That this House takes note of the Free Trade Agreement between the United Kingdom of Great Britain and Northern Ireland and Australia, laid before the House on 15 June.
Relevant document: 4th Report from the International Agreements Committee (special attention drawn to the agreement)
My Lords, I thank and pay tribute to the very recent Trade Minister, the noble Lord, Lord Grimstone, who worked very closely and openly with the committee, not just to facilitate our access to documents and briefings and to answer our many questions, but to negotiate within Whitehall that very welcome exchange of letters on how future trade deals will be handled. Of course, his resignation, rather different from the other 60, except for that of the noble Lord, Lord Greenhalgh, took place on Friday, and was not to get rid of Prime Minister Johnson but was a result of Mr Johnson’s leaving. In the Lords, we always do something a little different.
Having gone through four Ministers when I was dealing with Brexit on the Front Bench, and having now lost a Trade Minister in my new role, I am beginning to take this slightly personally. However, I welcome the noble Viscount, Lord Younger, to the wicket. I hope that he found time during the Wimbledon finals—sorry, Australia—to peruse the 2,000-page document on the Australia deal, and that “team Grimstone” will be there to help him answer our many questions.
This debate is important for three reasons. First, and most obviously, it is the first time that this House has debated a new, post-Brexit trade deal which is not just a rollover from our EU days but is a from-scratch, non-European trade agreement. Secondly, it gives the House a chance to consider the deal within the Government’s wider diplomatic, defence, foreign affairs, environmental and domestic objectives—at least, it would be good to debate it within that context if only the Government had set out a trade policy which went wider and beyond the nebulous “global Britain”, which is simply about more trade. Thirdly, again from it being a novel agreement, and the first since 1973 for which our Government have had responsibility and come to our committee, it gives the House the opportunity to consider whether our ability and our powers to scrutinise negotiating objectives and the resultant deal are sufficient for the task given to us.
Beginning with the first of those points, the actual deal: how do we assess it? The International Agreements Committee welcomes the agreement, especially the provisions facilitating trade in services, including financial and legal services; mobility; digital; consumer protection; and its support for SMEs. In particular, improved mobility for UK professionals seeking to work in Australia, a new framework on mutual recognition of professional qualifications, and the ban on data localisation, are all likely to be beneficial. We note, as the Government acknowledge, that the expectations of increased trade are not enormous—0.08% of GDP by 2035—and only very slight in goods, given that existing Australian tariffs are already very low.
However, the deal has other advantages, not least in helping pave the way for the UK’s potential entrance into the CPTPP. It was right for the Government to prioritise Australia as a segue into that. However, we queried whether the desire for speed reduced the chance of obtaining more from the negotiations, and we highlighted the fears of many in our farming communities, particularly in Wales, Scotland and Northern Ireland, that they may have been sold short, with safeguards for their produce insufficient for the new competition they could face, particularly given the differences in Australian farming practices.
My Lords, I offer congratulations to the noble Baroness, Lady Hayter, on securing this debate. I am sure that anybody who has read the report will have something to say about it. I declare my interest as a member of the NFU in Scotland, a former president of the National Sheep Association and a long-term sheep farmer.
The UK-Australia Free Trade Agreement has, inevitably, been a baptism by fire for the Trade and Agriculture Commission. The fact that the International Agreements Committee’s report, including at paragraph 70, states that its findings in a limited number of areas were mainly positive makes one wonder whether it has an adequate remit to do the job that we expect of it. The briefings I have had from several agricultural bodies said quite the opposite. In its call for evidence from the agricultural community, the TAC’s main question was whether the agreement would affect the maintenance of the UK’s regulatory standards in animal or plant health, welfare or environmental protection. From that, it appears that we have is a regulation and agriculture commission and not a Trade and Agriculture Commission. Would my noble friend the Minister not agree that the remit should ensure that greater emphasis is placed on trade for any future reports?
The only reference to agricultural trade that found its way into the report we are debating today is the government estimate that the agreement would lead to a 0.07% drop in gross value added for agriculture, forestry and fishing. Then it mentions that the fall expected in the price of beef and sheep products is up to six times that value. As far as I can see, most sections of the agricultural industry have made their excoriating views known whenever they had a chance. The NFU’s brief sums it up by saying that it is a one-sided deal, with Australians achieving all that they ask for and British farmers sacrificed for political gain.
