Trade (Australia and New Zealand) Bill

Baroness McIntosh of Pickering Excerpts

2nd reading
Monday 9th January 2023 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

I welcome this opportunity to speak at Second Reading. I am delighted to follow my noble friend Lord Lansley and add my congratulations to my ever-youthful noble friend Lord Swire on his maiden speech. We look forward to many such contributions in future.

I have no known relatives in Australia or New Zealand, but I have close friends there who are, bizarrely, of Danish heritage. The House will remember that I am half-Danish; obviously, I took great interest in the fact that, 50 years ago last week, Denmark, Great Britain and Ireland joined the European Union, on 1 January 1973.

On a general note, I accept that no one can deny the importance of our relationships with Australia, New Zealand and other Commonwealth countries in relation to trade, security and other aspects. However, as noble Lords who have referred to the importance of those relationships will accept, those countries are a very long way away. Historically, geographically and perhaps more normally, our natural trading partners over the past 50 years—notably the European Union—have been closer.

Although I welcome the Bill before us, it seems to lend itself to being fairly asymmetrical, favouring foreign imports over domestic producers here. While we are told that the Bill is necessarily largely technical in nature, it is thin in substance; the Minister used the word “flexible”. I echo the sentiments of others who have spoken—notably our two august former trade commissioners to Australia, both of whom spoke very eloquently—about the impact of the lack of scrutiny on trade deals, such as is enjoyed in large measure in the US legislatures and the European Union, which we left only recently. I also support the comments made by the noble Baroness, Lady Young, and others on the key role to be played in this Bill and others by the Trade and Agriculture Commission; we must ensure that it has all available resources and expertise.

If one is in any doubt about the perhaps limited nature of the agreement before us, let me refer to the Government’s own impact assessment estimates. The impact assessment in relation to the New Zealand deal states that the UK’s

“agriculture, forestry and fishing and semi-processed foods sectors are expected to experience a reduction”

in gross value added

“of around 0.35% (£48 million) and 1.16% (£97 million) respectively.”

As regards Australia, that impact assessment states that the UK’s

“primary agriculture and semi-processed foods sectors are expected to experience a reduction”

in gross value added

“of around 0.7% (£94m) and 2.65% (£225m) respectively relative to baseline growth in the sectors.”

The Government estimate that as a result of the Australian deal we will see a reduction in gross output of around 3% for beef and 5% for sheepmeat due to liberalisation. This is equivalent to wiping £87 million off the output of UK sheep production and £67 million off the UK beef sector and does not take into regard the cumulative effect of agreeing similar liberalisation terms with New Zealand.

The trade figures for October show a decline in trade with non-EU countries, which obviously is a source of concern in the context of the Bill before us. I had the honour of representing for 18 years in the other place a deeply rural constituency in North Yorkshire with a proud tradition of producing spring lambs and fatstock beef. I fear that with the potentially asymmetry in this Bill, they will be damaged in the long term by the lack of a permanent safeguard clause. I will revert to that as one of my asks of my noble friend and his department in the context of the Bill this afternoon. I echo my noble friends Lord Frost and Lord Udny-Lister, who recognise the concerns to be faced by sheep farmers and particularly by hill farmers and fatstock producers across the UK and that those concerns must be addressed sooner rather than later.

In terms of Commonwealth trade, once Britain, Ireland and Denmark acceded to the European Economic Community on 1 January 1973, I understand that a trade deal was done with Australia, New Zealand and other members of the Commonwealth through the African, Caribbean and Pacific agreement. This has been updated periodically, most recently in European partnership agreements. As the noble Baroness, Lady Bennett, said, initially mention was made of the importance of sugar in trade and obviously the vital importance of trade to certain Commonwealth countries. Initially, a stable price was set for sugar, which was replicated in other products.

I again pay tribute to my mentor, the late great Lord Plumb, who was president of the NFU, the first and last British President of the European Parliament, and co-president of the assembly for the African, Caribbean and Pacific countries. He played a central and crucial role in these negotiations. Can my noble friend clarify the position under the Bill, which was raised in Oral Questions this afternoon, regarding products emanating from Australia, New Zealand and other Commonwealth and, now we have left the EU, third countries? Will those products meet the same standards of production, particularly in terms of animal welfare and environmental protection, as our home-produced foods?

I take great comfort from the commitment in the Conservative Party manifesto of 2019 that British high standards of animal welfare and environment would be maintained and that they would be replicated in imported food and food products. Can my noble friend the Minister take this opportunity to reconfirm and echo the comments made by our noble friend Lord Benyon, who, answering at Oral Questions, assured us that our free trade agreements, such as those before us in this Bill, will never conflict with stated UK policy in this regard?

