Examination of Witnesses

Trade (Australia and New Zealand) Bill – in a Public Bill Committee at 2:01 pm on 12th October 2022.

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Jonnie Hall, Donald MacKinnon, Gareth Parry and Nick von Westenholz gave evidence.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin 2:07 pm, 12th October 2022

We will now hear oral evidence from Gareth Parry, senior policy and communications officer for the National Farmers Union of Wales, Jonnie Hall, director of policy for the National Farmers Union Scotland, and Donald MacKinnon, chair of the Scottish Crofting Federation. All three will be appearing via Zoom. Welcome also to Nick von Westenholz, director of international trade at the National Farmers Union. We have until 3.5 pm for this session. Please could the witnesses introduce themselves for the record?

Nick von Westenholz:

I am Nick von Westenholz, director of trade and business strategy at the National Farmers Union of England and Wales.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

Thank you, Mr Parry, for joining us at comparatively short notice. I very much appreciate you taking the time today. Will you introduce yourself?

Gareth Parry:

Thank you, Chair. I am Gareth Parry, senior policy and communications officer for the Farmers Union of Wales. Thank you for that acknowledgement.

Jonnie Hall:

Good afternoon, everyone. I hope you can hear me loud and clear. My name is Jonnie Hall. I am director of policy with NFU Scotland. I am speaking to you from Edinburgh.

Donald MacKinnon:

I am Donald MacKinnon, the chair of the Scottish Crofting Federation. I am a crofter from the isle of Lewis.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

Thank you. Some might ask why we are doing that twice, but it is because we do not know who you are even though I am reading out the names. Now we do, so we are very grateful. We now have questions from colleagues.

Photo of Nia Griffith Nia Griffith Shadow Minister (International Trade)

As I am sure you are all well aware, the Bill is about procurement. Do you feel that it will enable UK farmers and food producers to benefit from procurement by Australian and New Zealand public bodies, as much as it enables Australian and New Zealand farmers and processors to benefit from UK public sector contracts? Will you elaborate a little on the reasons you have your views?Q

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

For those of you joining us via Zoom, I can see all of you clearly, so if you raise your physical hand, we can go from there. Nick.

Nick von Westenholz:

Generally, the position of the NFU on procurement—this will not surprise you—is that we are keen to encourage it, perhaps as in the UK guidelines, which encourage the purchase of locally produced food. That is broadly shared by many MPs, that our schools, hospitals and other things should as much as possible be able to provide British food on the menu. Agreements such as those found in the trade deals, as well as the Government procurement agreement that the UK is a signatory to, put some restrictions on that. The potential quid pro quo, of course, is that we might be able to benefit from greater procurement access to overseas markets.

First, it is not clear to us exactly the extent to which food procurement will be central to the chapters in this sort of agreement; it might be other, much bigger procurements that are more likely to benefit from the arrangements, whether in the trade deals or the GPA, to a large degree because we are very far away from each other. If we are looking at a total service contract, it is not necessarily straightforward for businesses in Australia to provide that to schools or hospitals in the UK, and vice versa. Nevertheless, this potentially captures those kinds of contracts.

I am not sure that I am at the moment aware of UK businesses that are looking and eager to capitalise on this or to provide UK food directly to Australian public procurement markets. It is obviously a long way away to be doing that. I suggest that the opportunities are modest, probably both ways. Nevertheless, there is some concern that these sorts of arrangements do restrict the ability of the UK Government in future to look at ways of increasing the amount of British food subject to UK public procurement guidelines.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

Would any other witnesses like to respond?

Jonnie Hall:

Yes, if I may come in on that, first to echo Nick’s points about the need for Governments and public bodies throughout the United Kingdom primarily to source their procurement locally, certainly within the UK or within the devolved Administrations, as it is here in Scotland. One additional slight complication to this issue on Government procurement, which I am sure the Committee is well aware of, is that over the summer the Scottish Parliament passed something called the Good Food Nation (Scotland) Act. This has measures in it here in Scotland on public procurement and so on.

Alongside lots of questions around what is UK legislation on the one hand and devolved legislation on the other would be questions in my head around the intersection between UK Government procurement in the food arena and what the Scottish Government are trying to achieve through legislation here in Scotland. Maybe that is a complication too far at this stage, but I just raise that as an issue, in addition to supporting what Nick has already said.

