1: Clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before completion of a review by the Trade and Agriculture Commission of the potential impact of the procurement Chapters on industry in the United Kingdom.”Member’s explanatory statement
Requires a review by the TAC before regulations implementing the procurement Chapters can be made.
My Lords, I have two amendments in this group, Amendments 1 and 6. I was thinking that the noble Lord, Lord Purvis, would be here, but maybe the noble Lord, Lord Teverson, will cover for him in his absence—he may arrive while I am speaking, who knows?
I begin by thanking the Minister both for being available between Committee and Report and for facilitating a meeting with Mr Phil Goff, the New Zealand high commissioner in the UK earlier in the Bill’s passage; both were very helpful indeed. Amendment 1 would require a review by the Trade and Agriculture Commission, the TAC, before regulations implementing the procurement chapters can be made. The TAC, as we know, is the independent committee of expert specialists in a number of fields—animal and plant health; animal welfare; environmental standards and so on. Its role is to scrutinise a new free trade agreement once it is signed and to inform Parliament whether measures in the new free trade agreement are consistent with UK levels of statutory protection. The noble Lord, Lord Purvis, has arrived.
Last year, the then Secretary of State for International Trade, Anne-Marie Trevelyan, received confirmation that the Australia and New Zealand trade deals were indeed within that consistency, so one might wonder why we are putting down this amendment. It is not to score political points, or to attack the Government, but to ask TAC to consider the procurement chapters of these two free trade agreements. The TAC would need to be fine-tuned to do this by importing necessary expertise. In Committee in the other place, representatives of TAC agreed that it is only as strong or as weak as the parliamentary scrutiny process around it. We can see no reason to limit it to the agricultural aspects of agreements and not to extend TAC to look at procurement as well. Incidentally, it is regrettable that TAC’s role is limited to post the signing of deals, but that is not the concern of this amendment.
I am delighted to follow the noble Lord, and I shall speak to Amendment 3 in my name. I congratulate my noble friend the Minister for the close interest he has taken in listening to my concerns—most recently in a phone call on Sunday evening. I apologise for intruding on his weekend.
My concerns in the background, and my reason for tabling Amendment 3 at this stage, are twofold. One, as the noble Lord opposite alluded to, is the need for an impact assessment, particularly looking at the impact of implementing the procurement chapters of these free trade agreements with Australia and New Zealand. What will the impact be on farmers, and indeed on the market for food within the United Kingdom, particularly in relation to lamb and beef? Secondly, in relation to the impact on the market for food, the impact assessment I am calling for must consider the production and food safety standards.
I am trying to impress upon my noble friend and the Government the plight of upland hill farmers, many of whom are tenanted farmers. I am most familiar with those based in North Yorkshire, where I had the honour to represent two different constituencies for a total of 18 years; I grew up in the Pennines in County Durham. Peculiar to those areas of the north of England is that perhaps 50% of the farms are tenanted. They also have very poor land but it does lend itself to grazing, and over the years they have done this extremely well. Therefore, they have thrived through our membership of the European Union and, most recently, the Basic Payment Scheme, through spring lambs and fat-store cattle.
I was particularly concerned to see in an article dated 5March that it is estimated that in this financial year alone, the typical grazing livestock farm in the English uplands faces a drop in farm business net profit income of almost two thirds, to approximately £16,300. I would like to pay tribute to the work of Julia Aglionby, professor of practice at the University of Cumbria’s Centre for National Parks and Protected Areas. She predicts that the income will recover slightly to almost £23,000 over two years, before slumping back to £16,700. The ballpark figure is going to be between £16,300 and £16,700.
My Lords, I wish to speak to Amendments 4 and 5, in the name of my noble friend Lord Purvis of Tweed, to which I have added my name. It is clear that the Government are extremely keen to foster trade deals with any number of non-EU countries. It is also clear that this could be very beneficial to our British farmers if they are able to export their excellent world-class produce to new markets—provided that they are not bogged down with unnecessary and exhaustive paperwork.