The promise of open trade was, as I said, mentioned in the manifesto. It was repeated during the Conservative Party leadership contest in summer 2022 by my right honourable friend Rishi Sunak, now the Prime Minister. He made a commitment at that time that 50% of all publicly procured foods supplying local authorities, our schools, hospitals, prisons and defence establishments would be locally sourced. He went further, and I will quote his letter following his meeting with the NFU during that leadership contest in terms of international trade:

“I know that farmers are concerned by some of the trade deals that have been struck, including with Australia. I will make farmers a priority in all future trade deals. On my watch, we will not rush through trade deals at the expense of farmers. They will take as long as they take, and we will not water down our standards. We will also build on existing support mechanisms to help farmers export to the world’s emerging markets. We will maintain the high standards of animal welfare, environmental protection, and food safety.”


I support those desires and wishes of my right honourable friend the Prime Minister. I hope that my noble friend the Minister will also support them when winding up this debate.

There is disappointment—as my noble friend Lord Lansley, other noble Lords and I discussed at length during the proceedings on the Trade Act, and more recently the Procurement Bill, during this Parliament—that the wishes of my right honourable friend the Prime Minister seem to have met insurmountable obstacles in meeting our domestic public procurement target for 50% locally sourced food. I hope that I can rely on my noble friend’s good offices to ensure that that target is met going forward.

I conclude by seeking assurances from the Minister today that, for the wine and spirit producers—who welcome this Bill, as do I—a separate chapter will be opened and the Government will vigorously apply for export opportunities for UK wines and spirits to both Australia and New Zealand. I understand that the New Zealand agreement is preferable, as it allows for a committee to improve trade in UK products without reopening the agreement. I would be very interested to learn why that same provision was not available for the Australia agreement.

I seek the further assurance for UK farmers and consumers that our high levels of food production will be maintained and that inferior products will not be allowed entry. We heard earlier from the noble Lord, Lord Purvis, that hormone-produced beef and pesticide-induced crops may form part of the produce to be imported under the procurement provisions of the Bill before us. Neither would be acceptable to UK home production.

I also ask for the assurance that local authorities and military establishments will have the opportunity to source locally produced food to at least 50%, as previously sought by our Prime Minister.

Finally, I seek the assurance that an adequate and permanent safeguard clause will be introduced and that all the relevant statutory instruments, flowing directly or indirectly from this Bill, will be adopted under the affirmative procedure.

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[Lord Johnson of Lainston (Con)]

I thank the noble Baroness. I am about to go on to that exact chapter in making my final point on standards, which are important. I take this issue to heart.

It is absolutely essential for everyone to realise that nothing has really changed in terms of our standards. In fact, we believe that, in some instances, we have increased our ability to protect ourselves. I want to quote from some of the important chapters in the Trade and Agriculture Commission’s report, if noble Lords will indulge me; I know that my noble friend Lady McIntosh wanted me to touch on these matters as well. The report states:

“Importantly, all of these trade liberalisation obligations are fully covered by general exceptions, taken from WTO law, ensuring that the UK can regulate to protect animal or plant life or health … In addition, the FTA contains several rules in its environment and animal welfare chapters that expand on these rights to regulate, which gives the UK more leeway to override its trade liberalisation obligations—


that goes to the whole friction between these points—

“than it would have under WTO law.”

This is very important. We are ironclad in our ability to control our standards.

The concept of mulesing was raised. The TCA sees an increase in imports of mutton from mulesed sheep as negligible, and the FTA does not restrict the UK’s WTO rights to prohibit imports of products from Australia produced using the practice of mulesing without pain relief. I was told that 90% of all mulesing is done with pain relief. Yes, there are different practices and clearly, mulesing is not relevant in the UK because of flystrike and other conditions, but we have the ability to protect ourselves and we still have the ability to ensure that the food and goods we import conform to our standards.

Also, in terms of animal welfare, these chapters are ground-breaking. It is worth using those words, which are appropriate. We have driven change there, and it reflects our values. New Zealand and Australia have a very strong commitment to raising animal welfare standards. It is also very important to point out that we still have complete control over pesticides and other such matters. Our approval process involves audit and assessment of a country’s system. Products entering the UK must be accompanied by certificates and a percentage are subject to physical checks to ensure that standards are maintained. We have worked very closely with the Food Standards Agency and Food Standards Scotland. This is very important and—

[Baroness McIntosh of Pickering (Con)]

My noble friend will be aware of a briefing from the Food Standards Agency, which is concerned about the increase in what is required of it. He might like to consider that.

On a slightly separate point, my noble friend said that the purpose of the Bill is that the procurement provisions will apply in Scotland. My understanding is that the Scottish Government have withheld consent to the Procurement Bill so I am not quite sure how, constitutionally, we could not be seen to be circumventing the will of the Scottish Government and the Scottish people in this regard.

[Lord Johnson of Lainston (Con)]

I thank my noble friend for both her points, the first of which is heard. The assumption is that these agencies can police our borders. Clearly, if there are different requirements on account of this trade deal—although I cannot see why—certainly, we should look into that. We covered her second point in the debate. These are concurrent powers. We have consulted consistently and continually with all the devolved nations, and we are not requiring a legislative consent Motion to run those concurrent powers.