In terms of overall Government procurement, I do not believe that food issues will be of huge significance. That is not to say that food, trade and agrifood trade issues as a consequence of the free trade agreement with Australia and New Zealand are not of huge significance. I am sure you are well aware of some of our concerns around that.

Gareth Parry:

From the FUW’s point of view, specifically with regards to procurement, it is worth remembering that New Zealand and Australia are huge net exporters, particularly of red meat and agricultural goods. It is assumed, at least, that there would be more scope for those countries to make the most of procurement contracts in the UK compared with vice-versa, where for certain products there may be an opportunity to make the most of that procurement benefit in those two countries. From our understanding, there would be scope for them to make use of our markets rather than the other way round.

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Trade)

All your organisations are very active in lobbying MPs on issues that you find of concern to your members. What is your view of the fact that the implementing legislation is being introduced for the New Zealand free trade agreement before Parliament has had an opportunity to debate the agreement under the CRaG processQ ?

Nick von Westenholz:

I do not have a concern with that specific issue of the timing of the implementing legislation. Clearly, it is the Government’s position that a number of things need to be in place before they go ahead and ratify this deal: the implementing legislation such as the Bill, certain regulations that flow from that and the requirements of the Constitutional Reform and Governance Act 2010 process itself. The chronology, as it were, is not necessarily the most important thing. They all need to be done.

What is a much bigger concern of ours is the fact that the debate on Second Reading, and I suspect some other debates on the Bill, will be used as a proxy for a general debate and discussion about the merits or otherwise of these two trade deals. This is the wrong vehicle for that, frankly. It turns out that it is possibly the only vehicle for that and we will make do with that, but we understood, through the exchange of letters from the Government and the International Agreements Committee in the House of Lords, that the process would be—and should be—a debate tabled during the CRaG process. That is important because that is the only period of time where MPs retain the ability, if they so wish—I suspect with this deal they would not have wished to do so—to delay the ratification. Once that CRaG process is completed, that power for MPs falls. That process with Australia has been completed, so MPs no longer retain the right to delay ratification under the CRaG for the Australian trade agreement.

We are where we are, but I would say that with a number of other FTAs coming down the track, it would be very good to hear a commitment from the Government that they will allow time for debate on a relevant motion—not a neutral motion—prior to the end of the CRaG period. In that case, they can satisfy normal expectations of parliamentary scrutiny and accountability for what are very important trade deals that will have a big impact on all our members.

Jonnie Hall:

May I come in here? Again, to echo everything that Nick has just outlined, the whole issue of the scrutiny of free trade agreements, particularly in the context of agrifood, has been a major concern for farming and crofting interests here in Scotland. Throughout this process in the last two years, as we saw first the Australia FTA and then the New Zealand FTA quickly follow suit, a whole host of questions were raised about the role and efficacy of the process. In particular, it rekindled the thoughts around the role of the so-called Trade and Agriculture Commission, and its powers or otherwise to essentially scrutinise FTAs in the agricultural sphere before they have gone through all of the other processes. That was rather than it being a retrospective scrutiny, by which time it was too late—the horse had bolted in many respects. There are still concerns here in Scotland, which I am sure are shared across the United Kingdom, from the agrifood sectors in that regard.

Donald MacKinnon:

I agree with the two previous comments, but I reiterate that it is so important that these trade deals are given the scrutiny that they deserve. The really important thing is that we consider all the potential unintended consequences—for our sector, in particular—of what may be well meaning motivations. To pick up on the point that Nick made, the really important thing for us is not just these trade deals that are in front of us just now, but the precedent that they set for the future, and the precedent that the process sets for the negotiation of future trade deals, the scrutiny that is applied to those and the implications of that.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

Before I call Anum Qaisar, I think Nia Griffith has a supplementary, or another question.

Photo of Nia Griffith Nia Griffith Shadow Minister (International Trade)

Q Yes, if I may, I will follow up with a couple of questions. Am I to understand from your answers to my question that you are in agreement with the Government’s own impact assessment that we will actually take a hit on GVA on agriculture and processed food products?