There are great misgivings at the promise of achieving a zero-tariff regime for this and subsequent trade deals, though presently it will be cushioned by a 16-year lead-in period. Even in our agreement with the EU, where we have a much more level playing field, if we exceed our tariff rate quota for beef, I believe we would be subject to a 20% tariff. Can my noble friend the Minister say whether the most favoured nation rules of the WTO will mean that any agreement hereafter with other countries will be required to follow this pattern, or will zero tariffs be the rule?
My Lords, I declare my interest as a member of the UK hydrogen commission. It is a pleasure to speak in this debate and, as a member of the International Agreements Committee, I pay particular tribute to our chair, the noble Baroness, Lady Hayter, and to our committee clerk Jennifer Martin-Kohlmorgen and her team for producing such an informative report.
I regret that the noble Lord, Lord Grimstone, has stood down from his ministerial post, although, like the noble Baroness, Lady Hayter, I am surprised that it was because Boris Johnson was leaving rather than because he was staying—a decision entirely beyond my comprehension, I have to admit. Nevertheless, the noble Lord was a capable Minister who engaged constructively with our committee, and we will miss him in our deliberations.
I intend to focus most of my remarks on the environment chapter of the Australia FTA but, before I do so, I want to touch briefly on the wider context of the deal and the circumstances in which it was concluded. We are debating this free trade agreement against the backdrop of a catastrophic decline in the UK’s trade performance. Just last month, we learned that the current account deficit stood at a staggering 8.3% of GDP in the first quarter of 2022—the worst figures ever recorded. This has further weakened sterling and added to upward pressures on inflation.
As Howard Dean, the former candidate for the Democratic presidential nomination, once remarked:
“Unfortunately, ‘I told you so,’ is an incredibly unsuccessful campaign slogan”.
Of course, he is correct, yet the Brexiteers in this House and the other place cannot be allowed simply to slip away from the devastating consequences they have inflicted on our country and its economy; nor is it any good for them to try to blame Covid for our woes, because our trade performance is shocking not only in absolute terms, it is even more so in comparative terms. The Government’s own assessment predicts that the UK-Australia FTA will have a positive impact on GDP, as we heard from the noble Baroness, Lady Hayter, of 0.08%. This is a welcome, albeit modest, contribution to our national wealth but it hardly lives up to the deluded imperial nostalgia of the Brexiteers, who seem to think that the old empire was just waiting to fill the trade gap left by Brexit.
My Lords, I draw attention to my entry in the register. I am involved with a number of Australia-facing organisations, not least as a non-executive director of the Australian Chamber Orchestra. Having said that, I do not look at the situation of our trade deal with Australia through rose-tinted spectacles—I will come to that later. I pay tribute to our chair and our previous chair, the noble Lord, Lord Goldsmith, and to the team of civil servants and advisers who have helped with the complexity of this—we are doing these trade deals for the first time in a very long time.
A week is a long time in politics. The shenanigans of the past week affect all of us, and it is not for me on this side of the House to cast aspersions elsewhere, because everyone who is involved in the political process has suffered as a consequence of what has happened over the past few weeks. This spotlight on British politics affects all of us: there are questions about professionalism, integrity and competence. Every one of us now has to show that we live by the Nolan principles and that our partners can deal with us, knowing that we are not just competent but ethical, which is why we have to adopt a serious and informed view of trade deals such as this.
I want to get rid of the hyperbole that has surrounded the publication of this deal. It is historic—okay, it is the first one, so that is fair enough. But, frankly, if a Conservative Government in the United Kingdom cannot not do a deal with a Conservative Government in Australia, no doubt with some Australians who have a right to British citizenship—more of that later—they should give up the ghost.
Hyperbole comes up when we discover how much has been left out of the agreement. Previous speakers’ points on the climate emergency—notably those of the noble Lord, Lord Oates—and the problems with animal welfare brought up by the noble Duke, the Duke of Montrose, are really serious. I agree with much of what the noble Duke said; standards are lower.
It is a pleasure to follow the noble Baroness, Lady Liddell. She is always trenchant and always expert and was extremely popular in Australia when she was high commissioner there; she is popular at this end too. I follow her part of the way. I certainly follow her in her tribute to the noble Baroness, Lady Hayter, for conducting our debates with such skill and style and, as usual, pinching all the points I was going to make today—although I am sorry to tell the House that I will make them all the same.
I pay tribute to the noble Lord, Lord Grimstone of Boscobel, whose dialogue with us, although it was not always very deep, was carried out with impeccable courtesy at all stages. I also had the feeling that he might know what he was talking about and that he might have liked to tell us a bit more than he was allowed. I hope that he will be back in order that I can test my theory.