I thank all noble Lords for their contributions to today’s debate. I reiterate my willingness to meet noble Lords and discuss this Bill further. Those who have spent time with me over the last month know that I am fully available to ensure that this Bill is a success. I am transparent and open to you and want to ensure that we learn in this iterative process to create even more effective trade deals into the future with different economies. This is not a “one size fits all” process. Just because we have an agreement with Australia and New Zealand does not mean that this agreement will be cut and pasted across to another country. Every country and economy is different and should be treated as such.

Underpinning this Bill are two extraordinarily far-sighted trade deals between our sister nations, resulting in an estimated £10 billion increase in trade with Australia and £1.7 billion increase in trade with New Zealand. There have been discussions about how we get to those figures. Professor Minford suggested a £60 billion benefit for trade with Australia; our government forecasts gave us a figure of £10 billion. I am happy to discuss with the noble Lord, Lord Purvis, how to assess these trade deals more accurately. The impact assessment and the look back will help us in that regard.

As I said to my noble friend Lady McIntosh, we have engaged with the devolved Governments at every stage of the process and have also allowed for greater parliamentary scrutiny than is prescribed in statute. We have shone the torch of the Trade and Agriculture Commission on these issues, and we have built two-year and five-year assessment breaks into the agreement. If we decide that we do not like these agreements, we can cancel them within a six-month notice period. These deals demonstrate our values and leadership on standards—that is very important and has come up in the debate today—how we operate with developing nations, labour rights, gender equality, the treatment of animals and the environment. These deals absolutely protect our agriculture industry and our standards in line with our values, while ensuring that we bring essential benefit to our consumers.

These trade agreements are designed to be flexible, with a whole range of structures established to ensure proper dialogue and recourse. As I have said, they are not some post-war steel treaties. They are, thanks to our leadership and position as the new driver of our unique free trade mission, modern, future-proofed concepts which allow our nations to grow together in commerce and trade.

These deals are being made between us and two allied Commonwealth nations, as has also been said, with the same Head of State and with those who died for our values in two world wars. We are their brothers, sisters, fathers, mothers and cousins. We already live and travel and own properties, businesses and farms in each other’s countries.

As came up earlier, our levelling-up agenda plays an important part in how we will work together in the future. I ask Members of the House to talk to some of the firms and people positively affected by these deals. Your Lordships will see the palpable excitement, as I have shown, from chapters such as the ground-breaking one on SMEs welcomed by the FSB. All that is within a consumer protection section that will ensure that our consumers benefit from greater choice and lower prices in our shops.

Contrary to critics’ view, the Government have thought out our trade strategy well. We want to ensure that our free trade agenda is indeed the framework that launches us on the path to give our citizens the choices and power to reach the ends of the earth. We should be proud of the decisions we have recently taken over our trading destiny and focus on creating a new world order, where we sit at the very centre of a series of geostrategic relationships and prosper from this network of trade and investment, shared culture and values, and build the wealth that gives us security and ultimately control over our destinies, which is at the very heart of our free, liberal and democratic-minded nation.

The Government have taken the first major step on our journey. We are proud of the modern and comprehensive deals that we have negotiated, and I look forward to the passage of the Bill through your Lordships’ House.

Trade (Australia and New Zealand) Bill

Baroness McIntosh of Pickering Excerpts

Committee stage
Monday 23rd January 2023 Lords Chamber

The noble Lord, Lord Purvis, will speak to the other amendments in the group, but I would welcome the Minister’s observations on these critical points.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to follow the noble Lord, who moved so eloquently his amendment. I lend my strong support to his Amendment 3, which encapsulates a discussion that was held at Second Reading by a number of noble Lords around the Chamber and previous legislation that we debated a year or two ago. I warmly welcome my noble friend the Minister to his place and am glad he has the opportunity to present this Bill in Committee.

It was very clear that the Trade and Agriculture Commission should have a role, and that the timing and sequence of that role in relation to trade agreements, or in this case procurement agreements, is absolutely vital. I look forward to my noble friend’s response to Amendment 3 and the other amendments tabled by the noble Lord, Lord Lennie. I particularly associate myself with Amendment 3.

Amendment 7 in my name is a probing amendment. I draw the Committee’s attention to the Department for International Trade’s impact assessment for this free trade agreement, particularly page 32, to which the noble Lord, Lord Lennie, also referred. Having been in touch with the Wine and Spirit Trade Association, I accept that it will be a beneficiary of this agreement going forward, provided that a chapter is included after the association agreement. It harks back to when we joined the European Economic Community in 1973 and were told that we would get cheap booze. Here we go again; it seems to be a relic of that time.