Nick von Westenholz:

We take the Government’s impact assessment at face value. It is not surprising, if you look at the basics of the trade deals, that the deals themselves change very little for UK exporters to Australia or New Zealand. They are open, liberalised economies already, with tariffs generally at zero, although there are some tariffs on some products. Of course, coming the other way, the deals are very liberalising—over a period of years, admittedly, but eventually we will liberalise our markets in a way that they are not for other countries that we do not have trade deals with. It makes sense that there would potentially be a negative impact in those sectors of the economy where Australia and New Zealand are particularly strong, such as agrifood. So, yes, those impact assessments sound right to us.

Jonnie Hall:

To complement what Nick has just said, for agriculture and agrifood as a whole, it looks like a potentially damaging impact, but I think we need to be a bit more nuanced about it, and look at it in terms of particular sectors in agriculture. New Zealand is very strong in terms of red meat—beef and lamb—but also dairy and horticultural production. Australia is likewise, and you can add grain to that. There are clear potential impacts for particular sectors that are already really quite vulnerable in large parts of the United Kingdom, not least in Scotland. I am thinking particularly of the red meat sector and how important that is to the rural economy of Scotland and, indeed, the whole economy. Scotch beef and Scotch lamb are iconic products, but we are not in a situation whereby we can stack it high and sell it low, as it were. Anything that comes along and undermines our position in that respect is clearly going to be a considerable threat—I use that word advisedly—to the viability of agricultural businesses here in Scotland.

Donald MacKinnon:

I agree with everything that Jonnie said there. I think of the impact, particularly on the red meat sector, which, we cannot forget, operates in some of the most fragile areas of the country and really underpins the rural economy in these areas, particularly in the highlands and islands, where my members are crofters.

I just want to add another point about timescales. Often the argument is put to us that New Zealand is not ready to flood us with lamb on day one—I am sure we will get on to the safeguards that have been put in around the 15-year transition—but that was never something that we were concerned about. This is about changes that can happen over a much longer period of time. Agriculture does not operate on year-to-year, short lifecycles. We operate in generational terms in our businesses, and 15 years is a relatively short period of time in that sense. So it is not that we are concerned that the negative impacts are going to happen straightaway. This is about the long-term future of our industry. That is what my members are concerned about.

Gareth Parry:

I would take that a step further, from a Wales perspective at least. Without going into too many details of the figures from the UK Government and the impact assessments of all the different sectors and the different nations across the UK, I think it is worth highlighting how much more Wales relies on agriculture when it comes to rural economies, rural communities, our Welsh language, and a number of other, tertiary businesses that rely on agriculture. We believe that those impacts would be much more significant in Wales.

Photo of Nia Griffith Nia Griffith Shadow Minister (International Trade)

Q You have mentioned good food and wanting to buy British. Obviously, the public are now very interested in ethical purchasing, including having high animal welfare standards. Do you think that the Bill will allow a UK public body to insist on procuring products produced to higher animal welfare standards, and thus favour UK produce? Would you suggest any ways in which the Bill could be improved or amended?

Nick von Westenholz:

I am not sure it could be done via the Bill, because I guess the Bill is simply legislating domestically for what has been agreed under the Government procurement chapters in the FTAs themselves. My understanding is that if they were to do that, they would have to go back and open up the negotiations, which are obviously completed. I think the Bill either stands or falls. I am not sure an amendment would be possible in that sense.

I would have to examine the text closely, but under the relevant chapters in the agreements and, indeed, in the wider Government procurement agreement, there are provisions that allow Governments to stipulate provisions around environmental protection and so on, and environmental standards for procurement contracts, as long as those are not discriminatory between domestic and overseas potential bidders. I am not sure that that would extend to, for example, animal welfare and those kinds of production standards, but I could not be absolutely sure about that. I would suggest that there is some degree of flexibility for Governments to stipulate certain requirements in the contracts for these public procurement arrangements, but on the question whether that extends to specific animal welfare requirements, I do not believe it would.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

I remind colleagues that the scope of the Bill is quite narrow, as Nick alluded to. I do not know whether any other witness wants to comment on that question.

