Trade (Australia and New Zealand) Bill Report 18:13:00 Clause 1:
Power to implement government procurement Chapters Amendment 1
Moved by 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...Request free trial
Trade (Australia and
New Zealand) Bill
Report
18:13:00
Clause 1: Power to implement government procurement Chapters
Amendment 1
Moved by
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.
(Lab)
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, , 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,
, 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.
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. 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.
(Con)
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 5 March
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.
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 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.
of Hardington Mandeville
(LD)
My Lords, I wish to speak to Amendments 4 and 5, in the name of
my noble friend , 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.
18:30:00
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.
(Con)
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.
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.
(Non-Afl)
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, , 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.
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.
(GP)
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, , 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.
(LD)
My Lords, I apologise to the House and to the noble Lord, , for missing the first minute
of his contribution.
I agree with the noble Baroness, Lady Bennett, about why at this
stage of the Bill we are seeking to raise some of the concerns
that have already been expressed. It is not just we who have been
raising issues about these agreements in particular. I can quote
from a website that says we know that farmers are concerned by
some of the trade deals we have struck, including with
Australia:
“A Rishi Sunak-led Government will make farmers a priority in all
future trade deals.”
That website is Ready for Rishi. As part of that commitment, he
said that as Prime Minister he would introduce a new “Buy Local”
campaign. He would also:
“Introduce a new target for public sector organisations to buy
50% of their food locally, to back British farmers and improve
sustainability.”
The noble Baroness, Lady McIntosh of Pickering, raised this in
Committee. In discussing procurement, we are justified in trying
to find out how that target from the new Prime Minister of 50% of
public sector procurement through buying local will be
implemented, especially since that same Prime Minister has
recognised the concerns about these agreements we are
debating.
It is also worth noting that there have been significant concerns
among not only farmers in England but those in Scotland, to which
I will refer, and Wales. Today’s Order Paper notes that Welsh
legislative consent has been withheld. We should take seriously
why the Welsh Government and Parliament have not been able to
provide legislative consent in these areas. We also know the
concerns of the Scottish Government.
Before I progress, I thank the Minister for his proactive
engagement. I support his commitment to seeking opportunities to
promote British exporters. The level of engagement he has shown
to the Front Benches and others is to his credit and that of his
office. I appreciate his willingness and engagement. He and
others, such as the noble Lord, , are keen to see this
agreement put in place. From these Benches, I wish to see
agreements where there are opportunities for UK exports,
especially in rural procurement. As my noble friend Lady Bakewell
has indicated, we will not be shy in raising concerns about what
the impacts may be, especially where the Government say when it
suits them that these either are gateway agreements for CPTPP or
will set precedents. I agree with the noble Lord, , about this. It is right that
we test the impact on our domestic industries.
18:45:00
Our amendments seek specific reference to the impact on tenant
and family farmers in particular, as well as on biodiversity.
These are vital issues. The Government’s own impact assessment
says that the cumulative effect of the Australia agreement will
be a decline of 3% for beef and 5% of sheepmeat as a result of
this liberalisation. As the noble Baroness, Lady McIntosh,
indicated, this is one-way liberalisation. In many respects, we
have already had the market access. The question is: what is the
impact on that new market access for those within the UK?
I know that the Minister will probably repeat the reassurances he
gave in Committee. I respect him for doing so. I hope he will
allow me to give another indication of the significance of this
and why we are so concerned. I was in Scotland at the weekend, as
I normally am. I was in Dundee, speaking to producers. The impact
on energy costs and the shortage of labour, as well as the
potential for increased competition—which is not based on a level
playing field—in the dairy, egg, chicken, potato and vegetable
sectors, were brought home to me. At the moment, many are making
very difficult decisions about whether they will be able to carry
on with production. It is right to raise these concerns and to
link these agreements with the debates we are having on food
security and our rural economies. The energy costs and labour
shortages in dairy and in lamb and beef production are of
significant concern. A much more targeted impact assessment on
what are very vulnerable sectors—not simply a review of the
agreement overall—is now vital.
