Motion to Take Note
My Lords, I can see that the Opposition are rather outgunned on this report, so it is very useful that we co-operated right across party lines in the committee. It is a bit like a Frankenstein moment, because we are bringing to life a sub-committee that died back in March but one that I found extremely competent in its work. Although the report is now somewhat old, having been produced at the beginning of this year, many of the issues are exactly the same and are live now, as they were then. Many of the questions that we asked of the Government and to which they responded are still there.
First, I welcome the Minister to the sub-committee, as it were. I am very pleased to see the noble Lord, Lord Goldsmith, in his place. The noble Lord, Lord Gardiner, came in front of us regularly, but, of course, he has moved on to the post of Senior Deputy Speaker.
It has been some time since the report came out. I shall briefly go through what has gone on during that time, but one thing we have to say at the beginning, and we say it strongly in the report, is thank goodness there was a trade and co-operation agreement, the TCA. It is there; it was landed. It is as good a free trade agreement as we were going to get given the red lines that we had. Sure, it affects only 20% of our economy but more of the European Union’s so it is rather more biased towards it. I remember many times during the evidence sessions that we had with our farming constituency that its view was that there was nothing worse than no deal, and we have saved that situation. We have a number of other frictions that I will come on to, but we have a TCA there.
Since then, of course, we have had rollover deals with South Korea, Japan and Canada and new deals with Australia and New Zealand, which I will perhaps touch on later. There is noticeably no deal with the United States and nothing there on the horizon. There is no practical fisheries agreement with Norway, which is something I also wish to come back to later in this debate.
Of the live issues that we still have, clearly, at the top in terms of temperature apart from fisheries—I will come on to that in a minute—is Northern Ireland and the protocol. We still have checks there, which are major frictions to trade within the United Kingdom. We still have not, as I understand it, solved the issue of medicines going from Great Britain to Northern Ireland. It may be that we have; I think that is being sorted out at the moment and is one of the areas that should be resolved. We still have a number of prohibited products such as seed potatoes and we are unable to import some chilled products because Northern Ireland is part of the single market for goods.
In terms of labour, we did not talk in the report about HGV drivers but they are clearly vital in the supply chain of perishable goods and we have issues there. We have issues still, I believe, with vets, with healthcare—particularly on social services—with butchers and with farm workers. I know from my own experience down in Cornwall and the south-west that we have not cropped all that we have grown because of those labour shortages.
We have issues with paperwork still. We have no single window to deal with documentation electronically. I find this quite staggering. We have had five years to prepare ourselves from that referendum result and still we have paperwork-based systems. We are still not connected, I understand, to the TRACES system for imports of animal and vegetable products. Groupage is better but still not solved. The noble Earl, Lord Stair, was unable to be with us today but, where he is based in Scotland, he sees some of this with Northern Ireland. He particularly notes veterinary surgeons being used to check details of paperwork while hardly having to bother about animal welfare and animal health. We are having to use that resource in that way.
Then there are the sanitary and phytosanitary arrangements that were not resolved in the TCA. This has been one of the big frictions in the trade in food and animals, and it particularly affects the area that we looked at in this report. Because of that friction, we have had a major fall in trade with the EU.
We have an issue on fisheries the moment. We have, maybe, a certain amount of unreasonableness—I would say absolute unreasonableness—from France and the threats it made towards our Crown territories. Again, we have an issue there that has not been sorted out. We do not have an agreement with Iceland, Greenland, the Faroes or Norway. That affects a number of our fleets, particularly that out of Grimsby. We still cannot export bivalve molluscs and there are a number of other areas that were not really foreseen.
On the chemicals side, we still have the issue of UK REACH. British chemical firms—and, indeed, foreign ones trying to export to our supply chains—are finding much additional cost that in many ways is dogmatic rather than necessary.
Having said that, a number of achievements have happened since then. We have our own emissions trading scheme in the UK, which as I understand it is working well. We now have an Office for Environmental Protection, which is but one week old, with an appointed chair and staff. Some of us might question its independence, but we have it and it will be working. That is good. Replacing the CAP we now have ELMS, which if delivered properly in the way it was meant to be—I hope that happens—will mean we have a much more environmentally friendly form of agriculture ahead of us. We have interconnectors that are still working; indeed, the Norway-UK interconnector has become operational since Brexit happened. On Euratom, many of us were concerned about that relationship and being able to trade in nuclear and radioactive products. That has been sorted extremely well, even with the United States, where we felt the Senate would get in the way. We have a universal health card as well. A number of positives have happened.
