My Lords, I am pleased to follow the noble and learned Lord, Lord Hope of Craighead, albeit after several days’ rest from this marathon Committee stage. He has taught me a great deal in this House.
I am a supporter of the World Trade Organization and its predecessor, GATT. Trained as an economist, I know that trade brings great benefits in terms of world prosperity, as is convincingly explained by the theory of comparative advantage. This is particularly important when we face recession and the shock of the Covid pandemic affecting every corner of the globe. As noble Lords know, I am an advocate of well-informed consultation. However, we must have regard to WTO rules, and I doubt that these suggestions are compatible with them. The UK benefits greatly from the international order and enduring economic ties, especially in free trade. In closing, the Minister may want to comment on whether the amendments in this group could fall foul of WTO rules.
My Lords, Amendments 264 and 265 in the name of the noble Lord, Lord Foulkes of Cumnock, relate to the WTO Agreement on Agriculture. The noble Lord made the case for the Secretary of State to be required to consult with relevant stakeholders before making regulations for the purpose of securing compliance with the UK under the Agreement on Agriculture. As always, he set out his case with great clarity.
The second amendment removes the power from the Secretary of State to allow others to make the decision for him or her, or to delegate to others and any other person who might exercise discretion in this matter. The noble Lord, Lord Foulkes, does not believe that the reason for these powers is clear. There is no explanation of what they may be used for.
Amendment 269 in the name of the noble Lords, Lord Hain and Lord Wigley, would insert a new subsection at the end of Clause 42. As the noble Lord, Lord Hain, set out so clearly, this supports delivery of Welsh animal and plant health, food safety and environmental standards, which should not have the effect of lowering these below EU standards. The noble Lord is concerned about the large areas of Wales that are heavily dependent on agriculture. Food standards are extremely important for sustainable food production. The noble Lord, Lord Wigley, said that there are opportunities for agriculture in Wales and that building on food standards will be important. The products in Wales stand up against produce from the rest of the world.
The noble Baroness, Lady McIntosh of Pickering, supported these amendments—particularly Amendments 264 and 265 —and believes that this is a genuine oversight. The noble and learned Lord, Lord Hope of Craighead, also supported the noble Lord, Lord Foulkes.
My noble friend Lord Purvis of Tweed feels that the regulations are concerned with WTO compliance. Is this compliance of Scottish and Welsh farmers for their benefit or for the benefit of English farmers? My noble friend had discussions with the Trade Minister about continuity agreements but did not get reassurance. Can the Minister confirm that these regulations will not be used in negotiations with the US? We seek that reassurance.
I thank my noble friend Lord Foulkes for leading the debate on this group of amendments—relating to Part 6 and the WTO Agreement on Agriculture—by moving Amendment 264, to which the noble Baroness, Lady McIntosh of Pickering, added her name. As is customary on each day of the Committee’s deliberations, I declare my agricultural interests as recorded in the register.
The United Kingdom has been an independent member of the World Trade Organization, and was also a member as a member state of the EU, when it was one. On leaving the EU, the UK will continue to ensure that domestic support schemes are consistent with WTO rules. The Minister will correct me on this interpretation if needed.
The Bill’s Explanatory Notes remind me of the non-distortion trading requirements of green box designations and so on, which characterised the discussions on CAP reform of decoupled income support payments and environmental programmes many years ago. This will not be the issue at the WTO once the UK begins to “record”, if that is the correct terminology, the various trade deals that it seeks with other countries around the world. There will be many challenges over, for example, state aid provisions. As we know, the countries implicated in the various EU rollover deals that the UK seeks ratification of have already lodged objections with the WTO.
There are various angles to this, as other speakers referred to in our proceedings last week. First, as my noble friend Lord Foulkes explained, his amendment would require the Secretary of State to consult relevant stakeholders. That is necessary as agriculture and food are matters devolved to the other nations of the union. In Amendment 269, my noble friend Lord Hain and the noble Lord, Lord Wigley, are concerned about compliance and consistency with the Well-being of Future Generations (Wales) Act 2015 and the Environment (Wales) Act 2016, specifically with regard to the sustainable brand values of Wales.