Jonnie Hall:

The question raised the issue of standards, and how you could build and ensure standards through any procurement contract. We all have standards in mind around all sorts of trading arrangements, and that has been one of the major focal points of the FTAs with New Zealand and Australia, but we have to bear in mind that it is not just about animal health and welfare and environmental standards; it is about the way in which the production systems operate in New Zealand and Australia. Their costs of production are different from those in the UK, often because of the very high standards and compliance costs that go alongside production here.

Ultimately, an awful lot of procurement contracts will be negotiated on price, given that there will be a written understanding, at least, that the standards in them will be of an equitable value, if that is the right expression. It is the competing on price piece that will probably be of more concern to Scottish producers than anything else, because we operate under different agricultural production systems and our cost structures are therefore different. If it comes to Government procurement issues, it may be that New Zealand and Australian produce is more attractive simply in terms of value for money—I will call it that, but the word “value” is not right.

Photo of Anum Qaisar Anum Qaisar Scottish National Party, Airdrie and Shotts

Thank you to the panel for joining us this afternoon. There has been an indication that suppliers in other countries may receive the same commitments made to Australia and New Zealand. What impact, if any, will that have on your sector’s ability to compete for UK public sector contractsQ ?

Nick von Westenholz:

As I said at the beginning, these kinds of arrangements, whether through FTAs or more generally through the Government procurement agreement, obviously put restrictions on the ability of the UK Government to encourage purchasing of UK goods in public procurement contracts. You understand why: these are liberalising arrangements that are intended to encourage trade. But we also know that there is widescale political support for “buy British” provisions in Government procurement, so there is a tension between the sorts of provisions in these chapters and the stated desire from the Government to encourage more Government procurement of British food.

In terms of how much that will come to bear in practice, Australia and New Zealand are obviously on the other side of the world; it is not clear the degree to which they will be pitching for procurement contracts around food, but this would facilitate that if they wanted to. It is part of a wider picture of essentially facilitating more overseas provision of food in public procurement, and that is a concern if your policy objective is to encourage more “buy British” in public procurement.

Jonnie Hall:

I agree with what Nick just said. There seems to be some divergence between a policy that is intended to stimulate trade, as opposed to backing local Scottish and British food producers and manufacturers. There will obviously be some sort of trade-off in that situation, and I am not clear where that would leave Scottish producers in the longer term.

Photo of Lloyd Russell-Moyle Lloyd Russell-Moyle Labour/Co-operative, Brighton, Kemptown

NickQ , you mentioned some carve-outs around procurement on environmental grounds, but we know from the Government’s numbers, which I challenged on the International Trade Committee, that they believe that New Zealand lamb, for example, even with the import carbon, is lower carbon than British lamb. As I say, I challenged them on some of their figures on Welsh lamb, in particular, because I am not convinced of that. However, assuming that is the case, the environmental carve-out would not stand and, on price and environmental grounds, Welsh lamb would effectively be excluded from procurement. We could be in a situation where schools in Wales were not able to serve Welsh lamb to their children, and were instead serving New Zealand lamb.

The deal does not cover schools in New Zealand and Australia, because those public institutions are at the state level, not the federal level. If, for example, we produced a certain crop or fish, such as British cod, cheaper, those products would not have that easy access, so people in Australia having fish and chips would not necessarily have British fish or British potatoes. Do you not think there is an inherent unfairness in this deal? Should there be some procurement conditions in the Bill to ensure that it is about reciprocity and, where reciprocity does not exist, to allow devolved or local authorities to take a divergent approach, as Australian local authorities will be able to do?

Nick von Westenholz:

I certainly agree with the principle of what you say: these deals should be reciprocal. There are a number of elements of the Australia deal where there is an asymmetry. In some of the environmental aspects, there are provisions that apply to UK-wide environmental regulations, but only to Australian federal regulations rather than those at state level. Most Australian environmental laws actually exist at state level, so the vast majority of environmental laws are not covered by this trade deal. I would say that that is an imbalance and an asymmetry in the deal.

As I say, as a point of principle, I agree with you. The rather lengthy annexes to the FTA set out which bodies are covered at both national and sub-regional levels. It is not always easy to discern exactly what is and is not covered, so I will bow to your knowledge on the exact differences in the bodies that are covered—I would not be able to confirm that myself—but, where there are differences, we would be concerned about that.

