Richard Thomson – 2022 Speech on the Australia and New Zealand Trade Bill
The speech made by Richard Thomson, the SNP MP for Gordon, in the House of Commons on 12 December 2022.
I rise to speak in support of new clauses 4, 5 and 6 and amendments 2, 3, 4, 5 and 17 in the name of my colleague, my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry).
The top line for us at this stage of proceedings is that we cannot support this Bill with the agricultural terms of the trade agreements left unamended, particularly as the Scottish Government have responsibility for agriculture in Scotland but have had no direct role in negotiations and remain deeply concerned by the impact that both of these agreements could have on the Scottish farming sector as well as food and drink.
These deals are being rushed through at an horrendous time for UK farmers. Farmers are already battling with skyrocketing fertiliser prices, animal feed prices jumping by on average 30%, the avian flu outbreak, the Brexit labour shortages, and the rising diesel costs, to name but a few of the issues at present. Therefore, we would think that at this point, rather than rushing on at breakneck speed, there would be opportunity to take the time to get this right—to make sure it is carefully calibrated and is in the interests of farmers and the food and drink industry, and indeed all industries across the totality of the UK economy.
Anthony Mangnall (Totnes) (Con) rose—
Richard Thomson
If the hon. Member can explain why there is such indecent haste I will be delighted to yield.
Anthony Mangnall
I apologise for interrupting the hon. Gentleman, but perhaps he might tell us what the perfect amount of time is for a trade deal to be signed?
Richard Thomson
I am not sure there is a perfect amount of time, but we can certainly spot a duff deal when it is being rushed through.
Anthony Mangnall rose—
Richard Thomson
If the hon. Gentleman will be patient and remain seated I can perhaps go through some of the shortcomings that have arisen, because we were helped enormously in coming to an assessment—
Hywel Williams (Arfon) (PC)
Will the hon. Gentleman give way?
Richard Thomson
Of course.
Hywel Williams
Perhaps the hon. Gentleman would like to inform the hon. Member for Totnes (Anthony Mangnall) that the Canada trade deal took seven years and that the much-heralded trade deal with the United States is still awaiting further progress.
Richard Thomson
The hon. Gentleman has communicated that most deftly. The House can see why there was such a rush because we were done a very valuable service the other week by the right hon. Member for Camborne and Redruth (George Eustice), who blew the gaff comprehensively when he revealed that at some point in early summer 2021 the then Trade Secretary took a decision to set an arbitrary target to conclude the trade deal by the G7. I am sure the hon. Member for Totnes (Anthony Mangnall) can see straightaway the problems in trying to conclude any trade deal on such an arbitrary timeline and that the outcomes from doing so would be suboptimal even if it were not for the revelation that was about to follow.
Anthony Mangnall
Since the hon. Gentleman has challenged me, I see no problem in setting timelines if we can achieve them, and in fact what the Government have managed to do is start negotiations with the comprehensive and progressive agreement for trans-pacific partnership, do a trade deal with Japan on digital partnerships, do a digital partnership with Singapore, undertake the Australia and New Zealand deals, look at where we can do a trade deal with India, and start negotiating with Canada. If we set ourselves some objectives, that sets a standard for what we can achieve.
Richard Thomson
If only that were actually the case—[Interruption.] When it comes to achieving good outcomes, the problem here is that this was not done from a position of strength; it was done from a position of considerable weakness, as we will go on to hear. Perhaps the hon. Gentleman was not in the House to hear what the right hon. Member for Camborne and Redruth said, but allow me to elucidate and then he might elect to put the shovel down for a moment. He said that
“at one point the then Trade Secretary asked her Australian opposite number what he would need in order…to conclude an agreement by…G7. Of course, the Australian negotiator…set out the Australian terms, which eventually shaped the deal. We must never repeat that mistake.”—[Official Report, 14 November 2022; Vol. 722, c. 425.]
I accept that there has been a duality in much of what the right hon. Member has said at different times. I wonder whether the hon. Member for Totnes is also to reveal such a duality.
Anthony Mangnall indicated dissent.
Richard Thomson
No, he is not. Somehow, I did not think that he would.
Clearly, there is nothing quite so liberating as a loss of ministerial responsibility. The right hon. Member went on to tell the House that
“the Australia trade deal is not actually a very good deal for the UK”,
that
“the UK gave away far too much for…too little in return”
and that, further, in his view,
“the best clause in our treaty with Australia is that final clause, because it gives any UK Government present or future an unbridled right to terminate and renegotiate the FTA at any time with just six months’ notice.”—[Official Report, 14 November 2022; Vol. 722, c. 424-5.]
The SNP happens to agree that that is probably the best clause in the Bill as it stands—
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
It is the only good clause in the Bill.