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Finally, the WTO Agreement on Agriculture has long been seen as disadvantageousfor developing countries, even though there are slightly different rules for such countries. There are strong arguments for being more sensitive to this and for other features of trade to be more beneficial towards development. Does the Minister see the inclusion of these powers in this Bill as being able to contribute to that goal in some way? How would the future role of the Government be made effective in reconciling their interests, as well as reconciling different ambitions of agriculture among the big trading blocs and developing countries?
My Lords, I thank all noble Lords for contributing to this interesting debate, and particularly the noble Lord, Lord Foulkes, for his amendment. I declare my farming interests, as set out in the register.
Part 6 of the Bill allows regulations to be made to ensure compliance with the United Kingdom’s obligations under the WTO Agreement on Agriculture. I should say immediately to the noble Lord, Lord Grantchester, that Defra and the Defra Secretary of State will be responsible for the WTO Agreement on Agriculture. To be clear, the Agreement on Agriculture is an international treaty that sets out a number of general rules and commitments on agriculture trade practices, as agreed by WTO members. These measures fall under three pillars, the domestic support pillar being the focus of Part 6. The regulations will set out procedures and arrangements to ensure that the UK as a whole complies with existing obligations under this international treaty.
We have a bilateral agreement in place with the Welsh Government on the making and operation of regulations under Part 6, and we have offered to extend this agreement to the Scottish Government and DAERA Ministers in Northern Ireland. In practice, we are already working very closely with officials from all Administrations on drafting regulations under these powers. As the noble Lord, Lord Grantchester, raised it, I can report that good progress has been made and that officials from all four Administrations are working together to finalise a draft of the regulations. A concordat will shortly set out the detail of administrative arrangements and other routine matters, in order for these regulations to be in place for the end of the year.
Furthermore, my honourable friend the Farming Minister, Victoria Prentis, placed on record in the other place a commitment to consult with the devolved Administrations on the making of the regulations under Part 6. We have therefore already given strong assurances of our commitment to consult with the devolved Administrations on the making of regulations under these powers.
My Lords, I am grateful for the Minister’s fulsome response, which is characteristic of him, as well as for the good news that the talks are progressing well. No doubt we will have an opportunity during the remaining stages of the Bill after the Recess to see how well they have gone.
I wanted to come back after the Minister. I hear what he said and we have heard, not only on this piece of legislation but previously on the Trade Bill—which we will come back to—Ministers saying from the Dispatch Box that they have good intentions of consultation with devolved Ministers. However, we have seen that they have had to apologise for not carrying out consultation, including on the continuity agreement on the Faroe Islands, which was so obviously an issue which linked with Scottish Ministers, and which was not carried out. That is why this House is right to continue to press this case.
I have two questions, which arise from the Minister’s full response. The first relates to the fact that the determination for these regulations will still be made by a UK department, which means, in effect, an English department. Are the Government closed to there being a distinct process, separate from a UK government department, which would look at WTO and state aid compliance? The noble Lord, Lord Grantchester, was correct to say that these issues are linked with state aid issues. I know there is an ongoing question as to whether this should be dealt with by a UK government department or a separate body that looks at compliance. Is the Government’s mind closed on that?
The second question relates to the WTO. As Clause 40(5) states, this is about compliance with
“’the Agreement on Agriculture’ … (as modified from time to time).”
The noble Lord, Lord Grantchester, indicated that there are live discussions at the moment, especially with those developing countries that seek both changes to the Agreement on Agriculture and potentially a new agriculture agreement. With regard to the Trade and Agriculture Commission which is launching today, can the Minister indicate whether, as part of its remit to report to the Government, it will consider the ongoing discussions at the WTO about either a successor to the Agreement on Agriculture part of the WTO agreement or significant modifications to it? If there are modifications to it, there will have to be a new set of regulations to ensure that the UK is also compliant.