However, Australian and New Zealand exporters will in fact gain far more than our UK counterparts. The main tariff reductions are on the UK side. Trade with the UK is likely to be a very small proportion of Australia and New Zealand’s trade; they have other trading nations much closer to their shores. Their animal welfare standards are not as high as those in the UK, and there are no safeguards against Australian imports after 15 years—sugar after eight years, and dairy after six years. Even the previous Secretary of State admitted that the current deal sold UK farmers short.
Regarding tariff quotas, in year 1 Australia will access 35,000 tonnes of beef quota with no duty. This is an estimated 10% of the UK’s total import requirements. This will rise to 30% of total import requirements by year 10, which will be more than 12% of total UK production. It appears that the Government’s aim is to reduce the profitability and viability of our beef farmers, who produce some of the very best beef in the world.
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The Government have agreed to eliminate tariffs on New Zealand imports, although some products will be subject to phasing out. However, New Zealand lamb will be imported with no tariff at all after 15 years. Our hill farmers across the country, including those producing excellent Welsh lamb, feel that they are being undercut. This is already an area of agriculture that does not produce large rewards for farmers.
Amendment 4 would ensure that impact assessments are carried out for all types of farmers, especially upland, tenant and family farmers. It will be not the large conglomerate farmers who suffer from imports of cheaper, poorer-quality produce but the much smaller farmer, who is currently surviving on the edge of viability but who works disturbingly long hours, seven days a week.
The Government have pushed this and other trade deals with insufficient thought for the effects on our farmers. Amendment 4 would ensure that impact assessments are carried out on a regular basis. These impact assessments will be essential when the Government come to negotiate further trade deals with Canada and Mexico—a very different prospect from far-away Australia and New Zealand.
Amendment 5 would ensure that impact assessments for environmental standards, food standards, animal welfare standards and biodiversity are carried out and published regularly. Ensuring that these four key themes, featured in both the Environment Act and the Agriculture Act, are enshrined in the Bill is absolutely crucial.
Minette Batters, the president of the NFU, finished her speech to the recent NFU conference with a number of issues that she wanted the Government to address, including committing to promoting domestic food production, putting farmers and growers at the heart of our trade policy, guaranteeing our food security and backing British farmers and British food. It is time for the Government to do just this and add these amendments to the Bill to show that they do indeed support British farmers.
My Lords, I will intervene briefly. We had a substantial debate in Committee on precisely these issues and I will not repeat the remarks I made then. I remind the House that my sister-in-law is a sheep and beef farmer in north Wales.
For these purposes, I draw attention to the fact that each of these amendments refers to the impact of the procurement chapters—on industry in Amendment 1, on farmers in Amendment 3, and so on. This allows the amendments to come within the Bill’s scope, because the Bill is about only the procurement chapters of the two trade agreements. But because the amendments are within scope and relate only to the procurement chapters, they essentially are pointless, since they do not allow for an impact assessment of the impact on farming; as far as I can tell, the procurement chapters do not impact on farming.
I looked at those chapters; I was a member of the International Agreements Committee, which looked carefully at these two agreements and reported to the House on them. Where New Zealand is concerned, the benefit of the procurement chapter in the short run is modest and principally relates to housing and access to procurement of national parks in New Zealand. Where Australia is concerned, the agreement essentially enables us to access procurements at a sub-federal level, but given the thresholds I am unaware of any likelihood of any significant impact on UK agricultural exports to Australia or vice versa, since these are not necessarily public procurements. The question is whether farmers and agricultural produce from Australia and New Zealand have access to the UK market more generally. All these amendments are pointless in this context since they relate only to the procurement chapters.
I hope we get on with this. When we last spoke, I said that I hoped we might have completed the passage of the Bill by early March. The whole point of the Bill is to enable these chapters to be brought into our domestic legislation and to allow the free trade agreements to be ratified and brought fully into force. I had hoped that we would have done it earlier than this, but thus far we have not.
My Lords, I think your Lordships must agree that I am a very fortunate Member of your Lordships’ House, because with the possible exception of the noble Lord, Lord Lansley, everyone has been speaking on my account as a Cumbrian hill farmer. I should declare that interest, and that I am president of the National Sheep Association and of the Livestock Auctioneers’ Association.