Richard Thomson
I hear my hon. Friend say that it is the only good clause; we are not looking to amend it.
Clearly, the right hon. Member’s views in 2022 are significantly more closely aligned with reality than those that he was obliged to defend publicly in 2021 and those which the current crop of Trade Ministers are clearly obliged to defend now.
Drew Hendry
My hon. Friend is doing a much better job than the previous guy did in his role [Laughter.] Is it not a fact that while Government Members try to defend this awful deal, not only have they lost the support of a former Minister who once supported the deal and now, freed from office, thinks it is awful, but, actually, their own Prime Minister thinks that this is a bad deal as well?
Richard Thomson
I thank my hon. Friend for that. It is quite clear that the objective was to get chalk on the board rather than to get any trade deal in place that might actually improve on or even equal or replicate that which was there. The thing is, the Government did not need to travel far to get the feedback that this was not a good deal. Scottish sheep and beef farmers could have told them that it was not a good deal; indeed, they tried to do so from the outset. They knew fine well that these deals would undercut UK farmers while delivering next to no benefits for the agrifood sector at large. It was clearly far more important for the then Prime Minister to be seen to be getting Brexit done and forging on with deals—whether they were any good or not—than to secure positive outcomes for consumers and producers in this country.
As there is clearly nothing quite so liberating as the loss of ministerial office, there is evidently nothing quite so constraining as the gaining of ministerial office. While I am glad to congratulate my constituency neighbour, the Under-Secretary of State for International Trade, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), on his elevation to his new post—this is the first chance we have had for exchanges across the Floor since he took that role—I will take him back to comments he made on the BBC’s “Debate Night” programme in March 2021. I am sure that he is already pulling that out of the memory banks. In response to a question from the audience, he said that young people are not reaping the benefits of Brexit. Surely that is a candidate for understatement of the year. I think we can now add the Scottish food, drink and agrifood sector to that, for whom there are absolutely no benefits.
Richard Foord (Tiverton and Honiton) (LD)
Will the hon. Member give way?
John Spellar
Will the hon. Gentleman give way?
Richard Thomson
I am spoilt for choice. I think I heard the hon. Member for Tiverton and Honiton (Richard Foord) first. I will then come to the right hon. Member for Warley (John Spellar).
Richard Foord
I thank the hon. Member for giving way. Mary Quicke from my part of Devon has become an export mentor, but she has indicated that exporting cheese to the Indo-Pacific is becoming more difficult. She said that
“we’ve had cheese that’s taken four weeks to leave here, with a vet’s certificate to Japan and then it sits at customs at Tokyo for three weeks.”
Given that it is now more difficult for cheese sellers to sell to the UK’s biggest market in the EU, does he agree that that is a disgrace?
Richard Thomson
Absolutely. As I was listening to the hon. Gentleman’s intervention, I was working out what my punchline was going to be, and I see that he already had it there. It certainly is a disgrace that those barriers have been put in place to hinder the exports of what I am sure is fine produce indeed.
John Spellar
Surely it is not as simple as the hon. Gentleman is making out. Did we not have a substantial trade deficit in agricultural products with the countries of the EU as well?
Richard Thomson
There may have been a deficit in totality, but I hope the right hon. Gentleman is not trying to contend that the situation has been made any easier by the trade environment we now find ourselves untimely ripped into.
We have to ask, “To what end?” Even the UK Government’s own analysis shows that the trade deal with New Zealand will deliver a mere 0.03% benefit in GDP to the UK over 15 years and the Australian deal 0.08%, all the while the UK-EU trade and co-operation agreement will lead to a contraction of UK GDP by 4.9% over 15 years.
A number of safeguards could have been put in place in the agricultural chapters to protect farmers: no full liberalisation irrespective of time period; lower quota terms; percentage controls on the ratio of frozen to fresh carcases to protect the high quality Scottish fresh meat trade; clauses that work out beef and lamb tonnage quotas in a carcase-specific way, so premium cuts are protected; seasonality clauses; clauses to ensure the exports and imports of high value meat are properly valued; and trigger safeguards that could have been applied to protect the domestic market against any surge in imports in a particular year.
On new clause 5, it is important that an assessment is carried out on the impact of implementation of the procurement chapters on hill farmers and crofters in Scotland. Many in the hill farming and crofting communities are highly economically marginal. They have a huge economic importance in terms of supporting their areas, but the economics can be precarious at the best of times and they will certainly not be made any easier by the terms of this trade deal. The risk of undercutting standards through the deal means that meat is likely to end up costing less in the UK if it is shipped in from Australia or New Zealand, rather than if it is produced at home.