I would temper that a little with the fact that I am not sure we think there will be a major exchange of business through procurement contracts on food as a direct result of this deal. We will need to keep an eye on that. It will probably be other, bigger industrial services contracts that are likely to benefit, so I would not want to over-egg it. However, as a point of principle, I agree with you.

Jonnie Hall:

I will add one thing quickly. There was a reference to the carbon content of lamb from New Zealand versus the carbon content of Welsh lamb, or indeed Scottish lamb. I think that would be a real sticking point in many ways, because that carbon is not necessarily calculated using the same process and the metrics may not be directly comparable. We need a level playing field in how we measure the carbon or climate impact, or indeed any other environmental impact, of production in Australia and New Zealand versus production in the UK before we can draw any sort of comparison. If you cannot do that, you have to be very careful about any assumptions you make about importing any product because of its smaller carbon footprint or any other environmental impact before you rush into any deal.

Gareth Parry:

I agree with everything that has been said. I have not seen the figures relating to the carbon footprint, but if they are correct, thank you for challenging them. I also agree with the point about carbon calculators, and as a union we have been raising that issue on a national level. The same calculator may be used to compare neighbouring farms, or even on a national scale, but the issues become even more apparent when we look further afield and discuss trade deals: the issues that arise in comparing the carbon footprints of two farm holdings five miles apart also apply when we compare the carbon footprint of a product produced in a UK nation with that of a product produced on the other side of the world.

It is really important to consider the scale of production in countries such as Australia and New Zealand, compared with the UK. I guess that has something to do with the conclusion that the carbon footprint is lower. The scale of production over there—and things are produced to different standards there, as has been said—cannot be compared to that in the UK.

Photo of Lloyd Russell-Moyle Lloyd Russell-Moyle Labour/Co-operative, Brighton, Kemptown

Q That is a fair point. The figures I quoted were from the Government’s Trade and Agriculture Commission, which gave evidence to the International Trade Committee recently. The Bill not only allows the Secretary of State to implement secondary legislation where it is required, but allows them to do so when they think it would be advisable. That is broader. We have signed an asymmetrical deal; we have given away more than we have got, and have opened up our markets more than the Australians have opened theirs to us. We will allow in a lower standard of goods, but the Australians will do likewise. The Government have sold us down the river, because we have accepted a deal written by the Australians. Should we be slightly more restrictive in this Bill? Should we say what things are required by the deal, and not give the Secretary of State any wriggle room to suddenly leverage in other things that they might want to include?

Nick von Westenholz:

As a general rule, we are nervous about the overuse of secondary legislation to implement Government policies. That goes back to the earlier point about parliamentary accountability and scrutiny.

Photo of Lloyd Russell-Moyle Lloyd Russell-Moyle Labour/Co-operative, Brighton, Kemptown

Q Hopefully through the affirmative procedure.

Nick von Westenholz:

Yes, indeed. I would not like to comment, because you would need more expert legal commentary on the precise powers available in the Bill. I sit on the Trade and Agriculture Commission to which you referred, and our experience from that supports the points made by Jonnie Hall. We found very varied calculations of the relative carbon emissions from New Zealand and UK red meat production, which is exactly the point made earlier. To give New Zealand farmers due respect, on a global scale, they have comparatively very sustainable and good global emissions—as do we; we should be proud of ourselves as well.

Photo of Bill Esterson Bill Esterson Shadow Minister (Business and Industrial Strategy)

Between the four of you, you have raised a number of concerns, including on standards, scale of production, particularly in Australia, quotas and their implementation, carbon footprints and local exemptions. If those concerns cannot be addressed in the Bill, do you think there is a way of addressing them in the Procurement Bill? If so, what sort of provisions might you want to see introduced in that legislation?Q

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

Order. The hon. Gentleman, who is a very experienced Member, tempts our witnesses to comment on other Bills. Even though he does so in the context of this Bill, that is slightly out of scope of the Bill. Perhaps he might rephrase his question.

Photo of Bill Esterson Bill Esterson Shadow Minister (Business and Industrial Strategy)

I can certainly rephrase it. What sort of provisions would you ideally like to see in this Bill?