The fundamental concern of agriculture about this seems to go back to the fact that when you have a carcass it is not really very clear whether it has been nurtured under benign environmental conditions or malignant ones. Equally, you cannot necessarily tell very easily, because of complicated scientific aspects that I had explained to me but do not entirely understand, whether it has had hormones introduced into it, and so on and so forth.
As I understand the law, under the international agreements, lamb in particular and beef from the two countries that we are talking about can be imported into our country. The legal impediment rests not there but with the fact that we are, under the WTO rules, allowed under certain circumstances to use welfare and environmental standards, as part of our domestic consumer protection legislation, to prohibit such products being placed on the market.
Against that background, what is needed in the context of the wider concerns that we have been touching on seems to be some kind of mechanism so that the British consumer and the British farmer know whether carcasses that might come into this country actually adhere to the appropriate standards. Speaking for myself as a Cumbrian hill farmer, I have no problems about competing with animals that have been reared in accordance with the standards that apply here. My worry is that you might in theory be undercut by products that come in from outside that do not adhere to those standards, for the simple reasons that the noble Baroness, Lady McIntosh, gave about the level playing field. The difficulty in theory is establishing whether that is the case.
My Lords, I rise briefly to offer general support for the direction of all the amendments in this group. I am sure that the Front-Benchers will have more to say. In response to the noble Lord, Lord Lansley, I note that the commitment from the Minister to offer regular impact assessments is not the same as something written into the Bill. The Procurement Bill contains increasing promises from the Government for more local and national public procurement for schools, hospitals, prisons, et cetera. I am not quite sure of the timing or how this interacts with the nature of the procurement in this Bill.
I want to pick up on a point from the noble Baroness, Lady Bakewell of Hardington Mandeville. She noted concerns about ongoing negotiations with Canada and Mexico. These amendments can also be taken as a broader expression of concern about the potential impact of opening up our markets to agricultural products from around the world, produced under far worse environmental, animal welfare and public health conditions than the standards we have been used to under EU membership and those of our own producers.
For anyone who has not seen it, there is a very interesting report on Politico reflecting on discussion around the potential CPTPP membership in which Canada is pushing with Mexico to have the same market access for agriculture as Australia and New Zealand have won under their deals with the UK. If we look at Mexico’s production conditions, we see that its beef imports have very high carbon emissions. Canada uses farrowing crates, tail docking, teeth trimming and lots of other practices that we would regard as wholly unacceptable in the pigmeat industry.
These amendments are to be taken together as a real expression of concern about what kind of food we will potentially see on our plates and the environmental impact of the food our farmers will be producing.
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Amendment 6 would require an impact assessment of regulations made under Schedule 1 within 12 months, and every three years thereafter. These trade deals are not short-term, one-off deals: while predictions can be made in advance, they are generally vague or broad and wide of the mark, so impact assessments would consider what the actual situation is after time has passed, to better inform the future, and on a rolling basis. This would provide insight into the effect of these deals and help us learn lessons for the future. Whether the Government like it or not—I think they do not like it—these agreements set precedents for future trade deals. A number of concerns have been raised about these deals and it would be sensible to keep them under formal review and readjust expectations as we gain more knowledge. For example, on employment rights, the TUC has commented that the agreements do not contain commitments to ILO core conventions, and an obligation for both parties to ratify and respect those agreements.
On climate change, it is deeply concerning that vital commitments made to this House on climate change in regard to the Australian deal are not being upheld. Alok Sharma MP, COP 26 president, said on 1 December 2021, that the Australia deal
“reaffirms both parties’ commitments to upholding our obligations under the Paris agreement, including limiting global warming to 1.5°.”—[Official Report, Commons, 1/12/21; col. 903]
This final agreement does not uphold that important commitment. In other areas too—the NHS, small businesses, regions and particularly animal welfare, which I think the noble Lord, Lord Purvis, will speak about in a minute—there are further problems. So, an impact assessment set against these concerns would be very helpful to assess the deals and prepare the UK for future negotiations. I beg to move.
On that basis, the NFU fears that it is not going to be cost effective, as we move from the Basic Payment Scheme to payments for environmental and public goods, for farmers to farm in the uplands, certainly in the north of England, with which I am most familiar. So, they face a drop in farm income. Coupled with that is what I see as unfair competition and the lack of a level playing field. My noble friend Lord Inglewood will remember from our days in the European Parliament this elusive level playing field that we thought we would obtain at some stage in the European Union; it never happened, but I see it becoming more and more elusive as we go forward.