If this report is a good one, and I think it is, that owes a great deal to the help that we in the committee had from our clerk, Jennifer Martin-Kohlmorgen, and our policy analyst, Andrea Ninomiya. My thanks to them.
I am less critical of this agreement than most of those who have spoken so far. The key point to make for perspective is that it is no big deal. The Government themselves maintain that its economic effects, although probably positive—trade liberalisation usually is—will be extremely marginal. In my view, it is not a bad deal; liberalising is generally a good thing to do, and there are genuine gains in this agreement for UK exporters of services.
On goods, of course, there is absolutely no doubt that the deal massively favours the Australians, principally because their own tariffs were already very low. It was hailed in Australia as splendidly asymmetrical, and their negotiators were congratulated on achieving the impossible. They believe that the greater market access that they have secured here for their agriculture producers will result in economic gains to them—so they share some of the views that the noble Duke, the Duke of Montrose, put forward. They would argue that the hill farmers in Scotland, Wales and Northern Ireland are right to be concerned about this deal. I think that the hill farmers are right to be surprised about it, because there was no attempt to prepare the ground—it came as a shock to them—but I do not believe that they will be hard hit in the end because, for Australia, the Asian market will always be the principal one for farm products. It is a pretty inexorable rule in trade in goods that trade halves as distance doubles. Overall, this deal is no big deal but no bad deal.
My Lords, it is a great pleasure to follow the noble Lord, Lord Kerr, with whom I used to sit on this committee. We sparred a little; he particularly did not like my suggestion that smoking in the committee should be banned, even when it was on Zoom. But never mind—I think other members of the committee will understand that.
I, like him, am broadly philosophically a free trader—not totally, but broadly philosophically one. I thought I would be the first person speaking in this debate to welcome the free trade agreement but the noble Lord, Lord Oates, welcomed it, albeit with quite a few reservations. I do welcome it, wholeheartedly. The report, which I have read is mostly—this is not meant to be condescending—extremely sensible and raised some very reasonable points.
I was on the committee at the beginning of the investigation. It was extremely well chaired by the noble and learned Lord, Lord Goldsmith, and I regret that he has felt the need to stand down from the House of Lords because of rather controversial issues about declarations. I thought he was a really good chairman and extraordinarily balanced. I am sure the noble Baroness, Lady Hayter of Kentish Town, is similarly balanced and a good chairman, but I have no experience of that.
I shall just explain why I left the committee, which is slightly illustrated by this debate. I left because I was too often the sole voice on the committee who wanted the trade agreements to work. I am afraid that too many on the committee wanted to see post-Brexit trade deals fail because they wanted Brexit to fail. I found this extremely sad because I am interested in the good of this country, not in party-political—or whatever—machinations.
This UK-Australia trade deal is far from perfect—we have heard about a lot of the defects in it—but please show me a free trade agreement that is perfect. When we were in the European Union, the EU agreements were extraordinarily torturous and slow, often reaching no conclusion at all, not least because they were trying to satisfy 26 or 27 members of the EU. They were looking after French farmers, for instance, which is more important in the EU than the benefits of a free trade agreement to consumers and society as a whole.
Are the noble Lords sure? They should check where their shirts were made—or perhaps they are Jermyn Street only.
China is belching forth fumes from coal-fired power stations, yet we have the belt and road initiative pouring goods into our country from China. We do not very often hear people saying, “Well, we can’t possibly let those in because the Chinese are using so much coal”.
I am going to tell one illustrative story about the committee, which perhaps explains why I left. Tony Abbott seems to have fallen by the wayside, but he was touted as an adviser. At one meeting, this was mentioned, and he was roundly slagged off for not knowing anything and, even worse, for being conservative. I think it was the next week that George Brandis, the high commissioner, came to speak to us. I had done a bit of research and knew that George Brandis had been in his Cabinet, so I asked—innocently, as always— whether he thought that Tony Abbott’s advice could add anything to our free trade agreement. He said, “Tony Abbott? Fantastic guy; absolutely brilliant. He knows so much about trade”. If it is possible on Zoom to see crests falling, I can promise your Lordships that there were a lot of crestfallen faces around.
In summary, I found being on the committee a less than edifying experience. I am sorry about that, because I thought it would be really interesting. However, I think the report is fairly balanced and makes some very good points. It is a pity that there was not greater enthusiasm in the report, or on the committee, for a free trade agreement, however imperfect, because, like the noble Lord, Lord Kerr, I think that free trade benefits everybody. The agreement was reached quickly—perhaps too quickly, indeed—but it was for the benefit of this country and its people, and for the benefit of Australia as well.