My Lords, I hope I have been very clear that we are dealing with a situation where ensuring WTO compliance is a function reserved not to the English Parliament but to the UK Parliament. I have also said, and demonstrated by the active discussions already ongoing within the four nations, that this is a matter on which we place great importance and on which we are working together. However, I emphasise that this is a function reserved to the UK Parliament. That will continue to be the case as we collaborate with the devolved Administrations. We have come to a bilateral agreement with the Welsh Government, and we await the Scottish Government and DAERA Ministers—our work has been successful and collaborative.
On any future development of the Agreement on Agriculture and the WTO agreement, we would all of course have to be mindful of what any such changes would be. At the moment, there are three distinct pillars of the Agreement on Agriculture, and I cannot crystal-ball-gaze as to what may happen in the future. The bottom line always is that the UK Government would have to be compliant and have to work to ensure compliance, as is their responsibility. The point that I have always made is that this is done, and should be done, working with all parts of the United Kingdom, so that this is of benefit to all parts of the United Kingdom. That is of course one of the strengths of having a United Kingdom.
My Lords, a great deal has happened since I moved this amendment at twenty minutes to midnight, last Thursday. I must say I am particularly glad that I did not try to spend the weekend in Spain, so here I am in Edinburgh, able to respond to the points that have been made during the debate.
There has been one very encouraging development over the weekend. I have been approached by the special adviser to the rural affairs Cabinet Secretary in the Scottish Government, seeking to work closely with us in considering amendments in Committee and on Report. This is a very good development. I pointed out that the Minister earlier on Thursday did say that he would talk with his colleagues about further meetings with the various Governments between Committee and Report. I also pointed out that a number of Scottish Peers are interested in this Bill—my noble friend Lord McConnell, the noble Lord, Lord Purvis, and the noble and learned Lord, Lord Hope, and many others. If we as Back-Benchers co-operate and discuss things with the Scottish Government, that can only be of assistance in opening up agreements between the United Kingdom Government and the devolved Governments. I am certainly willing to be very helpful and as co-operative as I can.
Since this is the last time I am speaking, I thank the Minister for his usual courtesy—he is unfailingly courteous to us all in these debates—and the Minister and shadow Ministers for their diligence. They have been really diligent during the course of this Committee. I also add my thanks to the Public Bill Office and the Government Whips’ Office, which have been really helpful to those of us who have moved amendments. In what is a new and difficult procedure for us all, they have really helped. I am sure other Members who have moved amendments will agree with me on that.
Having said all that, I look forward to returning on Report to the points I have raised during the discussion on this amendment. Meanwhile, I beg leave to withdraw the amendment.
Amendment 264 withdrawn.
Amendments 265 to 267 not moved.
Clause 40 agreed.
Clause 41 agreed.
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In other parts of the Bill, we have expressed our concern at the quality of the Government’s discussions with the devolved Administrations and how that will translate into representations at the WTO. The noble Lord, Lord Purvis, expressed this point in his remarks. Last Thursday—I remind noble Lords that this was at 10 minutes to midnight—he asked the Minister to clarify the status of the legislative consent Motion from the Scottish Parliament with regard to this part of the Bill. Regulations could have a significant impact on the design and implementation of support schemes in Scotland and Wales—by the way, no one has yet seen the full details of those schemes because the Government are yet to finalise them. By what mechanisms will the Secretary of State resolve any disputes that may arise with the devolved Administrations, such that he or she can fulfil the functions of Clause 40? Can the Minister confirm that any regulations made under the powers at Clause 40 will be only with the express agreement of the Scottish Parliament and the Welsh Assembly by the affirmative resolution procedure, as in subsection (4)?
My noble friend Lord Foulkes also asked about subsection (3), which may have relevance in this respect. However, the power under Clause 40(3)(c) seems inexplicably wide and vague. I also have concerns about paragraph (c), which refers to provision for “a person”—unspecified—
“to exercise a discretion in dealing with any matter.”
No provision seems to have been given for any oversight or reporting publicly. Can the Minister explain what the Government have in mind in needing these powers?