However, I have a number of questions for the Minister; perhaps I can just go through them. There are quite a few of them, and it is fine if he wants to reply to me in writing on some of them. Will the UK and EU ETSs, the emissions trading schemes, come together as we want?
I had sympathy for our not doing the EU waters Norway deal, because Norway seemed to get a lot more out of it than we did, but we still do not have a deal in the subarctic area either, and I would be interested to hear from the Minister whether he reckons we will as we move into next year.
On sanitary and phytosanitary rules, the whole Northern Ireland side and EU exports, we could get over this if we agreed to regulatory alignment as opposed to offering equivalence. Why do we not do that? We can withdraw from that whenever we want to. It would solve the short-term problem while we do not have divergence. When will that single window of documentation start?
On chemicals, we are going through UK REACH. What divergence does the Minister predict? Will that happen now?
The noble Lord, Lord Gardiner, was so involved in biosecurity. As I understand it, we are now not going to check goods coming into the UK until July 2022. How will we ensure that our biosecurity is good up until that time?
What has happened to the specialist committees, particularly the sanitary and phytosanitary and fisheries specialist working committees? Have those met yet? There seems to be a silence there.
In some ways most importantly practically, certainly for my region, will we have an extension of the seasonal workers scheme? It seems to me that now we have full control over movement of people across our borders, we can afford to make sure that supply equals demand while the electorate know that it is not going to be for ever and that we have control over it ourselves.
Those are some of the questions in our report that are still there. I will say one or two things as a conclusion. I will not go into Brexit in detail, but the thing that saddens me is the confrontational attitude we still have between the UK and the EU. France is to blame on fishing, but I believe we have had an almost proactively aggressive attitude to the European Union, which does not help any of the constituent parts of the economy that our report looked at. If Article 16 is enacted, I believe that is a threat to the TCA altogether and effectively takes us back to a no-deal Brexit, which is something that no one of any sense wants at this stage.
I come back to COP 26. I never believed the Treasury’s forecasts for Brexit that the Minister’s Government put out at the time of the referendum campaign. However, one area that I did believe was that one of the losses from Brexit would be in our influence on the continent among the other 27. The performance of the EU at COP 26 illustrates that: the EU was seen as not being a good enough player at COP 26 in Glasgow. Why was that? It was because we were not there. Whether it was the noble Lord, Lord Prescott, back in the Kyoto protocol days, Ed Davey under the coalition Government or Amber Rudd under David Cameron, we led that negotiation—we drove it from the European Union point of view. Its relative failure at Glasgow is because we were not there, and I find it unfortunate on the environmental side. We were in that last foursome—but with Alok Sharma, whom I praise along with everybody else for his work at COP 26, at COP 27 in Egypt, which now looks like being equally important, we will not be there in that cabal, or there to make sure that Europe does not backslide on its environmental needs and leadership.
This report is still alive. I look forward to the Minister’s response, and I very much hope that in all these areas we will find a way forward. I beg to move.
My Lords, it is a pleasure to follow the noble Lord, Lord Teverson, who has covered so many of the issues, and most of the ones that I would like to touch on. I feel that the title of the debate this afternoon goes well beyond Brexit. Like many others, I offer the noble Lord, Lord Teverson, congratulations on securing a debate on this report, which was our committee’s swansong back in March this year. It encapsulated a great series of reports into every possible aspect of Brexit that our remit contained, beginning with Brexit and fisheries in December 2016, almost five years ago.
I declare my family’s interest in the rural and agricultural sector.
Throughout the process of producing these reports, the staff did wonders in summoning witnesses involved in every conceivable aspect, unravelling the many technical aspects and then hammering the findings into a series of succinct reports. The Government’s response is full of the idealism that characterised much of our approach to the whole Brexit deal. As the noble Lord, Lord Teverson, emphasised, there are many promises on which we are still waiting to see whether Europe can be brought to agree with our wishes—not just on Northern Ireland. Our concerns were largely due to the reliance of various sectors on trade with Europe and the perishable commodities involved.
As we negotiated, we waited anxiously until, at the last minute, Europe agreed to grant us third-country status. Then we welcomed the Government’s achievement in gaining a tariff and quota-free deal but, as our report pointed out, they got nowhere near a sensible approach to the sanitary and phytosanitary measures.