It is also relevant to refer to some of the press reporting about
South American meat, which has allegedly been put on the UK
market labelled as “best British beef”. I understand that a major
investigation is under way by the National Food Crime Unit—part
of the Food Standards Agency—into what could have been a
significant mislabelling of products. Can the Minister comment as
to when we may see the conclusion of this investigation? If he
cannot say so today, will he write to me? Issues about standards,
mislabelling, mis-selling and the impact on our rural economies
are not theoretical but real. The fact that there could
potentially be hundreds of thousands of products where British
consumers thought they were buying British, but that were
actually from other sources, is of significant concern.
I respect the point made by the noble Lord, , about the TAC. In Committee,
I said that I had read the report and that I respect the work it
does, but I do not think it is fair to say simply that because
the TAC has made a report on the agreement, we should not seek
further reassurances on the impact. If there are to be means by
which we trigger mechanisms in the agreement to protect those
sectors which may face unfair competition, we need the evidence
base to make that decision. Therefore, seeking an opportunity to
raise issues about enforcement of the commitments in the
agreement is valid.
Next, I will refer to precedent. On some agreements, the
Government say that there is no precedent in any agreement,
because each agreement is negotiated afresh. That may be
factually the case, but we know, as the noble Baroness indicated,
that the Government are negotiating in real time with Mexico and
Canada, and we seem to be close to an accession to CPTPP. If
other reports are true, we have given considerable concessions on
palm oil to Malaysia as part of the CPTPP accession talks.
Reports in the Financial Times indicate that we have accepted a
demand from Malaysia to cut tariffs on palm oil to zero
immediately on accession, whereas the EU has a de facto ban. That
will create significant concerns about the UK’s commitments on
anti-deforestation and biodiversity. Ultimately, because we have
insufficient means to properly scrutinise government negotiating
objectives, it is right, even at the late stage of Bills, that we
consider them closely.
On CPTPP, the Government have been very clear. The Minister said
at Second Reading and in Committee that the Government consider
these agreements as a gateway to the accession, so it is right
that we link them together. Alan Beattie of the Financial Times
highlighted the potential of the CPTPP accession to be just 0.08%
of growth in gross domestic product. He says:
“To express economic growth in decibel form, the UK joining the
deal in its current form is a cat sneezing three rooms away.”
The Government’s rhetoric on some of these agreements is not
matched by reality when we know what the direct impact will be.
Even at this late stage, therefore, I hope that the Minister will
be able to offer some reassurance to our sector.
(Con)
Going back for a moment to the point the noble Lord made earlier
about the sale of food to public bodies and these procurement
chapters, does he recognise that the purchase of food locally by
schools, hospitals and the like will almost certainly not be, as
I judge it, within the definition of covered procurement and not
above the threshold; and, therefore, the procurement chapters, in
so far as they extend procurement opportunities to Australia and
New Zealand providers under this Bill—and under the Procurement
Bill—really would not be relevant to that local provision of
food?
(LD)
I am grateful to the noble Lord; he knows I respect his work on
this area very much. I would like the Minister to confirm that
that will be the case, because I am not convinced. I see the
noble Baroness, Lady Neville-Rolfe, in her place. She was kind
enough to have a meeting with me about it. I am not yet
convinced, because of the elements within the Procurement Bill
which will require there to be no discrimination for any of the
treaty countries for public procurement in this country, that
what he is arguing for, which is effectively a carve-out, will in
fact be the case. My understanding is that under the Procurement
Bill, we are unable to discriminate against any of the treaty
suppliers. I am not sure that a public body in this country would
be able to discriminate. I hope the Minister will be able to
clarify that point.
The reason this is relevant and why I quoted the then candidate
for leader of the Conservative Party’s commitment to 50% of
public procurement in this country being local is that I do not
know how that squares with what will be the legal requirement
under the Procurement Bill that we are then unable to
discriminate against Australian and New Zealand produce which
will enter the market. I do not know how that squares.
I am simply asking the questions, because we have not had more
meat on the bone, if that is not too inappropriate an analogy,
about what has been published as a government commitment and is
in the Procurement Bill. If the noble Lord has any other answers,
I am happy for him to intervene on me. I do not know how he knows
how this might be squared. I do not at this moment. That is why
part of our agriculture sector is also questioning how these two
commitments will come together. The different sequencing of this
Bill and the Procurement Bill is relevant. Because it also sets
the precedent for Canada and Mexico, with new produce coming in,
and if these are gateway agreements for CPTPP, we are looking at
potential competition with all CPTPP members for public
procurement of produce. If you are a public body in the UK
looking at cost-effective procurement of food for schools or
hospitals and you are unable under the Procurement Bill to
discriminate against Australian or New Zealand produce or that
from any CPTPP country and state that there is local producing,
similarly, I do not know that it is matched.