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It is true that Australia’s focus on Asia might mean that our farmers will be insulated from competition from this deal, but there is a fear that the unconditional approach to removing agricultural tariffs could set a precedent. If a similar approach with the US, Brazil or Argentina had a cumulative effect, it could be damaging to our farmers and our wider agri-food sector. Although the TAC and the FSA/FSS—food standards and all of that—did not raise any significant worries about food standards and safety, the impact of increased competition on vulnerable farming communities remains of concern.
More time in negotiating might also have enabled our negotiators to obtain more on climate than is in the deal with what is now, of course, the former Australian Government. Given that the new premier and his Government are far more sympathetic to tackling climate change, we have urged Ministers to seek more ambitious moves in this direction through the joint committee set up under the deal. More generally, the desire for a quick result, and with a trusted ally, might have led to Australia’s very clear trade objectives and focus giving them a better deal than perhaps we could have obtained.
I turn to my second point. Given that this is the first deal negotiated from scratch, it provides an insight into the Government’s vision for post-Brexit trade. However, the committee finds it regrettable that the agreement cannot be placed in the context of a published trade policy and thus be understood in relation to other policy priorities, such as on climate, or in line with our diplomatic or defence alignments, or indeed with the Government’s own desire to safeguard their right to regulate for public policy reasons, including the promotion of public health and morals.
Since all trade deals involve trade-offs and compromises, Parliament needs to be able to judge the outcome of any FTA against the Government’s overall objectives, but these need to be set out in an agreed policy with Parliament and made publicly available. We asked Ministers a year ago to set out their ambitions for trade in this new era. Without such a framework, Parliament cannot judge the success or otherwise of a trade agreement. The Government demurred, leaving us scratching our heads as to the extent to which any outcome meets the Government’s wider objectives for their trading partnerships.
This may not matter so much with Australia—it is a friendly nation and a close ally, with which we already have extensive and pretty much free trade—but not all future deals will look like this. Following the invasion of Ukraine, with its impact on global security, food security, supply chains and vulnerabilities, just-in-time processes, our environmental commitments, and the need for strong, resilient relations with friendly states, such an overarching framework is even more urgent. Furthermore, as Russia, perhaps alongside China, has devalued any commitment to a rules-based global order, on trade or anything else, the UK needs to ground its trading and international relations firmly in a trusted, ordered and rules-based environment. That is what we need the Government to spell out.
Our committee is not alone in seeking a proper trade framework. The International Chamber of Commerce says that the UK has an opportunity to design a trade policy that creates an economy that is prosperous, fair and green. It should not be difficult for Ministers to lay out their trade ambitions, acknowledging their wider global objectives. Much is scattered around among various official documents listing the Government’s commitment to universal human rights, the rule of law, fairness and equality as guiding
“all aspects of our international policy, including our approach to trade”
—so they say it sometimes, but not in that framework. Indeed, the DIT’s strategic approach for a deal with Mexico highlights its commitment
“to uphold … high environmental, labour, public health, food safety and animal welfare standards”
and the interests of “consumers, producers, and businesses”.
Given the annunciations emanating from Anne-Marie Trevelyan, why the resistance to publishing the objectives and red lines as a trade policy? Such a benchmark would help us understand how the emerging agreements with individual American states, such as the one with Indiana, and those with India and the Gulf fit into the picture and embed respect for human rights and the environment within them. Without a trade policy against which we can rank any deal, what exactly are we are meant to conclude?
Thirdly and lastly, in this new trading environment is our committee, on behalf of the House, able to scrutinise trade deals effectively? The answer is yes and no. In the case of Australia, the Government gave us three months with those 2,000-odd pages—delivered to me on Boxing Day—to study, take evidence and report, but the Act requires only 21 sitting days. That is impossible for any trade deal. We would like the Minister to give us an assurance that months, rather than days, will be available to us to do the job we have been given.
In addition, we are uncomfortable as to whether the devolved Governments have sufficient input into trade agreements that impinge on their competences. We also lack environmental impact assessments. Indeed, we do not have sufficiently granular impact assessments even to judge the Government’s projected outcomes, let alone to test these against other data or to hear from independent analysts of the likely impacts.