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

Excellent. You confirm your experience and political agility.

Nick von Westenholz:

I touched on it earlier: much as we might want to say, “We can amend the hell out of the primary legislation in order to amend the FTA,” that will not happen, and I also do not think that would be right. The FTA has been negotiated by the UK Government’s negotiators, and what they have come back with has been agreed with Australia and New Zealand. Trying to change the details of it through primary legislation would simply mean opening up the negotiations again; we would have to go back and renegotiate.

I might think that there are elements of the FTA that need renegotiating, but the way to do that is to have much more transparency and scrutiny throughout the negotiation process. As I said earlier, that was agreed in the exchange of letters between the International Agreements Committee and the Government. The Government committed to sharing their objectives before negotiations opened, to sharing updates throughout the negotiations with Parliament, and to providing for a debate on an amendable motion at the end of the process. If the Government do that, one could be pretty assured that the negotiations would end up with a result that is more palatable to a whole range of UK stakeholders. That did not happen in this case, and that is why there has been serious disquiet, particularly in the farming sector, about the deals.

Gareth Parry:

Ever since the trade deals were mooted, we have been calling for a level playing field when our producers are in competition, or even greater competition, with producers in Australia and New Zealand. We could be here for hours discussing differences in production methods and standards between the countries, but my understanding is that there is no provision in the trade deals that would allow us to influence how those countries produce food and vice versa. From my understanding, that is why quotas and tariffs are used in trading across the world. If we are not allowed to influence how food is produced in another country, we use quotas and tariffs to create that level playing field. As Nick said, perhaps they cannot be incorporated to negotiate the current FTAs, but they definitely need to be considered when future trade deals come down the line.

Jonnie Hall:

I thought the issues of concern were articulated very well in the first question. If they are the issues of concern, it strikes me as being a bit odd that they would be dealt with in legislation on Government procurement, rather than in the original process governing the trade agreements. I guess I am echoing what has been said by Nick and Gareth.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (International Trade)

Q The Trade and Agriculture Commission has come up in this conversation a number of times. I hope to explore its role, and possible future role in procurement, in line-by-line scrutiny next week. Could the witnesses describe what they see as the commission’s strength, and what could be done to make it stronger still as a force for scrutinising FTAs?

Nick von Westenholz:

As I said, I sit on the Trade and Agriculture Commission, but maybe it would be right to say that I am making my comments as a representative of the NFU. Obviously, my role on the commission is as required and set out by the Secretary of State, who asks us to do what she would like us to do and says what she would like us to look at. We do that job as requested, essentially.

From the NFU’s perspective, I think the strength, or role, of the Trade and Agriculture Commission is as strong or as weak as the parliamentary scrutiny process around it. We look very closely, in considerable depth, at the standards aspects of trade deals, and we have produced two reports that go into some depth on that. The value of that is in providing parliamentarians with as much information as possible, so that they can assess the strengths and weaknesses of the FTA. Obviously, that goes alongside the broader assessments that Select Committees in both Houses make. We hope that, armed with that information, parliamentarians can then an informed decision as to whether they like an FTA or not. If parliamentarians, as I mentioned earlier, are not given the opportunity to vote on that, or even to debate it during the CRaG process, that clearly seriously undermines the effectiveness of any assessments, whether from the Trade and Agriculture Commission, Select Committees or, indeed, anything else. The scrutiny process and the role of Parliament in this is vital.

We still are using the CRaG process as the main process. As I say, I do not think that it has been used at all well in this situation, but that is what we have. That process was designed while we were a member of the EU, and really it did not envisage that free trade agreements like these would be subject to the process; it was for international treaties covering many other sorts of things. It seems to me pretty obvious that, having left the EU more than six years ago, we should design a parliamentary process, in statute, that actually deals with the fact that we are an independent trading nation doing these very important and often in-depth free trade agreements. The current situation is not designed to do that, and that is being shown up already in the Australian FTA.