I hope that, at this late stage, the Minister can offer some
reassurance. I hope that he is able to explain how these
commitments to 50% of procurement can be matched, as well as give
further reassurances, specifically on the impact on tenant
farmers and biodiversity. There are genuine concerns here, I do
not think they will go away and we need to offer that reassurance
to these sectors, which are so vital to our rural economy.
The Minister of State, Department for Business and Trade ( of Lainston) (Con)
My Lords, I draw Members’ attention to my entry in the register
of interests, although I do not believe there is any conflict
relating to our debate today. I am also grateful for the apology
of the noble Lord, Lord Purvis, for being slightly late. I was
fractionally late for Questions this afternoon, and was called on
to resign, among other things. I hope the House does not mind
that I have not taken that too seriously.
I am delighted to be speaking on Report of this very important
Bill. If it is appropriate to make a personal comment, I have
deeply appreciated the high level of engagement with the
Opposition Front Benches, my noble friends and noble Lords across
the House. I do not want to put words into people’s mouths, but I
think we agree that it is a fundamentally good thing to do a
trade deal with Australia and New Zealand. I was watching the
news yesterday and seeing the extraordinary advances we have made
in collaboration, particularly with Australia, in our defence. It
will benefit the economy in many areas in the north-west of this
country, among other parts of this nation. The sheer sincerity of
the brotherhood between our nations should be expressed very
clearly. I very much hope that if the high commissioner of either
Australia or New Zealand—I am grateful to the noble Lord, , for engaging with Phil Goff
recently—is watching this debate, they know that the fundamental
spirit of the House is for a successful conclusion of this
process and a good and successful trade deal with Australia and
New Zealand.
At the same time, I am very aware of the issues that trade deals
create. I am certainly not triumphal in any way about trade
liberalisation or the effects that this trade deal will have on
individuals and farming communities. I have been very sensitive
to those discussions over the past few months and take this very
seriously. I express my personal view that we must support our
farming community, and this is unquestionably the view of this
Government as well. It is important to have that on the
record.
19:00:00
I would like to deviate slightly from the prepared text that is
often given to Ministers on these occasions and actually try to
answer the questions that have been raised, if that is not too
procedural. Of the three groups of amendments, this one probably
requires the most attention; I hope that the next group can be
quite swiftly dealt with and the third relatively quickly as
well.
Noble Lords have raised the important points that have come from
this debate, and I greatly appreciate my noble friend Lord
Lansley’s commentary. This procurement Bill, which I have in my
hand, is a very specific and technical Bill, and to attach
specific riders to it would not really make sense. If one is
looking for assessment of the impact of the Bill on procurement,
in the sense of the changing of the thresholds, the advertising
and the termination concepts, I cannot really see how we can
judge the impact of this specific legislation. That does not
change the fact that I am keen to answer the questions and
concerns that are raised, because clearly, it is called the Trade
(Australia and New Zealand) Bill, as a result of which it is
absolutely justified to ensure that we assess the specific points
that the overall treaty raises. However, when it comes to the
technical points in the amendments proposed, it would be unusual
and unnecessarily cumbersome to attach any rider to them except
for that in Amendment 2, which I will propose myself.
I was extremely grateful to the noble Lord, , for his comments on what the
Trade and Agriculture Commission could achieve in terms of
further assessment and analysis. The TAC produced a significant
and deep report on the proposed ramifications of trade treaties
with both Australia and New Zealand. It was valuable in providing
this House with the right level of evidence and, in my view—I
read it very carefully—a high degree of comfort that the
ramifications in many of the areas where there are concerns, such
as animal welfare and the derogation of our standards, which has
been a matter for debate for some time, would be well managed and
contained in a way that should not cause alarm, long-term concern
or significant distortion to the markets.