Above all, of course, the Lords can only opine on a deal. Even the Commons can only delay ratification. This is far less traction than the European Parliament, the US Congress or other legislatures have. Yet if parliamentarians are excluded from greater oversight of agreements with major impact on people’s lives, we risk worsening public concerns about trade impacting negatively on some sections of society. If we believe in free and increased trade, as we do, any lack of trust in it cannot be a good thing.
While we welcome the Grimstone rules and the Grimstone commitment to a debate on negotiating objectives, which we saw in action on CPTPP and expect to have with our report on India, that offer came too late for this set of negotiations. We hope to have greater input in future. We are delighted that this first opportunity to report to the House is on a deal with a friendly, reliable ally and that the agreement, with some hiccups, is one we can endorse. I thank our committee and secretariat for the amazing work they have done on this, and the witnesses for their input and insight. I beg to move.
The report states that the Trade and Agriculture Commission’s findings were mainly positive. This might be true for the criteria at the level of carcass meat imports we can expect from Australia, but it may not take long before we see producers beginning to press for more of the animal welfare and climate change standards that apply in that part of the world to apply to our production here. I will give two examples. First, our animal health standards are enforced by law. In Australia, at the federal level, they have only non-binding guidelines. In the deal, we have undertaken not to go back on ours, so their animals in fields do not have to be checked every day, whereas we have the cost of doing so. Secondly, in the agricultural community we have been subject to constant reductions in animal transport times and distances, as many noble Lords will know, so that some areas cannot sell their stock unless they break the journey for livestock with an enforced rest period. The RSPCA found that in Australia sheep and cattle are transported for up to 48 hours in hot weather, sometimes without food or water, to mention only two of the anomalies. What hope can my noble friend the Minister offer that the Australians will be anxious to move towards our restrictive practices when they are quite happy with what they have now and the agreement states clearly that they should be under no obligation to do so?
The same thing applies to our regulations and undertakings on environmental issues. When I attended the COP 26 in Glasgow this summer, we were treated to a stream of UK Ministers and under-Ministers telling us that the country was going to be in the forefront in achieving the Paris Agreement, and telling everyone else that they should do so. Yet when we come to conditions for an agreement on investment and services, all that flies out the window and we have an agreement at the level we see in this treaty.
The biggest impact of the FTA, as we heard from the noble Duke, the Duke of Montrose, will be found in agriculture, where tariffs will, in effect, be removed altogether, albeit with some emergency brake safeguards. The clear beneficiary of this part of the deal is Australia because it is a major agricultural producer gaining access to a much bigger market, and because UK farmers already had tariff-free access to the Australian market. Of course, all trade deals are trade-offs and, I hope, mutually beneficial ones. But with such a major concession on offer to Australia, it is regrettable that the UK conceded a potentially strong negotiating position by making its desperation for a deal so glaringly evident.
One area where we could and should have insisted on more progress is in relation to the environment chapter. There were certainly positive aspects to this chapter—for example, as the report notes, the RSPCA’s evidence to our committee stated that the language on the conservation of marine ecosystems was particularly good—but, none the less, stakeholders viewed the chapter overall as, at best, a missed opportunity.
Certainly, the contrast between the respective chapters in the New Zealand and Australia FTAs, which is highlighted in our report, is stark, particularly in respect of fossil fuel subsidies, carbon pricing and trade in environmental goods. Notably, the Australia chapter does not include specific reference to the temperature goals of the Paris Agreement, which, it is reported, were taken out on the insistence of the then Australian Government.
Although the UK’s impact assessment finds that UK-based production emissions should remain largely unchanged, our Government do not seem to have taken enough account of the dangers of carbon leakage and the reliance of the Australian power sector on dirty coal. As the noble Baroness, Lady Hayter, has said, we urged the Government in our report to take advantage of the election of the new Australian Government to look at this chapter again.
The evidence we received from a range of stakeholders indicated concerns about the precedents that this FTA could set in future trade agreements with trade partners with low environmental standards, such as the United States and Brazil. The lack of an overall trade policy means that the Government do not seem to be gaming the impacts that concessions to achieve quick-fix FTAs such as this one will have on our future negotiating position. It is hard to imagine the US, for example, agreeing to a future trade deal that had more onerous environmental demands that those agreed with Australia.