Jonnie Hall:

I completely endorse what Nick says. The Trade and Agriculture Commission was set up with the best intentions, and gave the agricultural industry and probably the whole agrifood sector a bit of encouragement that proper scrutiny would take place as trade deals were being negotiated. That was enhanced even further in November 2020, when the UK Government said that the commission would be placed on a full strategy footing, to ensure that the voices of farmers, growers, those in the supply chain and environmental, animal health and welfare groups could be heard while the UK Government were securing trade deals.

However, in March 2021, the terms of reference were published by the UK Government, and they stated that TAC would scrutinise free trade agreements once they were signed. That takes the whole point of the commission away from under its feet in many ways. It would work well, was effective and, I think, did perform a useful function—as Nick says, in informing parliamentarians, more than anything else. It has now been somewhat sterilised in some ways. We still need some sort of body to function in that way.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (International Trade)

Q My last question is this. The Government have sold the benefits of the two FTAs as partly being about the huge, new, billion pounds-worth of Government procurement options that will be available. Do you think that that is one of the reasons why farming has been thrown under the bus? Was it that the opportunities in other sectors, such as Government procurement, were so good that they could afford to give so much away to the Australians? Or were there other reasons—inexperience, worries about Brexit and so on—why farming came off so badly?

Nick von Westenholz:

I would not want to give a long answer; we all have opinions on what happened with the negotiations. I would just say that if you are doing a trade deal with a country such as Australia or New Zealand—countries that are, particularly when it comes to goods, already almost totally liberalised, and are very big and effective agricultural exporters—agriculture in the UK will probably be the main sector to come under pressure as a result. If you wanted to do a deal, and particularly if you wanted to do it quickly, and wanted it to be liberalising, as was the Government’s intention, I am not sure that you could do it in any way that did not at least have the potential to have a negative impact on UK agriculture, though none of us knows exactly what the outcome of the deals will be in the next few years.

Jonnie Hall:

If you look at modern trade deals—deals in the last 20-plus years—agriculture has often been the sacrificial lamb in those trade negotiations, no pun intended, so the expression, “being thrown under the bus”, resonates quite clearly with the agrifood sector. In modern-day economies, it is in digital, tech, manufacturing and finance that great gains are to be made. We are the primary producers of a primary product; when it comes to overall value, agriculture and food products will be relegated to the tail end of a trade agreement between modern economies. If you ask other sectors of the economy, they will probably think that the agreements that have been signed are very much in their interests and create opportunity. We tend to see them in another way.

Gareth Parry:

I wanted to answer the question on the Trade and Agricultural Commission. Forgive me, but I am not 100% sure of the full list of TAC members; however, we have long had the policy that representation on the commission needs to reflect the potential impacts on the agriculture and food sectors across the UK. I emphasise the need for good representation of all nations. I fully agree with what Nick and Jonnie said about the effectiveness of the TAC. As was said, it is no secret that the agricultural sectors in both the countries that we are talking about are huge. There will always be winners and losers in these types of liberalised trade deals, and unfortunately, as we can see from the impact assessments, agriculture is predicted to be one of the sectors that is a significant loser from these deals.

Photo of Kieran Mullan Kieran Mullan Conservative, Crewe and Nantwich

To help me understand better how our arrangements compare to those of others, can you say how much scrutiny you feel MPs had of procurement arrangements when we were in the EU, as compared to now, under our independent approach?Q

Nick von Westenholz:

When we were a member of the EU, all trade agreements by the EU were scrutinised directly by Committees of Parliament. There was, through that process, a good degree of parliamentary scrutiny. At that time, Parliament retained a theoretical ability to either accept or reject all regulations stemming from the EU. A lot of people might argue that the power was exercised rarely, if ever, and that played greatly into the debate on our membership of the EU, but certainly formerly Parliament had a greater ability to oppose trade deals.

Photo of Kieran Mullan Kieran Mullan Conservative, Crewe and Nantwich

Q In reality, was that ever exercised?

Nick von Westenholz:

Not that I am aware of, no.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

Order. If colleagues have got something to say, they should say it through the Chair for the benefit of Hansard, the broadcasters, the public and most of all out of courtesy to our witnesses. Thank you Dr Mullan. If there are no more questions, I thank the witnesses for their time. In particular, if I may, I thank Mr Parry, who came in at late notice; we certainly wanted to hear from Wales.