On whether the TAC should consider procurement, I am quite
intrigued by that. It is not for me to make pledges at the
Dispatch Box. The noble Lord, Lord Purvis, has already suggested
that such pledges are not worth a great deal—I know one noble
Lord may have mentioned that; perhaps it was the noble Baroness,
Lady Bennett—but still, they are important statements. Even so,
it is not for me to make prescriptions as to the direction of the
TAC. However, as we evolve our trade plan, it is perfectly
reasonable to investigate what additional areas the TAC may look
at, although I advise that in this instance the commission should
look specifically at the effects of the imports on the farming
community. It may be worth looking at how we can assess further
procurements. I would be happy to entertain that, if that is the
right word.
The core point of these amendments is the impact assessment. We
have already done a detailed impact assessment; in fact it has
been raised. The very fact that it has demonstrated some
long-term or medium-term effects on the farming community in its
honesty is to be congratulated. It has allowed us to have a
serious debate and to ensure that, when we create these
agreements, we build in protections and safeguards, as we have,
in order that there can be a steady five, 10 and 15-year
transition. When it comes to assessing areas of risk, such as
poultry and pork imports, the agreement is very different on that
in terms of not liberalising those markets.
We have had the impact assessment, and we will have, after two
years, a monitoring report. I have quite a lot of detail here in
terms of after five years, which I think is the right time for a
full assessment of the effects of these trade deals. That is what
we want. The Government want to know what has happened. In our
conversation with the New Zealand high commissioner, we learnt
that New Zealand expected its deal with China to increase trade
for New Zealand by 3 billion dollars a year, and it ended up
being 30 billion dollars a year in five years. We are hoping for
significant magnitudes of trade between our nations to enrich us.
Two years, however, will give us enough time to monitor the
activities of the trade deals in the respective countries, and
after five years a full report will be presented. I believe that
the five-year report will be presented to Parliament; if that is
wrong, I will certainly correct that.
On top of that—and we discussed this in the last debate—there are
numerous committees and structures within the agreement to make
sure that they are functioning according to how we would like
them to function. I welcome input from all Members of this House
on areas where they think greater scrutiny is required, and where
they think there are issues. Clearly, in relation to agriculture,
we will have a constant dialogue as we go through the
process,
In specific fact, as a legislative Act—I hope noble Lords will
forgive me; I am relatively new to this House, so perhaps they
can correct me—adding riders to this Bill would seem to be
difficult to do in terms of trying to get the outcomes we want.
Philosophically in practice, the Government have conducted an
impact assessment initially, which I think has been well received
and has been extremely valuable in informing this debate. We have
committed to a two-year monitoring report—I am very pleased to
have discussions on what should be included in that to make it
useful—and then there will be a five-year full assessment of the
trade deals, as I believe we have committed to for all trade
deals going through the House.
Points have been raised by many noble Lords, including the noble
Lord, Lord Purvis, about the precedent that this trade deal sets.
I want to stress—this is extremely important from my point of
view—that no single treaty sets a precedent for the next treaty.
That is relevant; it is why there are negotiations with Canada,
Mexico and the other countries in the CPTPP. Both those countries
are in the CPTPP and we are negotiating different things with
them while at the same time negotiating on CPTPP—I want to stress
that. I can assure noble Lords that as someone who is in the
Department for Business and Trade I see—admittedly one step
removed from the negotiations—a huge effort to make sure that we
get the right deal for this country, that it is measured and
appropriate, and that we take the right time to conclude these
deals in the best interests of the United Kingdom. They are
separate, and I am very happy to have a separate debate, as we
will—I hope soon—on the opportunities that will be presented to
us by a plethora of other deals, but they will be stand-alone. I
would expect the same degree of scrutiny as we have had for these
two countries’ trade deals in this Bill.
