year of those bananas coming from St Lucia. At the time, a press article described the impact of that decision, under the headline, “Saving St Lucia: UK supermarket sweeps up 100m bananas”:

“Just seven years ago the banana farmers of the Caribbean island of St Lucia were hanging up their machetes and ready to turn their steep hillsides back to forest. UK subsidies for their fruit were doomed, they couldn’t compete with giant ‘dollar’ bananas from South American plantations, and a dying industry seemed to provide only back-breaking work for scant reward.

Today, the island where bananas are not so much a crop but a way of life is celebrating. Just about every St Lucian banana sold for export now commands a premium price and European supermarkets are queuing for more. Money is going into run-down schools, the banana sheds are being repaired and the farmers can scarcely believe the turn round in their fortunes.”

A remarkable change had taken place. The article went on:

“In a reversal of the situation nine years ago where only the Co-op was prepared to stock fair trade products”—

I join the hon. Member for Stafford (Jeremy Lefroy) in paying tribute to its role—

“the big supermarkets now openly compete with each other to be socially conscious.”

How did that turnabout occur? What was it that changed the retail market in the UK to deliver such huge benefits to struggling farmers in the developing world growing bananas, coffee, tea, cocoa and other products? In a word, it was Traidcraft.

Traidcraft, as my hon. Friend the Member for Blaydon said, was established 40 years ago. It described itself as a “Christian response to poverty”. It started with hand-crafted items from Bangladesh, and still sells those. Together with the chair of Traidcraft, Ram Gidoomal, my wife and I visited some of those producers in Bangladesh in 2012. Traidcraft has always had a focus on support for women producers as the most effective way to raise family incomes.

Traidcraft started with those craft products. In the 1980s, the idea of fair trade was pioneered in the Netherlands with coffee, and Traidcraft brought the idea to the UK. What happened, in effect, was that people who ran church bookstalls were persuaded to offer some crafts and fair trade items for sale on the edge of their collections of books. You might be forgiven, Mr Hollobone, for thinking that a few bookstalls in draughty church halls around the country were never going to change anything much but, ultimately, they brought about that change of fortune for the banana farmers of St Lucia, even though neither they nor Traidcraft ever sold any bananas.

Voluntary, community-based support, initially in churches and then increasingly elsewhere—for example, Fairtrade schools—enabled the fair trade movement to get a toehold to start with, to survive and to go on to flourish. Today, fair trade has a large niche in the UK retail market—Fairtrade sales volumes rose 7% last year.

Traidcraft established itself as a plc. As my hon. Friend pointed out, it has 4,500 individual shareholders, buys groceries and craft items from more than 70 producer groups in some 30 countries, and sells them through community fair traders online, dedicated fair trade shops and mainstream retailers. To secure Traidcraft’s focus on its core mission, as a Christian response to poverty, it established the Traidcraft Foundation, which I chair. It has a golden share in the plc to ensure that the initial focus is maintained.

Traidcraft Exchange, the sister charity which does a lot of the producer support work that the hon. Member for Stafford rightly highlighted in his intervention, was established in 1986. It continues to thrive, to support low-income producers in Africa and Asia to grow their business, and to campaign in the UK. For example, a few years ago it played a key role in the campaign to establish the Groceries Code Adjudicator to secure fairer access to the retail market. My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) in her intervention mentioned the “Who picked my tea?” campaign that it led, drawing the attention of consumers to questions about the working conditions and circumstances of those who pick the tea that we all enjoy.

Traidcraft played a key role in the establishment of the Fairtrade Foundation in 1992. It also developed the Geobar, which proved to be a phenomenally successful product, I am pleased to say. The Geobar generated substantial commercial success for the company and underpinned its activities for a long time. In recent years, however, as my hon. Friend the Member for Blaydon pointed out, Traidcraft has struggled to make a profit for the reasons that she set out: the wider challenges in the UK market, Brexit and the fall in the value of the pound.