I must thank the NFU and the National Sheep Association for giving me an up-to-date position in their sectors. Another sector greatly affected has been fishing. Since January, UK agri-food exporters to the EU reckon to have lost more than £1.8 billion in income, while we have given extended grace periods to our EU competitors to sell in our market. In particular, 30% less lamb has been sold into Europe in this period. When it comes to exporting live animals for breeding, there has been a barrier due to the complete lack of border control posts with live animal facilities, to the extent that there are now sheep breeders with orders from EU farmers valued at £40,000 each who have no hope of getting a deal.
The Government laid great emphasis in their plans on a trade specialised committee on sanitary and phytosanitary matters. Has this ever been established? What sign is there of it facilitating trade between the parties?
Like the noble Lord, Lord Teverson, I ask how much of the funding provided this year for setting up a single trade window based on electronic documents has been spent, and with what outcomes. At present, our processes are faced with between £1,600 and £4,000 of additional costs per lorry going over to Europe. The fact that we have delayed setting any further controls for goods coming in from the EU may go some way to keeping supermarket shelves stocked as we go towards Christmas, but the food production issues that we currently face are due largely to workforce availability. As a consequence, I understand that the food industry has asked for a 12-month Covid recovery visa to expand the seasonal workers scheme. Has this been fully implemented?
A couple of sections of our report were on energy and the environment, topics that occupied many hours of discussion at the recent COP 26 gathering in Glasgow. As the noble Lord, Lord Teverson, said, our committee was considerably concerned about the remit given to any Office for Environmental Protection. Given that this has now been brought into existence, it was interesting to hear the noble Lord remark that the office is fully functional. I would like confirmation on that.
I was fortunate enough to be able to attend the session which my noble friend the Minister chaired at COP 26, on nature and the environment. Forestry and farming were much in focus as areas where carbon sequestration measures are practical possibilities. For the last couple of years, the NFU of England and Wales has been aiming for net-zero production by 2040, and in Scotland the aim is 2045. The mechanisms and results are fairly new science, and it is not clear whether the current calculations are based on the complete, whole-farm carbon cycle. This may become even more important as we negotiate the present trade agreement with Australia. I believe that it is as yet unwilling to sign up to any climate agreements and yet it seems to think that, by its calculation, its meat and dairy production will be net zero before the dates that we are considering.
From my day in Glasgow it was obvious that, as well as the environment, agriculture and food play out on a global stage, so much emphasis was placed on the need to establish norms which will allow us to compare and learn from what is happening in Australia, New Zealand and even the United States. I was particularly interested to hear the approach of the US Secretary for Agriculture, whose stated policy at the conference was to achieve more effective use of fertilisers and a reduction in methane emissions and to look after his 200,000 farmers. At that rate, we can expect a lot more competition from that quarter. Can my noble friend the Minister give the Committee any indication of the Government’s view of how this will affect our farm production in the UK?
My Lords, I thank the noble Lord, Lord Teverson, and his committee for their excellent report. As he rightly said, some of it is out of date, but the basic questions are very important and still relevant, despite the Government’s response. I am the odd one out this afternoon, as I am the only Back-Bencher here who did not serve on the committee. I shall ask my noble friend a host of questions. I know that he will not be able to reply to them all today, but I hope that he will give me detailed responses in due course.
I start with fishing. Just before the Trade and Cooperation Agreement was finalised, the Government told us all that there would be an incremental benefit to the fishing industry to the tune of about £148 million by 2026. Where are the figures to justify this? We do not have them yet and we do not have a balance sheet, and it is quite wrong that the Government have not produced them. The National Federation of Fishermen’s Organisations has produced its own report, which shows a totally different figure; it shows that the fishing industry is likely to lose £300 million by 2026 and that the UK fishing fleet has serious problems ahead of it. That report was prepared by a former Defra official, so I presume it to be well based and fairly accurate.
To continue on the theme of a full report from the Government, does my noble friend agree that no assessment of the TCA provisions is relevant for fishing without including the non-quota species? Fundamentally, does my noble friend agree that any deal that allows EU fleets to catch 42,000 tonnes of fish in our waters and for us to catch only 12,000 tonnes in EU waters is doomed to be a failure and a continuation of a rather disastrous 1983 agreement?
Inevitably, leaving Europe has led to more bureaucracy. Does my noble friend agree that the cost of extra bureaucracy and filling in forms for the non-tariff barriers, health certificates, catch certificates and border checks is going to cost the fishing industry a further £24 million?