The issue of animal welfare has been raised. That is extremely
relevant and very dear to my heart personally; it is important to
people in this country that our values in this area are not
diluted in any way. We have done a lot of work to assess the
impact on animal welfare. Looking at the TAC report, the impact
assessment and other reports, we feel comfortable that animal
welfare standards are comparable between Australia and New
Zealand and the UK. Before noble Lords intervene—which I
discourage, simply for the sake of the speed of the debate—let me
say that there are differences in how animal husbandry operates
in Australia and New Zealand, and some people might suggest that
in some instances it is better in terms of the amount of space
that animals have while in others they suggest that is worse. We
are aware, clearly—which is not relevant for imports into the
UK—of reports over the weekend on the movement of live animals
and so on. Therefore, I have taken it upon myself to speak
to—
(GP)
I am aware that the Minister suggested that there be no
interventions, but I have to say one word: mulesing. That is a
dreadful animal welfare issue in Australian sheep farming.
of Lainston (Con)
I thank the noble Baroness for that intervention. It is not my
plan in this debate to be triumphal or to score points or
whatever in terms of coming backwards and forwards. I have done a
great deal of work in order to satisfy myself that when it comes
to mulesing, the reports suggest that a tiny percentage of meats
that would appear in this country—I am only going on the reports
that I have been given—would be at risk of being from that
practice. I have also been encouraged by reports that I have read
about changing practices and standards in Australia. In
particular, farmers who come under the Australian farm assurance
programme certainly insist on anaesthetising before mulesing. I
do not want to go down an alleyway, but the point is that great
efforts have been made to ensure that, broadly speaking, our
standards are aligned.
I have two more important points. The New Zealand Government have
introduced a significant upgrade to their animal welfare
standards. I cannot recall the name of the Bill, but if noble
Lords wish to look, they will see that they are introducing a
whole raft of new animal welfare standards and general
environmental standards for farming, which will have enormous
ramifications for their production and align them even further,
if not go even further than we do. I spoke yesterday,
specifically ahead of this debate, to the Australian high
commissioner and raised this issue again, as I did with the Trade
and Agriculture Minister who I met a few months ago. This has
been my main issue, particularly when speaking directly to
interlocutors about animal welfare standards.
They have confirmed to me that they are doing further work, which
is very important. The Government of Australia have announced the
banning of other practices, not associated with our exports but
relating to live animal exports and so on. The direction of
travel is very positive. We have not celebrated enough that our
work in negotiating these trade deals has helped to drive up
standards in both countries. I applaud our negotiating team for
doing that, and applaud the debates that we have, with leadership
from individuals such as the noble Baroness, Lady Bennett,
ensuring that these areas are properly highlighted and that we
can draw attention to our interlocutors and set standards, and
that our negotiating partners know that we have these standards
and that we wish to be aligned on them.
I have only a few more points to make. The noble Baroness, Lady
McIntosh, made some very relevant references to the Food
Standards Agency. I wrote to her and the noble Lords, Lord Purvis
and , covering some of the
questions raised in the last debate. This issue was raised. I
have interviewed staff there to ensure that they carry out
physical checks at the border for Australian and New Zealand
products. They do not check every container, and frankly it is
quite right that they do not. It would be an extreme impediment
to trade, especially for food produce. However, they take a very
proactive approach to ensuring that our standards—which, to
reinforce the point, are not derogated in any way by these trade
Bills—are upheld.
On top of that, the noble Lord, , raised a point about
whether we can be comfortable of certification on the ground. In
my recent call with the Food Standards Authority, I particularly
covered the topic of Australia, which has a local assurance
system, as do we. To be eligible to export, a farmer must sign up
to the federal export assurance scheme; I cannot recall its name,
but your Lordships will know what I mean. Therefore, vets who are
under obligation to perform their duties—
(Non-Afl)
The question that follows from the helpful remarks of the
Minister is: are the British Government confident and fully in
line with what those schemes have to say?
of Lainston (Con)
I was just coming to that. I may have taken a bit too long to get
there but I am trying to reassure noble Lords by describing in
detail the lengthy process of assurance that Australia provides
us with. It is part of the global trading system and not
necessarily unique to Australia. We must do the same, as I
understand. If I am wrong, I will ensure that this is corrected,
but we must do the same with any agricultural or meat exports
that we send to Australia.
Are we confident that Australia is upholding their system and
managing it properly? The answer is yes. I have been impressed
with the calls that I have had around this subject. It is a
detailed and complicated process of assurance that ensures that
we are comfortable that what we receive is indeed what is
advertised. I do not want to be called back here if there is a
case where that does not happen, because clearly that is not my
intention, but on whether we are confident about the processes in
place, the short answer is yes.