What is stark about table 3 on page 32 is the figures on food. Agriculture, forestry and fishing will take a change of minus 0.35%, a tumble of £48 million over 2019 figures; and, furthermore, semi-processed foods will take a tumble of 1.16%, which is a £97 million fall in equivalent growth value added. What is the issue that this Government have with farmers’ role in producing food, particularly in increasing the level of self-sufficiency? We are hovering around the 60% mark. Given the fact that we have a war on our borders, it is absolutely vital that we look to improve our food self-sufficiency. This has been recognised by my right honourable friend the Prime Minister, who remarked at the time of the leadership contest hustings last summer, which seems an awfully long time ago:

“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 … We will maintain the highest standards of animal welfare, environmental protection and food safety.”


The problem that I have with the procurement aspect of the Bill—and with the Procurement Bill itself and the trade agreement with Australia and New Zealand—is that it is completely asymmetrical on farming, forestry, agriculture and processed foods. As the noble Lord, Lord Lennie, suggested, this goes to the safeguards. Normally, we have infinite safeguards: they are not time-barred. The noble Lord referred to these being between 11 and 15 years in length. For what reason are these safeguards time-barred? This breaks with tradition in other trade agreements, procurement agreements, or whatever the Minister wants to call it. It has been incredibly difficult to table amendments, so I really feel quite pleased that I have an amendment that passed go on this.

The reason that I referred particularly to lamb and beef in proposed new subsection (1) in Amendment 7 is that they are the two sectors where our farmers stand to lose out. Also, for 18 years I represented an area next door to where these are the prime products, and I grew up in the even more upland area of Teesdale. I am concerned about these two products in particular, as well as the other £48 million that we are going to lose in this sector.

We were told at the time of the general election that our food standards in this country would be respected, and not lowered for imported food. For what reason are we seeking to reverse that commitment given in 2019? In the next group of amendments, we will talk about the concerns of the Food Standards Agency, which were flagged up in its annual report for 2021—but why should we accept products, particularly lamb and beef, that do not meet the production and food safety standards in this country, and why are we not having permanent safeguards instead of those that are time-barred? I have a further question before I get too carried away: why are the tariffs harmful to British farmers and favouring New Zealand and Australian farmers?

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I apologise for not being present during Second Reading. At that time, I was suffering from Covid and was confined to my home. Noble Lords will be pleased to hear that I am now recovered and testing negative.

Amendments 7, 9, 15 and 17 in this group deal with the impact on British farmers and the environment. I will speak to Amendments 15 and 17 in the name of my noble friend Lord Purvis of Tweed, to which I have added my name and which relate to the chapters on farming and the environment.

--- Later in debate ---

[Lord Lansley (Con)]

My Lords, it may be that I am not paying sufficiently close attention, but it struck me as rather odd that the starting point was a discussion of the advice that was given to the Secretary of State on 13 April last year by the Trade and Agriculture Commission in relation to the Australia deal and on 16 June last year to the Secretary of State on the New Zealand deal. The purpose of that advice was to answer a number of questions. To characterise them generally, they were, “Do these agreements undermine our statutory protections and our ability to protect animal welfare and human health?”—and, to characterise again, the short answer in each case was “No, it does not”. So it seems me that the starting point, not least of Amendment 3, is undermined. It seems wholly unreasonable to ask for a report from the Trade and Agriculture Commission when the TAC has already had the opportunity to give its advice to the Secretary of State.

The second thing that is missing from the debate so far is that Ministers have been very clear, not least in the letter that I think was sent to the International Trade Committee in the other place and to our International Agreements Committee, that they are committed to a monitoring report on both these agreements every two years and to a comprehensive evaluation five years after the coming into force. Some of these amendments look for earlier and more frequent reporting. I have to say, earlier reporting seems to be misplaced. It is going to take time to understand the impacts of these agreements, not least because, for example, the tariff rate quotas that are available for some of these products have not yet been absorbed, so the starting point for thinking about what is the base case for the impact of the agreements must at least allow for the possibility that, in the absence of the agreements, there might have been some increased importing from Australia and New Zealand using existing TRQs.

The third thing I want to say is about George Eustice, who I like. We have worked together, and I enjoyed working with him, but I have to say two things. Number one, if you subscribe to my view of collective responsibility—I see former Ministers in their places—it does not stop when you leave the Government subsequently. You subscribe to collective responsibility when you enter into government and you enter into collective decision-making. In my view, I stick to that—even, in my case, extending it to my coalition friends. If George Eustice did not agree with the decision that was made in relation to either of these agreements, the time to leave the Government and to leave collective responsibility was then, not at a subsequent point when he is on the Back Benches.

The second point to make about him—clearly, he said things that people will say are interesting for the future, not least on the setting of deadlines, while the Government have moved away from that idea—is that the principal argument he made about the risks associated with the agreement and food standards was the risk of the importation of hormone-fed beef. His argument that this was a risk was only because we might subsequently enter into the CPTPP and, under it, we might be subject to an investor state dispute resolution that would force us to dispense with our ban on the import of hormone-fed beef. These are extremely unlikely propositions. As the TAC made absolutely clear, despite the fact that a proportion of beef cattle in Australia are fed hormone growth promoters, none of them—nor their products—may be imported to this country, because we have a ban. So the risk presently does not arise.