Traidcraft had quite a specific role as a pioneer in fair trade and, with fair trade being taken up widely by retailers—supermarkets have lots of their own-brand fair trade products these days—the position of Traidcraft in establishing its own niche and commercially viable market has been a difficult one. It struggled to make profits. Last summer, Traidcraft under its then recently appointed chief executive, Robin Roth, after some disappointing sales figures, took the view that things could not carry on. It was decided to rethink the business model, to downsize radically—losing more than 60 jobs, as my hon. Friend pointed out—and in the new year to go forward with only 12 staff, outsourced warehousing and a focus on the grocery business. I am pleased to say that Traidcraft has had a good autumn of sales. There has been tremendous support from the community in my hon. Friend’s constituency and in the north-east more generally, which has helped to buoy it as well.

Fairtrade continues to do well in the UK. I have referred to the fact that its sales volumes rose by 7% last year. It is important to recognise that, notwithstanding the difficulties that Traidcraft has been through, fair trade continues to enjoy strong consumer support.

Traidcraft has a remarkable story. Its pioneering role helped to create fair trade as an enduring segment of the retail market. Committed volunteers in churches led the way, but the support for fair trade is now very widely based, placing it squarely in the mainstream of today’s retail marketplace. Polling shows that awareness of and trust in the Fairtrade mark are at the highest level they have ever been since the Fairtrade Foundation was established in 1992 and started polling on the views of the Fairtrade mark a couple of years later.

Traidcraft has been through a difficult phase—hopefully, it will emerge leaner and stronger with new investment in the new year—but the values that Traidcraft has championed enjoy greater support than ever in the UK. I hope that in his remarks, the Minister—I am pleased to see him in particular in his place for this debate—will confirm that the Department for International Trade will want to uphold those values as it develops future trade policy. Such decisions are crucial for farmers and producers in the least developed countries and in other developing countries around the world.

--- Later in debate ---

[The Minister for the Middle East (Alistair Burt)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. As we have heard, there is a huge amount of common ground on this topic. I congratulate the hon. Member for Blaydon (Liz Twist) on securing this debate on both Traidcraft and the future of fair trade generally, and I thank other colleagues for their contributions. I congratulate her in particular on the way she set out the relationship between Traidcraft and her constituency and those around it, and how Traidcraft’s values have infused people in her constituency and beyond. That shone out from the debate generally.

I suspect very few Members have not had a connection with Traidcraft and fair trade over the years we have been engaged in public life. I am sure many of us have been in draughty church halls and seen the work that is done. The right hon. Member for East Ham (Stephen Timms) illustrated vividly how we can turn those draughty church halls and book stalls into policy change in relation to fair trade. What he said about Sainsbury’s in St Lucia is a dramatic demonstration of what can be done when people set their minds to something. A thousand different opportunities picked up around the country can make a significant change. It was wonderful to hear that example. I think some people still feel as though all the big decisions in the world are made by remote organisations and worry about whether they can influence things. That is at the heart of queries about democratic practices, not only in this country but throughout the western developed world. That is an example of something good that can happen very much at grassroots level.

I am pleased also that tribute was paid to my good friend, Ram Gidoomal, who has been an influence on a variety of positive issues in this country for many years. I am delighted that such a friend of many decades is able to listen attentively to this debate. We certainly appreciate his relationship with Traidcraft and all he has done with it over the years. In my constituency, I have been to St Andrew’s Church many times with the Fairtrade group in Biggleswade, and churches throughout north Bedfordshire—particularly North Bedfordshire Methodist Circuit—have been very involved. We can pay tribute to those who have acted locally and nationally on this.

Let me proceed with my remarks, into which I will incorporate some of the comments made by colleagues. When Traidcraft was created in 1979, we undoubtedly lived in a very different time. Today’s hyper-interconnected world was just emerging, and more business was carried out using locally sourced products. Now companies operate through a complex and sophisticated web of supply chains that span the planet. Products are created and assembled across multiple jurisdictions, and delivered to our front doors within hours of us purchasing them online. We have much more understanding of who is creating the things we buy, and about the lives they live and the challenges they face. At the sharpest end, that leads to images of children working in sweatshops, or the appalling Rana Plaza tragedy in Bangladesh.