Regarding South American beef being passed off under British beef
titles, I understand that this was only from one retailer, and
the National Food Crime Unit is investigating. This struck me as
an isolated case. Forgive me that I do not have all the details,
but the major supermarket retailers have all denied any knowledge
of this and it has not affected them. This is a unique case. I am
happy to have someone write to the noble Lord because it would be
interesting to find out a bit more about this, but it is not
relevant in this instance. It does not seem to be widespread, but
is specific. That it has been caught and is being investigated is
very important.
I come to a conclusion—
(LD)
Can the Minister address the commitment that the now Prime
Minister made for 50% of public sector procurement to be sourced
locally? Is that government policy? How does that interact with
the legal requirements in the Procurement Bill that a public body
in this country would not be able to choose a local producer over
a treaty supplier producer, on that basis?
19:15:00
of Lainston (Con)
I appreciate the noble Lord’s comments and was about to come on
to that when I said “conclusion”. Sadly, my conclusions can run
to several topics, the noble Lord’s being one of them.
It is correct that the procurement legislation prohibits a
nationalist tilt towards procurement, which is what we want. When
it comes to government procurement, we want the highest quality
products at the lowest possible prices, and I would like to think
that they will be British products. It will reassure this House
to know that 81% of all beef sold in this country is under
British brand labels. Only 19% international beef is sold in this
country in the first place. The assumption is that you are
already looking at a very high level of local procurement. A 50%
threshold would be logical for something such as beef, which
already fits into that.
There is a further question and further investigation regarding
whether procurement can be assessed in terms of other relevant
factors. I am happy to have a further debate about that in
general. It can apply to a wide range of concepts. It could even
apply to how energy is sourced and supplied. There is always work
defining what concepts such as sustainability or relevance to the
environment could be in terms of transportation distances and so
on. They are discussions to have. I have been having discussions
in other areas, for reasons not linked to these trade
discussions, on whether these factors can be brought to bear in
procurement. We are very wary of introducing anything other than
straightforward procurement rules, but I assure the noble Lord
that—as with beef, where 81% is already UK beef—it would seem
logical that a very high proportion of produce is sourced
locally.
(Con)
At the risk of delaying us on this point, the access that is
given through these procurement chapters and for treaty state
suppliers under the Procurement Bill is to cover procurement,
which means procurements larger than the threshold amounts set
out in the schedule to the Procurement Bill. For example, for
local food production for a set of schools, this would have to be
a procurement over £213,000. In truth, the issue is not whether
there is an Australian company that is likely to bid for such a
procurement, because these procurements will be smaller than
that. It is whether beef from Australia is in this country and in
circulation in their market which might then be used by local
suppliers—but then they are a local supplier to the school.
of Lainston (Con)
I have appreciated my noble friend’s extremely positive
interventions and applaud wholeheartedly his phrase, “Let’s get
on with it.” He has also been extremely helpful in pointing out
the specifics of the Bill and the difficulty of attaching these
sorts of amendments to it, although I am very sympathetic to the
overall philosophy of the desire for proper impact assessments,
which we have had and agree to wholeheartedly in terms of the
two-year and the five-year monitoring report. I stress again that
this treaty does not create a precedent. However, it does create
a model. I am very impressed and support wholeheartedly the
flexibility of this agreement because it will allow us and allow
noble Lords to call Ministers to account on a constant and
rolling basis concerning the effectiveness of these trade
treaties.
I believe that I have covered most of the points raised. I am
very happy to continue a dialogue around these and any other
measures that may not have been covered on this important piece
of legislation. We believe, and I believe passionately, that this
trade Bill is a good thing for this country. It will be of huge
benefit to our citizens and our consumers. It will give us
enormous additional security and allow us to have a closer
relationship with two nations that have been, since their
founding, sister nations of this country.
I am continually being asked by the representatives of Australia
and New Zealand when this treaty will come into force because, as
soon as it does, and only then, their businesses and citizens,
and ours, will be able to take advantage of it. I call on this
House to support the Government in this mission. I ask the noble
Lord, , to withdraw his amendment,
and for the noble Baroness, Lady McIntosh, and the noble Lord,
Lord Purvis, not to move theirs.