[Baroness McIntosh of Pickering (Con)]

That is the heart of the problem—as we will go on to consider in the next set of amendments. Since we left the European Union, there have been no checks at our frontiers to show to what extent the meat coming into this country observes the criteria to which my noble friend referred.

[Lord Lansley (Con)]

My noble friend simply makes the point that the Government should implement the legislation that exists. We have no need to change the legislation to ban the import of hormone-fed beef or the use of hormone growth promoters on beef imported into this country, since the legislation already exists. The point is its implementation—and messing about with this Bill does not change that at all.

I have one final point. As I turn to the CPTPP and sheep farmers, I should say that my sister-in-law is a sheep farmer in north Wales. She may take a view about the New Zealand agreement, principally because of lamb imports, but she has never mentioned it to me. She probably thinks that it is a pretty remote risk compared with the many risks that she has to put up with on a daily basis.

I am UK chair of the UK-Japan 21st Century Group; my noble friend Lord Howell, who is sitting on the Front Bench, was one of my predecessors. My Japanese friends tell me that we are making good progress on our potential accession to the CPTPP. There are clearly issues. In this context, if one were critical of the Government, it would be on the risks associated with the precedent of tariff liberalisation—to the extent that it was offered in these agreements—being used by other counterparties as a basis for their negotiations, not least through the CPTPP. They may seek that in the schedules that they are looking for from us before we are allowed to accede to the CPTPP. Notwithstanding that reservation, in the view of my Japanese friends, other aspects of the negotiations stand a fair chance of being completed in the first half of this year.

On the basis of what the Government have already said about impact assessment and reporting in the future, I think the amendments in this group in particular are not required.

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[Lord Johnson of Lainston (Con)]

It was locally sourced—that is my focus, but lamb from anywhere in the UK is delicious, as is all our produce.

I reiterate my personal passion for and commitment to this important sector of our economy and the people in our farming and rural communities who work in it. This is one of the most special and unique features of our nation. As someone who grew up on a farm—many of my family are farmers and I spend what time I have, when not here working with noble Lords to promote our free trade agenda, on a farm—I can say that there is no one more sensitive to and aware of the effects of these changes on farmers and their communities. I continue to bang the drum for our agricultural products whenever I travel around the world.

It is important to emphasise that this Government consider agriculture a key part of UK trade policy. We have made this a key focus in designing these deals. British farmers are among the best in the world, and we want to ensure that farmers and producers benefit from the opportunities provided by UK FTAs, while ensuring that appropriate protections are in place for the most sensitive products. This is why we have invested so much in concepts such as farming advocates around the world and why I spend a great deal of my time trying to get investment into agricultural technology developments that will ensure that our farmers are equipped for the future and can profit fully from this work. We are a world leader in agricultural technology and new methods of planting, harvesting and husbandry. We need to repoint this important discussion—I hope to do so in future—to focus on the possibilities for the future as much as to protect the treasure that we already have.

I acknowledge the concerns that noble Lords have raised, most recently at Second Reading, pertaining to the liberalisation of agriculture, in particular that of beef and lamb. The Government have sought to balance the benefits of free trade for UK businesses and consumers with robust protections for our agricultural industry. Within the Australia and New Zealand agreements, the Government have secured a range of measures to safeguard UK farmers, which my noble friend Lady McIntosh and the noble Baroness, Lady Humphreys, wanted me to focus on in particular. I apologise if this is too detailed, but they include tariff rate quotas for a number of sensitive agricultural products, such as cheese and butter as well as beef and sheepmeat, product-specific safeguards for beef and sheepmeat from Australia, and general bilateral safeguard mechanisms that provide a safety net for industry.

The noble Lord, Lord Kerr, raised the very important point of whether this is a template for other free trade agreements. I stress that we look at every free trade agreement on its own merits; it is absolutely right that we should negotiate each one separately. What is in this agreement will not necessarily be replicated in other agreements, but I think that we have been very successful in the way we have structured these deals to provide safeguards and, as I have said in this Chamber before, the flexibility built into these FTAs to enable us to evolve the specifics over time. I hope that the broad concept and structure of how we enter these FTAs will be replicated and continue to be appointed as successfully as possible.

On agreements around agriculture and sensitive industries, we are clearly aware that every trade deal must be negotiated specifically to ensure that we get the best deal for this country. It is very important that we take the right amount of time to execute them. I hope noble Lords will join me in wishing our Secretary of State all speed in coming to sensible conclusions, while always ensuring that the quality of the deal is not sacrificed to try to conform to some arbitrary timeline. We want the best deals for the future, and it is important that they are specific to each country with which we sign treaties.