In addition, the Government did not take advantage of the opportunity to conclude agreements on green technology and on green energy co-operation. One area we might have looked at is green hydrogen. This is an area where mutually beneficial agreements might have been arrived at, given that the UK is the home to cutting-edge technology—we have in Sheffield ITM Power, which is one of the world’s leading manufacturers of electrolysers used in hydrogen production—and Australia has huge interests in hydrogen production through solar and wind. But these sorts of opportunities seem to have fallen victim to the desire for a quick deal, rather than a comprehensive deal.
Given that the UK’s net zero commitment is a legally binding obligation on our Government, it follows that it must be their central policy objective over the years to 2050. But somebody needs to inform the trade department of this fact, so that environmental objectives are not seen as a “nice to have” but are regarded as central to our trade policy.
As a liberal free trader, I conclude by welcoming this trade agreement, despite its flaws. However, I hope that as this is our first full trade deal post Brexit, the Government will take the time to absorb the negotiating lessons they have learned, and in particular that they will recognise the need in future not to appear such an eager, if not desperate, suitor. I hope that in his reply, the Minister will reflect on which lessons the trade department intends to take on board as a result of these negotiations—the first, as the noble Baroness, Lady Hayter, said, conducted by a British Government since 1973.
I hope the Government will also recognise that improving our trade position will require much more than a flurry of quick-fix trade deals. It requires an overarching policy—as the noble Baroness, Lady Hayter, stressed—that has a strong focus not just on concluding trade agreements but on trade promotion and building the enduring relationships with business and with countries around the world that help sustain and nurture trade and investment. At the moment, too many nations regard us as an unreliable partner, unwilling to enter into real partnerships or engage on equal terms.
Our country and economy are in deep, long-term trouble: productivity is stagnant, GDP growth is anaemic and in the G20, only Russia’s economy is predicted to fare worse than ours. Our trade position has deeply deteriorated. None of this will be fixed by the fantasy economics that most of the Tory leadership candidates seem determined to peddle. Unless we are able to restore our trade position and provide a concerted solution to the structural problem of low productivity, we will find ourselves an ever-poorer and more unhappy country.
I will tell a funny story that my colleagues will know. I made the point that we have limits on how long a beast can travel for. As the noble Duke, the Duke of Montrose, pointed out, a beast can travel for 48 hours in Australia in heat above 40 degrees, which makes today’s weather here seem cool. The response was: Australian cows are tougher than British cows. I thought that that was a joke, and it was perhaps a mistake to laugh at it. It is also extremely interesting that one of the big holes in this deal is climate change. The deal was done with a climate-sceptic Government, but that Government no longer exist: they were voted out to a very large extent because of the position they took on climate change.
Returning to hyperbole, it is important to note that Australia is 10,000 miles away and has a population of about 25 million, so the impact it can have on our economy is limited. My noble friend—and he is a friend—Lord Goodlad has a postcard that shows the United Kingdom as part of one county in New South Wales. It is a huge country with economies of scale, particularly in relation to agriculture, that we cannot even conceive of. I agree with the point made by both the noble Lord, Lord Oates, and our chair that GDP is estimated to go up by 0.08% by 2035. That is £2.3 billion, which the MoD and the Scottish Government could probably spend in a morning. These are not the kinds of sums that we are looking to see coming back to our economy.
Throughout all our hearings, the NFU has been particularly critical of this deal, bearing in mind the economies of scale that Australia can have. The Government claim that UK consumers prefer British products. Well, if you go into a shop and only have a pound to spend because of the cost of living crisis, you are not going to spend it on British products sold at £2; you are going to have to buy what you can afford. This is one of the consequences of the cost of living crisis: people are not able to choose what they want; they must buy what they can afford. The growing cost of living crisis will affect that. The real fear among farming communities is that the Australian deal could undercut the UK industry, especially if Australia is frozen out of Asian markets. That could happen; there is an intense dispute between Australia and China, and a real risk that Asian markets could be opened up. Why did the Government not insist that increased access to the UK market should mean adherence to the core standards that the noble Duke, Lord Montrose, talked about on the environment and animal welfare?
Back to hyperbole again: I am sceptical about the CPTPP—the trans-Pacific partnership. This deal has been done with countries that have agreed to a set of principles not all of which are aligned to what we in Britain would seek to have. Also, it is at the other end of the world, and we are joining it because we left our neighbours. Our neighbours were in a deal to which we contributed, and now we are saying, “We want to sign up to the CPTPP”. I will have to get a whole lot of new evidence that the CPTPP will work for us, and that we will be accepted into it. The deal on acceptance may be completely different from anything we can sign up to.
During the negotiating period, the UK signed up to AUKUS, the nuclear submarine deal. Where will that fit into this deal? The rumours are that the US will get the lion’s share of contracts.