Today, ethically minded consumers shop in line with their values in numerous ways, for example by following a vegan diet, buying organic cotton or using social enterprises. The ethical market in the UK is now worth £81.3 billion per annum. Millennials, in particular, are spearheading the idea that companies should operate in a responsible way, and 66% say that they would pay more for sustainable brands—that paragraph was undoubtedly written by one of my millennials, but those of us who are older also recognise that we played our part in the past by supporting Traidcraft and Fairtrade, and the way they got going. There is no doubt, however, that that pioneering work by the previous generation has been well picked up by the millennials of today, and we congratulate them on taking it forward. In the late ’70s, Traidcraft was one of the first organisations to shine a light on the working conditions of those who made our products. That is a vital legacy, and a theme that continues through the work of commerce today.

[Stephen Timms]

I am enjoying the points the Minister is making. Will he also pay tribute to the role of Traidcraft in establishing standards for corporate reporting? I think Traidcraft was the first plc to publish a proper social impact report, which was very influential across the entire plc sector.

[Alistair Burt]

I will indeed. Such reporting has increased the sense of responsibility not only of companies, but of consumers who ask the right questions and ensure that those delivering products recognise the need to respond to their concerns. Those reporting changes were fundamental.

The influence of Traidcraft and Fairtrade is felt not just in hundreds of churches and community centres across the country where their products are a mainstay, or in the growth of the wider fair trade market, but across millions of consumer decisions in the UK that are made with sustainability in mind. The hon. Member for Strangford (Jim Shannon) spoke about values, and it is no surprise to those of us who have had contact with him to learn where his values come from. I cannot think of a better fit between an individual Member talking about his upbringing and the values he incorporates into his life, and what he does constantly in this House through his remarks and determination to secure the best of human rights, tolerance and fairness. It is a great mix, and I am not surprised at his connection with Fairtrade.

As the hon. Member for Blaydon said, Traidcraft has reached a crossroads in its journey, and with so many ways for consumers to express their values, it is rightly looking to explore new ways to improve the lives of poor people across the world. We wish Traidcraft well. The hon. Lady concluded her remarks by speaking of the ray of hope mentioned by the worker who also spoke of a new challenge, and undoubtedly that challenge will be faced with the same degree of determination that was possessed by those who set off on this course in the first place. I therefore hope we can have confidence for Traidcraft in future.

Wherever this challenge leads the organisation, it is important that the rest of us continue to strive for the principles that shine through its work—to ensure that trade is inclusive and sustainable, that any jobs created are quality ones, and that developing countries can truly grasp the opportunities of trade to reduce poverty and build a safer, healthier, and more prosperous world. In that, the work of the Department for International Development, alongside the Department for International Trade, is key, particularly at this critical moment in our history. DFID initiatives, such as the responsible, accountable and transparent enterprise programme—I will say more about that later in my remarks—work to promote responsible and sustainable business standards, and to identify and tackle modern slavery and child labour in global supply chains. With more than 40 million men, women and children trapped in modern slavery around the world, that is vital work. We must continue to tackle permissive environments that enable the criminality of modern slavery to thrive, which includes supporting businesses to clean up supply chains in key sectors where slavery persists.

Let me turn to some of the questions raised during the debate. The hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) and other colleagues spoke about the impact on this issue of our leaving the EU. As we leave the EU, the UK has a unique opportunity to shape our trade and development work for the benefit of developing countries, and I am proud of the work taking place across the whole of Government to ensure that development and global prosperity are at the heart of future UK trade .

[Stephen Timms]

Will the Minister give way?

[Alistair Burt]

I will, although I have more to say.

[Stephen Timms]

I am grateful. The Minister may well have been about to answer this point, but the Government have confirmed that they will continue to provide the poorest and least developed countries with quota-free, duty-free access to the UK market, which I welcome. Can he give any reassurance to producers in other countries—not the least developed, but poorer countries— that EU-negotiated economic partnerships and free trade agreements will be rolled over so that after Brexit, producers in those countries will continue to have the access to the UK market that they currently enjoy?

[Alistair Burt]

Clearly the right hon. Gentleman has had prior sight of my remarks if he is asking such a perceptive question at this time. I will come to that issue in a moment.