Within the Australia deal, the first measure—known as the tariff rate quota—lasts for up to 10 years. There was some discussion around this, so I would like to clarify it. Depending on the product, higher tariffs are automatically applied to imports above a certain volume threshold, known as the quota. The second measure—this is for the Australia deal—from years 11 to 15, is known as a product-specific safeguard, which has a broadly similar effect. It allows the UK to apply significant tariffs—for example, 20% for beef and sheepmeat—above a volume threshold. Additionally, on sheepmeat, if volume thresholds under tariff rate quotas in years 1 to 10, or product-specific safeguards in years 11 to 15, for sheepmeat are consistently filled, there will be an automatic reduction of the quota safeguards by 25%. That is very important. If we see a continued excess of imports in those products, we can then reduce the quota allowances to ensure that more pay higher tariffs. That is quite an innovative measure that has been put into these mechanisms.

[Baroness McIntosh of Pickering (Con)]

My Lords, I think this goes to the crux of my amendment. The NFU has specifically requested an answer to why it is time-barred. It is 15 years, as my noble friend said, for beef and lamb, but for sugar it is only eight years and for dairy it is lifted after six years. Have there been time limits in previous agreements? I think probably not, given the EU.

[Lord Johnson of Lainston (Con)]

I thank my noble friend for those comments. I do not know our previous treaty structures—those that were pre-EU were long before I was alive, but I am happy to see whether these have been replicated in other trade agreements. The point is that they are innovative, and they are designed to ensure that we can protect ourselves over a prolonged period of time, which I think is very important. We are not looking at immediate liberalisation in these sensitive areas; we are looking at having complex and well-thought-through mechanisms that protect our agricultural industry while allowing for the gradual liberalisation of our trade.

If I may carry on, it may clarify the answer to my noble friend’s question. The third measure, a general bilateral safeguard mechanism, will provide a temporary safety net for industry if it faces serious injury from increased imports as a result of tariff liberalisation under the FTA. This applies to all products. This protection is available for a product’s tariff liberalisation period plus five years, in order to allow domestic industries time for adjustment.

I hope the Committee is reassured to know that the New Zealand deal includes a range of tools to protect sensitive agricultural sectors in the UK. Tariff liberalisation for sensitive goods—for products such as cheese and butter, as well as beef and sheepmeat—will be staged over time to allow time for adjustment. There are tariff rate quotas on a range of the most sensitive agricultural products. These limit the volume of duty-free imports permitted and, in the case of sheepmeat, will be in place for a total of 15 years. A general bilateral safeguard mechanism, which provides a temporary safety net for industry if it faces serious injury, or threat of serious injury, from increased imports as a result of tariff elimination under the FTA applies to all products.

I raised at Second Reading why we do not expect products from Australia or New Zealand to flood the UK market from the current low levels at which they are imported. I believe the noble Lord, Lord Kerr, also raised this. The fact is that, in kilogram terms, 80% of Australian beef and 70% of Australian sheepmeat exports in 2021 went to markets in Asia and the Pacific. We would expect any increase in imports into the UK to displace other imports, probably those from the European Union, rather than compete with UK farmers. I think this is very important in the sense of where we see these exports going. We can be reassured that the main market for Australia and New Zealand absolutely is, at the moment, Asia. Further, diversifying the potential source of imports will help UK food security.

I point out that New Zealand already has a significant volume of tariff-free access into the UK for sheepmeat, but last year used less than half of that quota. That means that New Zealand could already export more sheepmeat to us, tariff-free, but chooses not to. I think that is something that we should bear in mind. In many instances, the quotas—particularly for sheepmeat in Australia—are not being utilised by a significant margin. That should give us some reassurance.

During this debate, noble Lords—my noble friend Lady McIntosh in particular—have also raised concerns over standards of production in Australia and New Zealand, particularly in relation to animal welfare and the environment. This is a very important point on which I want to reassure noble Lords. We are proud of our standards in the UK, which, importantly, we have retained the right to apply and to regulate in future. The deals do not provide for any new regulatory permissions for imports. All animal products imported into the UK must continue to comply with our existing import requirements—including hormone-treated beef, which was and remains banned in this country.

I am very aware of my noble friend Lady McIntosh’s comments about the Food Standards Agency. I will look into that, but I believe she is implying that there are no checks at our borders for imported meat products, and I would be completely surprised if that was the case. I will certainly look into it, but I am reassured by my officials that we run a coherent inspections regime, and that will not change. It is very important that we feel reassured that we have this regime. In fact, the reports I have read from the Trade and Agriculture Commission have referred specifically to that.

On animal rights and welfare—which is a particularly important issue to me personally—I spoke to Minister Watt, the Australian Minister for Agriculture, last week. In particular, I went to see him to discuss his commitment to this area, which he reiterated to me significantly. He also updated me on the progress of appointing a new inspector-general for animal welfare; I think the noble Baroness, Lady Bakewell, will be pleased to hear that.