One of the most exciting things that has happened in the past six weeks is that the new Government in Australia are not climate-sceptic. Has contact been made with the new Australian Government to reopen the discussions on climate change, maybe even getting them to commit to limiting the global average temperature increase to 1.5 degrees centigrade? Here, as in Australia, no Government can bind their successor. That is something we should be moving on now, and not at some point far into the future. The Rudd Government signed the Kyoto Protocol within days of being elected in the mid-2000s; why could the Albanese Government not have been asked to reopen the climate change sections that are so absent from the existing deal?
Coal is a driving force in Australia. In the UK, we are establishing a real lead in carbon capture, storage and use. Years ago, development programmes took place in the Latrobe Valley in Victoria. Why is that not included in the deal? Some years ago, a carbon capture and storage international programme was started in Australia, long before the climate-sceptic Morrison Government came on the scene. There are opportunities there for British business, and I should say that I am president of the Carbon Capture and Storage Association here in the UK. We are in a position where we can move into the leadership on carbon capture and storage, and there are many jobs tied up with it.
Noble Lords will be delighted to know that there are some parts of the agreement that I am actually very happy with. I am very happy with the professional services deal, and hope that many new opportunities will open up to British business. We benefit particularly here in London from many Australian professionals, many not needing visas as they have dual nationality, which is very popular in Australia—except in Parliament where only Australian citizens may sit. Frankly, the Home Office has a very busy time before elections while everybody who is a candidate revokes their British citizenship, and a very busy time after elections when those who have not won go and take up their British citizenship again.
That is how close the relationship is and I hope it is something we can build on; it is one area where hyperbole is uncalled for. With Australia we are among friends, as the noble Baroness, Lady Hayter, pointed out. But the flowery language used to justify a trade deal that could have been so much better is uncalled for. Now with a new Government in Australia, it is time to get that deal augmented without resort to hyperbole. It is a deal that we can work on, but the Government need a commitment to look hard at what Britain really needs, not headlines about doing the first trade deal.
I would hope that the Minister in replying to this debate would be briefed to reply to some of the questions that we raised in our report. The two that I would particularly like to hear an answer to are the questions that we asked in paragraph 34 on data adequacy and in paragraph 42 on investor-state dispute settlement, where the policy of the Government simply is not clear to me. But my concern about the agreement was more about what it did not say than what it did say, and more about the unsatisfactory features of the process that produced it.
I shall make three points, one specific, one general and one purely about process. First, on the environment chapter, of course the noble Baronesses, Lady Hayter and Lady Liddell, and the noble Lord, Lord Oates, are right that the environment chapter is extremely disappointing. I agree with him that the contrast with the New Zealand deal is quite striking. The New Zealanders signed up to work with us on carbon pricing and reduction of fossil fuel emissions, but there is nothing comparable in the deal with Australia. Yet, as has been discussed, in other parts of the agreement we conceded quite a lot to the Australians; they are not necessarily very damaging, but those concessions were seen as considerable in Australia. I do not know what price we got for them, but it certainly does not look as though we got a price in the environment chapter.
I do not understand why we pressed ahead to do the deal with the Morrison Government, who had demonstrated at COP 26 that they did not attach a very high priority at all to reducing carbon emissions; they attached a higher priority to maintaining a massive coal export industry. As the noble Baroness, Lady Liddell, said, the polls showed that the Morrison Government were in trouble and an election was coming up, and the wildfires had caused the Australian public to be more concerned about global warming and emissions reduction. Maybe we did try to extract a price—but why did we give up? Why did we not wait to see whether the polls were correct and the Labor Party were going to come in with a very different approach to environmental policy? I do not know the answer to that; it looks like a mistake, but I hope that the Minister can elucidate.
Of course, it is not possible now to make our concessions in this agreement contingent on Australian action on the environment—the deal is the deal, it is written down and there is nothing we can do about it. One of the oddities of our scrutiny system is that we are allowed to debate it only when we can do nothing about it; still, that is where we are. I echo the noble Baronesses, Lady Hayter and Lady Liddell, and the noble Lord, Lord Oates, in saying that I hope we are, nevertheless, in discussions with the Albanese Government about whether, in addition to this agreement, there can be some new UK-Australian agreement to work together on climate change.