Our immediate priority on leaving the EU is to deliver continuity in our trading arrangements, so that developing-country firms exporting to the UK do not face new and damaging trade barriers—that is one benefit of securing a deal on leaving the EU, rather than no deal, and the Government will determinedly strive for that, as will all Ministers. To that end, we will put in place a UK trade preferences scheme that will, as a minimum, provide the same level of access as the current EU scheme by granting duty-free, quota-free access to 48 least developed countries, and generous tariff reductions to around 25 other developing countries. We will also seek to replicate the effects of the EU’s economic partnership agreements, which are development-focused trade deals with African, Caribbean and Pacific countries. We aim to maintain the preferential access to UK services markets for least developed countries that is guaranteed through the LDC services waiver—that, I was pleased to note, is a better deal than the one currently offered through the World Trade Organisation, which is an important consideration.

As well as maintaining preferential trade access for around 100 developing countries, those trade arrangements also embed the principles of inclusive and sustainable trade that Traidcraft and others have long argued for. For example, the UK’s trade preferences scheme will include an enhanced tier similar to that of the EU, which grants special tariff reductions to developing countries in return for progress against ratifying and implementing international conventions on human rights, labour rights, the environment and good governance.

More trade does not have to come at the expense of workers, the environment, human rights or the growth of least developed countries, and the Government firmly believe that it is in everyone’s interest to avoid any kind of race to the bottom on standards. That point was at the heart of the remarks by the hon. Member for Birmingham, Edgbaston when she asked what more might be included in deals, and my sense is that as these opportunities evolve, we should all press for the highest standards. As I said earlier, we have a minimum baseline, but that is not where the United Kingdom should be. We should be able to operate to higher standards, and we should work through them. My sense is that DFID and the Department for International Trade recognise that and wish to ensure it is the case. There is much work to do for these new agreements, and the House would not be fair if it took the bottom line minimum standard that we “must” have in place as our intention or ambition, because I am sure we will be keen for it to be developed.

The hon. Member for Strangford asked about modern slavery, and I shall say a little more about that. At last year’s UN General Assembly the Prime Minister launched the “Call to Action” to end forced labour, modern slavery and human trafficking, in which specific commitments are set out, to address modern slavery at the national and international level. It has been endorsed by 43 countries[Official Report, 7 January 2019, Vol. 652, c. 2MC.] so far. On the International Day for the Abolition of Slavery, my right hon. Friend the Secretary of State for International Development announced a £40 million package of new funding, forming part of the overall £150 million spend that the Prime Minister committed the Government to at the UN. That package of support will help more than 500,000 vulnerable men, women and children, and includes £13 million for the second phase of the work in freedom programme, the UK’s £20 million contribution to the global fund to end modern slavery, and the £7 million of DFID support to Nigeria.

That is all in addition to existing DFID programmes such as the £8 million regional women and girls protection programme operating in Greece and the Balkans, protecting girl and women refugees by providing shelters and strengthening national counter-trafficking mechanisms, and the £22 million¹ responsible business programme, which is spreading responsible business approaches. That international strategy, overseen by the Prime Minister’s taskforce, has the aim of driving down slavery in source countries to the UK, and others of high prevalence, and effecting change through multilateral channels.

[Alistair Burt]

My remarks have gone even wider than the copy that was obviously supplied to the right hon. Member for East Ham. DFID has recently updated its supplier code of conduct to require companies to sign up to the UN global compact, thereby promoting responsible businesses and committing companies to take action to address such issues. Responsible business is about more than just small or one-off projects that create win-win outcomes for business and society; it is the expansion of firms’ core business in developing markets, embracing socially and environmentally positive conduct through supply chains. That is why we have updated the code. We are encouraging businesses to contribute to economic development in ways that are socially responsible and environmentally sound, and that help to defeat modern slavery.

Hon. Members raised the question of gender focus, and all DFID private sector work goes through a gender lens. We recognise the changes that have taken place, as well as the particular pressures on women when working through these issues. The Commonwealth Development Corporation has a gender strategy, and DFID has its Work and Opportunities for Women programme. As I have explained, there are specific programmes directed at supporting women.

The hon. Member for Blaydon asked us to consider legislation to make human rights due diligence mandatory. That is a matter on which we must encourage, rather than legislate. We are encouraging better reporting on human rights, through grants to Shift and the Ethical Trading Initiative. We also rank human rights performance through corporate human rights benchmarking. We do not have plans at present to make that mandatory through legislation. It would be difficult to enforce. However, the question of how to promote that and to work with others on it is much on our minds. I think that is important.