The independent Trade and Agriculture Commission —a body my noble friend Lady McIntosh was instrumental in establishing—concluded on this point that the UK-New Zealand and UK-Australia FTAs do not affect the UK’s statutory protections for animal and plant life and health, animal welfare and the environment, and in some areas actually strengthen the UK’s right to regulate. It concluded in relation to the UK-Australia deal specifically that

“the FTA does not require the UK to change its existing levels of statutory protection in relation to animal or plant life or health, animal welfare, and environmental protection.”

I raised these points at Second Reading, and I believe I used that quote then. I hope I have made it very clear that our standards and protections do not change on account of our FTAs with Australia and New Zealand—I ask all noble Lords, please, to hear this. The TAC continued:

“even to the extent that the FTA imposes greater trade liberalisation obligations on the UK, as it does, for example, by reducing customs duties, the UK not only has the same rights as it would under WTO law to maintain and adopt protections in the areas covered by this advice, but in relation to animal welfare and certain environmental issues it has even greater rights than under WTO law.”

I take this opportunity to say that this is not the end of the agreements but the beginning. These deals also establish a forum for the UK to raise concerns, co-operate and share information under the FTA committee structure. This structure spans the whole of the FTAs. For example, the UK-Australia FTA provides for sub-committees covering technical barriers to trade, working groups on animal welfare, dialogues on legal services, and numerous other sub-groups and committees that will allow us, if we feel at any point that these FTAs have issues, to raise this with our trading partners formally or through other mechanisms to ensure that we come to a resolution.

I appreciate that I have gone into some detail—

--- Later in debate ---

Debate on whether Clause 2 should stand part of the Bill.

[Baroness McIntosh of Pickering (Con)]

My Lords, in this little group, I will speak to why I query whether Clause 2 and Schedule 2 should stand part of the Bill. I will also speak briefly to Amendment 20, which I realise is in the name of the noble Lord, Lord Lennie. He beat me to it; I had asked the clerk whether I could table exactly that amendment. Rather than just deleting Schedule 2, the purpose of that amendment is to request that draft regulations

“be approved before a statutory instrument can be made in England, rather than allowing them to be annulled by a resolution of either House”.

It really goes to the heart of the fact that, as we have seen, there are only skeleton outlines in this Bill of what the Government are seeking to achieve.

Clause 2 and Schedule 2 provide for different types of provision that could be made by regulations under Clause 1 where needed—for example, by consequential provision—and it gives effect to, in my case, not just Schedule 1 but Schedule 2. They retrospectively set out restrictions on the use of power by devolved authorities and provide for how regulations under Clause 1 can be made.

I refer particularly to Part 3 of Schedule 2, which states:

“The power to make regulations under section 1 in relation to … the government procurement Chapters of the UK-Australia and UK-New Zealand FTAs, or … any modification of either Chapter which requires ratification, is capable of being exercised before the agreement or (as the case may be) modification concerned is ratified.”


Referring back to earlier debate as to why these regulations are particularly pertinent and important, especially now, paragraph 10 of the Food Standards Agency’s Our Food 2021: An Annual Review of Food Standards Across the UK, its most recent review, says:

“New free trade agreements (FTAs) with Australia and New Zealand are in the process of being ratified at the time of writing. The UK Government has a statutory obligation to report to the UK Parliament on whether each FTA maintains statutory protections for human, animal or plant health, animal welfare or the environment. The FSA and FSS are providing advice on statutory protections for human health during this process.”


In relation to food coming in from the EU, the report states:

“Analysis of compliance levels in import controls checks carried out between 2020 and 2021 shows that there has not been any meaningful change in the standard of imported goods as a result of either the pandemic or the UK’s EU departure”—


so far, so good. It then states:

“The UK Government recently announced that full import controls for goods coming from the EU to Great Britain would be further delayed and replaced by a modernised approach to border controls by the end of 2023.”


If my understanding is correct, until the free trade agreements take effect and the Procurement Bill and this Bill are enacted, most of the food will be coming directly and indirectly from third countries, Australia and New Zealand, through the EU.

The report goes on to state that, until the end of this year,

“the UK food safety authorities continue to manage risks through pre-notifications, which were introduced in January 2022 for certain high-risk food and feed imports, and through enhanced capability and capacity put in place as part of EU exit planning to detect and respond effectively to food and feed incidents”.

The debate on this small group of amendments is simply to ensure that in what the report calls

“a particularly momentous period for UK food”,

we are in a position to ensure that our food is safe. Every 10 years, there happens to be a food scare or health hazard. We had BSE in the 1990s, in the 2000s we had foot and mouth disease, and in 2012 we had the fraud of horsemeat being passed off as beef. This debate gives my noble friend the opportunity to assure the Committee that either the law is sufficiently clear as it is or that regulations will be made under Clause 2 and Schedule 2, to which I have referred, ensuring that sufficient checks are in place.