My general point springs directly from that specific one. I do not know—I do not think any of us knows—what view the Government take on linking trade deals to wider non-trade policy objectives. We do not know because the Government have not published a trade strategy or any hierarchy of priorities. We can deduce one or two things. We can deduce from what has been said in other contexts that the Government’s number one priority in trade deals is securing greater access for service exports. I do not disagree with that. We can also deduce from what has been said in other contexts that the Government would not do a trade deal with a country demonstrating egregious contempt for human rights—okay. That is about as far as we can go, I think.
I was puzzled to hear the outgoing Prime Minister saying in April that he wanted a full free trade agreement with India done and dusted by October—with remarkable speed. In other words, there was no question of any linkage with Prime Minister Modi’s policy on Ukraine. The Indian Government refused to criticise the invasion which happened in February or to join in any sanctions, yet our Prime Minister in Delhi in April was saying, “Let’s go steaming ahead and do as wide a free trade deal as we can by October.” I genuinely think that the Government need to tell us to what extent trade policy is to be joined up with foreign policy, environment policy, energy policy, human rights policy or development policy. I think, and I think the general view in this House is, that they need to be mutually supportive. I am a free trader, but I do not think that trade liberalisation can be ring-fenced overriding all else. Napoleon was wrong: we are not just a nation of shopkeepers, but we need to demonstrate that with a strategy that links our trade objectives to wider objectives and sets out a hierarchy of priorities.
My last point is that chapter 8 of this report points out that something is still not quite right in our trade negotiators’ relationship with the devolved Administrations. It is well illustrated by the alarm in Edinburgh, Cardiff and Belfast about the tariff reductions on farm products, which so alarmed the noble Duke, the Duke of Montrose. The Welsh Government told us that
“as the setting of tariffs is a reserved matter, limited information is shared with Devolved Governments and we were unable to have meaningful discussions with UK Government on this issue … This lack of discussion makes it difficult for us to ascertain whether our interests in this area are being protected as negotiations progress.”
That is a very fair point and I think the UK Government owe the Welsh—the Scots say much the same—an answer. The friction with the devolved Governments was clearly not a priority for the outgoing Prime Minister, but I hope it will get more attention from his successor and that the Government will drop the absurd objection, encapsulated in paragraph 147 of our report, where they say that
“sharing information on tariff liberalisation … could jeopardise overall negotiations.”
That is the reverse of the truth; it is not just wrong, it is absurd. It is extremely useful for a negotiator to be able to point out that a proposed concession could cause serious problems back home; it is extremely useful if one wants to reject it and even more useful if one aims to extract a higher price for it. Having an informed instructing constituency back home strengthens one’s negotiating position; it does not weaken it. It also avoids surprises of the kind that clearly struck the hill farming community when the deal with Australia took place.
I believe that the devolved Administrations should have been represented in the negotiating teams that negotiated with Australia, at least on farm products. They should be represented in the teams that negotiate—if such negotiations happen—on agriculture with Canada, Mexico, Uruguay, Brazil and, of course, the United States. These countries—which are much closer—will offer much greater competition to our farmers if tariffs come down. It would also make sense for wider reasons: to heal this running sore in Whitehall’s relationship with Belfast, Cardiff and, particularly, Edinburgh. I am sure that the noble Viscount, Lord Younger, will take this point on board more than most, and I very much hope that he will take it back to Whitehall.
I am a farmer, as declared in the register of interests, and I know things can be very hard. However, interestingly—I would like my noble friend to confirm this when he sums up—I understand that the current quotas of beef and lamb imported into the UK from the antipodes are not nearly filled, so this free trade agreement will not make things worse. I have to say that some of the arguments being advanced have echoes of the corn law debates.
The common agricultural policy—of which we all have experience in one way or another—is very expensive, extremely disruptive to agricultural communities and, frankly, madness. Surely it is better to be out of that. I would love to hear somebody among those who will speak later defend the common agricultural policy. It has hugely harmed the agricultural sector in so many ways—I agree that perhaps it needed sprucing up, but, nevertheless, it really has.
Climate change has been much mentioned. I have been banging on about climate change and environmental issues since I got into the House of Commons, 30 years ago. When I first mentioned climate change, it was thought to be a rather eccentric obsession; it is not anymore. However, I have to say that the report is somewhat nitpicking on the issue of Australian coal. I agree with the sentiment, but those with nostalgia for our imperial past may not have realised that Australia is a sovereign country now, not one of our colonies, so it is up to Australia to decide what to do. Yes, we can lobby for it, but hold on, how many of us are not wearing something—in my case, it is my socks and shirt—that were not made in China?