Analysis by Quality Meat Scotland has concluded that New Zealand beef farmgate prices are anywhere between 25% and 30% lower than Scottish farmgate prices, and 10% lower than their Scottish counterparts for lamb, undercutting on price. Matters relating to food standards fall within the competency of the devolved Administrations, but they have absolutely no power to exclude imported products on the basis of how they have been produced or on the undercutting of standards that feed into the undercutting of prices.
Donald MacKinnon, the chair of the Scottish Crofting Federation, speaking of the 15-year-long transition period, said:
“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.”
Jonnie Hall, director of policy, National Farmers Union of Scotland, said:
“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…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.”
It is notable that the EU managed to secure the same market access into New Zealand for its exporters as the UK, but at a much lower cost to its domestic producers.
The Secretary of State has said that she is a huge believer in British farming and the role it plays in our national life, and has written about her fears of the impact that opening up our markets will have on domestic producers. We firmly believe that she should allay those fears by renegotiating the agricultural chapters of these deals with the new Australian Administration and the New Zealand Government. We should ensure that we monitor very closely the impact it has on our agricultural communities. While renegotiating, she might also want to consider the fact that Australia is one of the few countries in the world that maintains an effective absolute ban on the importation of UK beef. The Secretary of State has said that she does not believe the Department for Environment, Food and Rural Affairs raised concerns with the World Trade Organisation via the Department for International Trade on this issue. That should certainly happen, and it should certainly have been addressed in the trade deal to make sure that this barrier was lifted.
Amendment 3 is a measure designed to protect devolution and make sure that it is respected not only in law, but in spirit. Sadly, it is wholly in keeping that, even in such a narrowly focused Bill as this, the approach taken by the UK Government undermines the precepts of devolution. The Scottish Government have consistently and successfully implemented international obligations on procurement since 2006, when they first transposed EU directives into Scottish law. The Scottish Government, unlike the UK Government at certain points over the last few years, have never wavered in their commitment to upholding international law. It is our firm belief that the powers in this Bill should not be exercisable by UK Ministers in relation to Scotland without a requirement to secure the consent of Scottish Ministers. That is also the belief of the cross-party Economy and Fair Work Committee in the Scottish Parliament.
The Scottish Government have said in their legislative consent memorandum that they do not intend to lodge a legislative consent motion for the Bill as introduced, based on two concerns: first, UK Ministers would be able to make secondary legislation in devolved areas without a requirement to first seek consent from Scottish Ministers; and, secondly, the delegated power allows for implementation of the agreements as amended in the future without the Scottish Parliament knowing what any future amendments might be at the point of giving consent. Of course, the Scottish Government will continue to try to engage constructively with the UK Government to find an approach to this Bill that is acceptable, and we encourage the relevant UK Departments to do the same. However, it should never have got to the point where the Scottish Government are having to ask for these basic requirements to be respected at such a late stage in the negotiation and ratification of these deals.
It is a matter of great regret that the devolved Administrations with responsibility for agriculture, wherever they are in the UK, have had no direct role in the negotiation of these deals, and that absolutely has to change when we are negotiating future trade deals to replace those left behind.
Lloyd Russell-Moyle
Is it not the case that in most countries that have federal, confederal or other such arrangements with devolved nations, those nations are involved and embedded in the negotiating teams? Does that not show the arrogance, in relation to co-operative relations across the Union, of this Conservative party, which seems determined to fulfil the hon. Member’s party’s wish, which is to annoy people in Scotland so much that they want independence?
Richard Thomson
That is certainly an interesting take, and entirely understandable, but I would far rather be making the arguments for Scottish independence on their merit, rather than on how much we and all the devolved Administrations are being vexed by a high-handed UK Government who are over-mighty and overreaching in this respect.
We have already been forced against our will in Scotland to trade outside of the EU and to be tied to a UK Government who seem hellbent on agreeing trade agreements at almost fire-sale prices just so they can pretend that Brexit is working. That is a thoroughly invidious position to be in, but it is the position we find ourselves in, for the moment at least, and we are determined to do all we can to try to mitigate the damage on this before we go back to the issue of principle that the hon. Member has raised. Make no mistake: the impact of these agreements will be felt throughout Scotland, and to that end it is vital that not just the Scottish Government but all devolved Administrations can have a full role, with their input being listened to, respected and acted on in future negotiations.
The Bill did not have to be like this. It was entirely possible to take a longer period of time to reach a more considered view. For those absolutely hellbent on leaving the European Union, there were better ways of doing it than the unmitigated car crash that has followed from the way successive iterations of Conservative Governments have gone about it. They seem to have spent more time negotiating among themselves than negotiating with those who matter. There are better ways of doing this, and there are better outcomes that can yet be agreed. I strongly urge the UK Government to repent, go back and try to achieve something better. It is within their grasp if they have the will to do so.