(Lab)
The TAC covering procurement seems to be a future possibility,
and I welcome the Minister’s comments on it. On the questions of
food standards and quality assurance that noble Lords have
raised, we will wait and see. We will have a review in two years
and a conclusion to that in five years, and we will find out
whether the assurances that we seek on food standards have been
maintained. I do not think that there is any doubt about this
being a gateway agreement: it is clearly to do with the CPTPP.
The impact assessment that we are calling for is a one-off. This
is the first time that we have negotiated a trade deal for some
45 years. To make sure that we have covered all the bases and got
things right, we thought that a review—rather more frequently
than the five years offered—would have been better. I beg leave
to withdraw the amendment.
Amendment 1 withdrawn.
Clause 2: Further provision about power
Amendment 2
Moved by
2: Clause 2, page 2, line 9, after “make” insert “different”
Member's explanatory statement
This amendment inserts a word missing from Clause 2(1)(a).
of Lainston (Con)
My Lords, Amendment 2, in my name, is a minor and technical
amendment that has been tabled by the Government to correct a
typographical error in the Bill and clarify the power available
to Ministers of the Crown or a devolved Administration under
Clause 1. I am very grateful for noble Lords’ scrutiny, which was
instrumental in highlighting this typographical error in the
Bill. In particular, I thank the noble Lord, Lord Kerr, who is
not in his usual place, and my noble friend Lady McIntosh, for
highlighting this issue in Committee. If I may say so, their
laser focus on detail in the Bill shows the real value of your
Lordships’ House in ensuring that legislation is as robust and
clear as possible. The Government are very grateful to noble
Lords for highlighting this issue. I beg to move.
(Lab)
There is nothing to say; we agree.
Amendment 2 agreed.
Amendments 3 to 6 not moved.
Clause 4: Extent, commencement and short title
Amendment 7
Moved by
7: Clause 4, page 3, line 4, at end insert—
“(2A) This Act expires at the end of the period of two years
beginning with the day on which it is passed.”Member's
explanatory statement
Adds a sunset Clause to the legislation.
(Lab)
I rise briefly to speak to Amendments 7 and 8 in this group.
These two amendments would sunset the ability to make amendments
to two years after the law passes or the UK’s accession to the
CPTPP. Incidentally, the Government previously said that
accession would happen last year, but, as I am sure we are aware,
it has not yet taken place.
The Explanatory Notes to these deals state that each party to the
free trade agreement should ensure that its domestic legislative
framework is consistent with the obligations in the FTA. The
UK-Australia and UK-New Zealand free trade agreements require
changes to domestic procurement law. Therefore, why not have
sunset powers in the legislation? Is there any expectation that
achieving this intention would take more than two years, and are
there concerns that constant updates would be required for
whatever reason? If so, would it be right to do so for more than
two years in any event? If accession to the CPTPP will change our
trade relationship with Australia and New Zealand, will a
domestic legislative framework need to be updated in a manner not
possible within the powers in the Bill so that it is aligned with
the CPTPP and these deals if they are to coexist? A series of
trade experts have commented that the UK will be a rule-taker,
not a rule-maker, when we join the CPTPP. The Minister may
perhaps wish to comment on this interplay between the Australia
and New Zealand trade deals and the CPTPP. I beg to move.
of Lainston (Con)
My Lords, I turn to Amendment 8 specifically, which seeks for the
Bill to lapse when the UK joins the CPTPP. Bilateral free trade
agreements, such as these signed with Australia and New Zealand,
do not lapse due to membership of plurilateral agreements such as
the CPTPP and the WTO Agreement on Government Procurement. They
exist alongside each other—that is important to note—with the UK
having separate and continuing commitments under each. This is
already the case with the numerous bilateral trade agreements
that the UK has with members of the GPA, such as Canada,
Switzerland, the Republic of Korea, the EU and Ukraine, to name a
few.
I emphasise that the procurement chapters of the Australia and
New Zealand agreements will not be superseded by the UK’s
accession to the CPTPP. Accordingly, the power in the Bill will
still be needed when the UK has acceded to the CPTPP, to
implement future modifications to the Australia and New Zealand
agreements. In light of this, I ask for the amendment to be
withdrawn.
(Lab)
I beg leave to withdraw the amendment.
Amendment 7 withdrawn.
Amendment 8 not moved.
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