The clause refers to the Secretary of State. It may be assumed that, as this is the Agriculture Bill and the responsibility of the Minister’s department, this will not be the Secretary of State for the trade department. Which Secretary of State will be responsible to Parliament on this matter? Where will the cross-over apply in relation to WTO engagement?
In reply to the noble and learned Lord, Lord Hope, I reiterate that the Government fully recognise the devolved status of agriculture. That is why Clause 40(1) makes it clear that regulations can be made only for the narrow purpose of ensuring WTO compliance, a function that is reserved to the UK Parliament. Consultation with the devolved Administrations in cases such as this is a matter of good practice, and is done regularly on many matters. While it is usual practice to place commitments to consult on the record, as we have done in this case, we certainly do not wish to signal that consultation with the devolved Administrations will be carried out only where there is a legislative requirement. Indeed—and I hope noble Lords will understand this and will have seen this—Defra has a strong record of consulting the devolved Administrations where appropriate.
Amendment 265 seeks to remove the part of the clause which will allow functions to be conferred or delegated by the Secretary of State, or provide for a person to exercise discretion in dealing with matters relating to Part 6. Again, this was a point that the noble Lord, Lord Grantchester, raised. This amendment would prevent the Secretary of State delegating routine matters, such as the collection and collation of information related to support schemes for agriculture. It is quite proper that routine matters such as data gathering can be delegated to independent bodies. For example, certain data on farm subsidy payments is currently collected for all four Administrations by the UK Co-ordinating Body—an arrangement that works well for all parties. The intention of Clause 40(3) is to mirror existing arrangements as far as possible, to ensure a smooth and efficient process for all Administrations.
In our debate on these amendments on Thursday, the noble Lord, Lord Purvis of Tweed, asked about the policy framework for limits on the regulations. I can confirm that discussions have been held with the devolved Administrations outlining our intention to put in place limits which will enable them to maintain existing levels of agricultural support spending, if they wish to do so. Any impact on the design and implementation of schemes will therefore be limited to measures to ensure that schemes do not breach WTO obligations. The opening subsection makes it clear that the power can be used only for ensuring compliance with WTO rules.
The noble Lord, Lord Purvis, also asked about the future classification of agricultural support. As an independent WTO member, the UK will continue to have the same rights and obligations as the EU under the WTO Agreement on Agriculture, and will retain the same avenues for challenging disputes raised by other WTO members. It is of course important that we get classifications right to avoid any risk of challenge. That is why Clause 42(3) allows for provision to be made for a process for the appropriate authorities to decide how different types of domestic support should be classified.
The noble Lord, Lord Purvis, also asked about the status of the LCM in the Scottish Parliament. In May, the Scottish Government recommended legislative consent for all provisions that apply to Scotland and that those we maintain are in scope of the Sewel convention, except subsections (4) and (5) of Clause 42, which have now been removed by Amendment 268, in my name. Defra Ministers have written to their counterparts to inform them of the changes. We await the view of the Scottish Parliament, which is currently in recess.
On Amendments 266 and 269, and in response to the question raised by the noble Lord, Lord Purvis of Tweed, during Thursday’s consideration, Part 6 deals exclusively with ensuring UK compliance with the WTO Agreement on Agriculture, as laid out in Clause 40(1). None of the areas cited in Amendments 266 and 269, or raised by the noble Lord, Lord Purvis of Tweed—including animal welfare, food labelling, animal health, hygiene standards, plant health standards, food safety and traceability for agricultural products, and environmental standards—are within scope of the Agreement on Agriculture. As such, it would not be possible for regulations on these amendments to be made under Part 6. In reply to my noble friend Lady Neville-Rolfe, my understanding is that the amendments are compatible with WTO matters. However, I hope that the pragmatic points I have raised on the amendments in this group assure her that the Government seek to ensure the very important compliance with the WTO rules.
I hope that, with the reassurances I have given, the noble Lord, Lord Foulkes, will feel able to withdraw his amendment.