--- Later in debate ---

My noble friend covered a number of other very important points in relation to standards and the importance of ensuring that we maintain the integrity of our borders. I assure her that I will personally look into the matters she has raised. I hope I will be able to reassure her that we maintain our borders to the highest possible degree of integrity.

[Baroness McIntosh of Pickering (Con)]

I realise that my noble friend and I did not have the meeting last week that he very kindly invited me to, as I was involved in other legislation. Could he perhaps write to me on the two specific questions I have asked? First, how do the Government expect to fulfil their statutory duty to report on the new obligations under this Bill to maintain protections for human, animal or plant health, animal welfare and the environment? Secondly, how and where will the food be checked: when it is coming into the country, at the borders; or when it is being offered to be eaten?

[Lord Johnson of Lainston (Con)]

I thank my noble friend for those comments, and I will be happy to respond to both questions in writing. She raises the very important point that, to have security and trust in these free trade agreements, we need to know that they are properly policed and monitored. I am completely with her on this, and I hope the reassurances I have already given will be seen as significant and can be passed on to my noble friend in the detail that she requires.

If I may come to a conclusion, I thank noble Lords again for their contributions, but I hope I have demonstrated that these amendments are not necessary, and I hope that I have provided further reassurance to noble Lords today. I therefore ask that the amendments not be pressed.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

I appreciate that intervention, and I will certainly do so. I am happy to have further meetings on this issue. I thank the noble Lord for that comment.

[Baroness McIntosh of Pickering (Con)]

I am grateful to all who have spoken and particularly to the Minister for responding.

Perhaps it is the advocate in me, but I have always worked better from a written brief. It would have been helpful for me to have had the meeting with my noble friend to explain my thinking behind the problems that I have with Clause 2 and Schedule 3. It would be helpful if he could reply to me with a copy to the noble Lord, Lord Kerr, and perhaps place a copy in the Library—at which point I will decide whether further action is required on Report. We have had a good debate on these super-affirmative regulations. I know this is something that the Law Society of Scotland has put forward at other stages of other Bills, so it has a lot of support on the right issues in the House.

What my noble friend said about the Delegated Powers Committee is right: there are a number of practitioners in the country who are concerned that the broad and unspecified powers to alter public procurement rules in the Bill should adequately reflect the values of transparency and openness that I know my noble friend is wedded to. With those few remarks, I withdraw my opposition to Clause 2 standing part of the Bill.

Clause 2 agreed.

Trade (Australia and New Zealand) Bill

Baroness McIntosh of Pickering Excerpts

Report stage
Tuesday 14th March 2023 Lords Chamber

[Lord Lennie (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, 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.

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.

[Baroness McIntosh of Pickering (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 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.

Trade (Australia and New Zealand) Bill

Baroness McIntosh of Pickering Excerpts

3rd reading
Monday 20th March 2023 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I apologise on behalf of my noble friend Lord Purvis, who is, unfortunately, unable to be here this afternoon. We thank the Minister for his comments, as well as his patience and expertise during the passage of this Bill. We thank the Bill team for their help and support, as well as the Labour Front Benches and Cross Benches. We also thank Elizabeth Plummer in the Liberal Democrat Whips’ Office, without whose help I do not think that my noble friend Lord Purvis and I would have been where we are today. We support the passage of the Bill and thank the Minister for his help.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate my noble friend on steering his first Bill successfully through the House—my congratulations go too to the whole Bill team. I am grateful to him for the time he took at every stage to talk me through. He knows of my disappointment that the Scottish Government have withheld their consent, and that this is not the deal that the British farmers would have hoped for; but we live to fight another day and I look forward to future trade Bills coming through.

[The Earl of Sandwich (CB)]

My Lords, I know that my noble friend Lord Kerr would have loved to be here. I am speaking on behalf of the Cross Benches. I was a member of the IAC until January; the Minister will remember that we had some animated conversations when he first came on the scene. He has kindly sent me a handwritten letter since then. I was sorry to miss the debate last week on agriculture but I welcome the assurances that he gave then. I am speaking now only to congratulate the Minister on taking this enabling Bill through to the end. I am glad that he has obviously enjoyed the exercise. He is not going to be one of those uncomfortable Ministers on the Front Bench, if I can put it that way.

I remind the Minister of one thing that we discussed: the need for HMG to develop a proper trade policy that explains to people what the UK stands for; that is what he was talking about just now. By this I do not mean a checklist but a framework for FTAs in which there is more mutual understanding, in advance, of the issues involved. This does not breach secrecy rules but helps the process of consultation with stakeholders—and there are many stakeholders.

We said in our report that the FTA was politically significant because it offered an insight into the Government’s vision for trade in the absence of a policy. Australia and New Zealand was a relatively easy start in this as we have so many common values and standards with them, but they are not typical of the CPTPP, which is coming quite soon and offers much wider challenges. All I ask is that the Minister and the department continue the dialogue with the IAC that was already started with the previous Secretary of State; as the Minister knows, it is an ongoing process, and perhaps he could confirm that in his reply.