So, the purpose of this amendment is to look at how we can ensure, through proposed new subsection (2) of Amendment 3, that our standards of food production and safety will be met going forward. The NFU is concerned that there are no enduring safeguard mechanisms —that the mechanisms in place are for up to a maximum of 15 years.
I would like my noble friend the Minister to acknowledge when he sums up that, in its impact assessments for the two agreements, the Department for Business and Trade has modelled agriculture, forestry, fishing and semi-processed foods, which include the beef and sheep meat sectors, and these are estimated to see a fall of 0.35% in one agreement, and a minus 1.16% reduction in gross value added, respectively, relative to the base line, over the long run as a result of the FTA. We have to accept that some farmers will take the view that we are doing a deal with the devil.
Australia and New Zealand are very good producers of food. They have large tracts of land on which to produce their food, and they are going to come after our markets very aggressively. Regarding my noble friend’s department’s impact assessment, I accept there may be other areas under these agreements that may benefit, such as automobiles and whisky—which is close to my heart, coming as I do from Scotland—but I am here to argue for the plight of the hill farmer and the upland farmer, who are feeling very beleaguered as we speak.
Another source of concern that I hope my noble friend will address is how these imports are going to meet my test under proposed new subsection (2) in Amendment 3. I have had a note from the Food Standards Agency concerning the percentage of food coming into the UK from third countries, including EU countries, as “checked at port or point of entry”. As we will recall, imports from the EU, which may include Brazilian, Australian and New Zealand imports, have been temporarily suspended at our borders; I think they are due to be phased in toward the end of this year. But imports from Australia and New Zealand through the EU are not being checked at our borders at the moment.
What is concerning me more is that all imported high-risk food and feed from non-EU countries is subject to control at our borders. This includes 100% documentary checks to ensure that the consignment originates from both a country and establishments that are approved to export to this country, and food and feed safety assurances contained with the Export Health Certificate have been correctly completed, meeting our safety requirements. Additional identity and physical checks will be carried out, and the frequency of such checks vary between—if the figures are correct—1% and 30%.
The FSA says that typically, meat and dairy products fall into the 30% frequency, while fish and fish products fall into the 15% frequency, and highly refined products of animal origin fall into the 1% frequency. Lamb and beef fall within the 30% checks, so we are taking an awful lot on trust at our borders from non-EU countries —an example being Australian and New Zealand meat imports—under the terms of a free trade agreement.
The final thought I would like to leave my noble friend with is that the checks undertaken by local authorities in England are a sort of last-chance saloon; at the moment they are patchy, and I hope that enough resources will be made available to them. Those are my main concerns. This is yet another agreement which is asymmetrical in nature, and we are doing a deal which is going to be far more in the interests of Australian and New Zealand farmers than our own. Unlike other free trade agreements, it does not allow for a safeguard measure, so it is putting our own producers of meat, particularly lamb and beef, at risk. It also lays us open, both as domestic producers and consumers, to substandard foods coming in.
Those are the concerns that lie behind Amendment 3, and I very much look forward to hearing some reassurance from my noble friend when he comes to respond.
I have one point on impact assessments, since the purpose is to try to get impact assessments. I still do not understand why those who are asking for these assessments to be made have not recognised that the Trade and Agriculture Commission produced reports last year on each of these free trade agreements. The International Agreements Committee and the International Trade Committee in the other place had commitments from Ministers that there would be a monitoring report every two years and a comprehensive evaluation of the free trade agreement after five years. That seems a perfectly reasonable proposition, so I cannot see that these amendments have either procedural or substantial merit.
Therefore, the question I put to the Minister—if he cannot answer me now, I ask him to do so by letter—is whether the Australian and New Zealand Governments will have proper farm assurance schemes in place to enable the traceability of the carcasses so that they can be identified. That seems to me, and to a number of other people who have been thinking about this, probably the most effective way of ensuring that this provision is properly adhered to in terms of our own domestic production. That would go a very long way towards allaying a lot of the concerns that have been expressed.