There is more we must do to ensure that the benefits of trade are spread widely, levelling the playing field for those on the margins. That is important between countries, which is why the Government have a range of programmes to support the least developed countries to benefit from global trade, including our flagship trade facilitation programme TradeMark East Africa, and the recently launched Commonwealth Standards Network.

[Stephen Timms]

The Minister is being generous in giving way. May I press him a little further on the question of access to the UK market for developing countries other than the least developed? I think what he has said to us is that the Government’s aim is to make sure that after Brexit, access will be available to other developing countries at least at the level provided by EU-negotiated economic partnership and free trade agreements. Can he confirm that that is their intention?

Will the Minister also tell us a little more about what the Government are doing to ensure that that aim can be delivered? For example, why can they not simply announce, “Yes, everyone is going to carry on with the access they have at the moment”? Perhaps he can tell us a little more about the mechanics of what needs to be done to deliver on the aim he set out, which I very much welcome.

[Alistair Burt]

What we have been able to say publicly is what I stated just now about the bottom line and the roll-over of existing agreements. As to the aspiration, plainly that must come through the work that will be done to develop individual arrangements with states post Brexit. I am not sure there is any more detail that I can provide at this stage. If there is on reflection, I will write to the right hon. Gentleman and make it clear.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and the hon. Member for Birmingham, Edgbaston asked what DFID already does, why we do what we do and whether we could do more. Perhaps I may take colleagues through the responsible, accountable and transparent enterprise programme that I mentioned earlier. RATE is our primary mechanism for promoting responsible and sustainable business standards. It works through providing accountable grants to organisations such as Fairtrade, the Ethical Trading Initiative and the ISEAL Alliance to work with businesses to improve their performance on the relevant issues. RATE also delivers DFID’s main offer on identifying and tackling modern slavery and child labour in global supply chains.

To go into some of the details, through Humanity United’s Working Capital fund we are providing seed funding to early-stage technology initiatives aimed at increased transparency in supply chains, including Provenance, an app that tracks the journey of a product from the source to the shelf. We are also partnering with ShareAction on the Workforce Disclosure Initiative, a global coalition of investors with more than $13 trillion of assets under management, which is demanding better data from its portfolio companies on workforce practices. DFID is also a founding donor of the World Benchmarking Alliance, the world’s first publicly available set of corporate benchmarks—to reinforce a point made by the right hon. Member for East Ham—that will rank multinational companies on their contribution to the sustainable development goals. Through our grant to the Ethical Trading Initiative, we are helping companies such as Tesco and ASOS to uphold the ETI base code to eradicate modern slavery in their supply chains and ensure that purchasing practices are fair. We are ensuring that workers at the bottom of the supply chain know their rights and can exercise their voice through worker participation mechanisms.

In all those ways, DFID is working to deliver what has been called for in this debate, and we intend to continue to do so. New opportunities are coming in the future. As the House will know, I am very much in favour of a deal—an agreement—that means that if we are to leave the EU, we leave it on good terms that are beneficial to us and to those we work with, and that maintain the highest standards. It should not be impossible to do that. The United Kingdom, both within the EU and outside it, will not get involved in a race to the bottom—or certainly not with the support of the Government and the vast majority of Members. Fair trade, and the work that is done on it, will be a good test of how the UK of the future moves forward and meets the challenges.

A thought has come to me about the question raised by the right hon. Member for East Ham. I assure him that we are maintaining access and considering opportunities to make improvements once we have left the EU. As I mentioned, I may write to him and clarify the matter further.

More trade on fair terms is a key engine of poverty reduction. The Government will build on their track record on trade for development, we will continue to be a champion of free and inclusive trade when others may have turned their backs on it, and we will not shy away from issues of injustice or exploitation where they arise in the system. We cannot do that alone, however. Real progress will be based on partnership between Government, business, and, of course, movements such as fair trade that focus public attention where it is needed. We must all work together to create a trade system that works for everyone, including the poorest, and that eliminates poverty through inclusive economic growth.