I want a vibrant, economic fishing industry, but I also want one that is environmentally friendly. British trawlers catch fish by dragging nets along the seabed; they are not the only ones to do so. On average, bottom trawling fisheries release about 1 billion metric tonnes of CO2 annually. Of that, Britain produces about 90 million metric tonnes of CO2. Why were these figures not included in the COP discussions? We produce more CO2 from the seabed than the aviation industry does—and the aviation industry is getting stick, but the fishing industry is not. Why does my noble friend not stop this abysmal habit? Only 1% of UK waters are fully protected, and 97% of our offshore MPAs are subjected to destructive practices of bottom trawling and dredging. What plans has my noble friend to change those figures?
Finally on fishing, does my noble friend agree that the economics of deep-sea trawling do not stand up, and that the UK’s marine heritage is being damaged to destruction by other nations’ fisheries in the vast majority of cases? I hope that he agrees with that; it was a statement made by his fellow Minister and our noble friend Lord Benyon when he was in another place.
Moving on to agriculture, we recently had the trade deals with New Zealand and Australia, which have put the fear of God into our farmers. There is no detail from our Government about how they are going to work with farmers to promote exports, to drive efficiency and to increase productivity in the same way that the Governments of Australia and New Zealand have been doing for many years. Let us not forget that the cost of producing lamb in New Zealand is 63% lower than in the UK, and milk is 25% lower in New Zealand.
In the foreword to the Government’s reply to the Trade and Agriculture Commission report, we find the words:
“Promoting the interests of our farmers … is a priority of our trade policy and our trade deals are delivering on this.”
How do the Australia and New Zealand trade deals tangibly benefit UK farmers? We have had no reply to that, and it is time we had one. Could my noble friend tell me how he expects the bilateral safeguard to work and for how long it will apply?
I return to the Trade and Agriculture Commission report and the Government’s response to it. Any government response that states that a report makes “innovative and far-reaching proposals” means that that report is condemned to the shelf that gathers the most dust. It is obviously too difficult for the Government to get their minds around it. What is happening to the new export council to open up these new market opportunities? Where are the details? Where is the budget? There was nothing in this year’s Budget on export promotion, so where is the money coming from for that?
As we look to the future, we must not achieve our climate change ambitions by exporting UK production of food. In the way that farmers are being treated at the moment, it is likely that we will increase the percentage of food that is brought in from abroad, rather than the home-use percentage. It must be galling for our farmers to produce high-quality food to the highest standards, only for most of it to be turned into processed food that is bad for our health. Why do we have the highest standards and the highest level of processed foods in western Europe? If that is not enough, farmers have to plough in and lose a vast amount of crops because of a lack of workforce. The crop wastage in 2021, so far, is estimated at £61 million and there is a labour shortage of 18.8%. Can my noble friend tell me what plans he has for that?
Finally and quickly on the environment, I agree with the noble Lord, Lord Teverson, about Europe not coming up to the mark on COP 26. Will my noble friend confirm that he is looking at the question of land management, and biodiversity and nature management? We have just done the Environment Bill and have ELMS coming up, but nowhere in there have we looked at how management will happen. There has never been a time when more surveys have been carried out by the Government into nature and how we treat it, and never have they changed the goalposts so often. The farmers, who are under pressure anyway, are the custodians of our countryside. We need to help them in order to help nature and biodiversity.
My Lords, I am delighted to participate in this debate, and refer to my interests as recorded in the report. Since the time I was a staffer with the Conservatives in the European Parliament—before I went on to serve with our excellent chair, the noble Lord, Lord Teverson—and prepared submissions for EU committees on behalf of our spokesman, I always wanted to serve on one of the committees or sub-committees, so I am delighted that I just snuck in before our demise. I pay tribute to our chairman, the noble Lord, Lord Teverson, my fellow members and our excellent team, Jennifer, Oliver, Laura and others, who looked after us during my time on the committee.
For the purposes of today, I will focus in particular on farming and the environment, but with a word on health and the future of the EHIC—I think that is what it is called—and clinical trials. I ask my noble friend the Minister whether he can guarantee the long-term futures of both, because they bring enormous benefits to us. We refer briefly to these in the report.
Farming faces an onslaught, in particular through forthcoming government regulations that the noble Lord, Lord Teverson, and others have referred to, as set out in the report. I met local farmers in North Yorkshire at Thirsk mart last Thursday. While prices are buoyant, there is genuine concern as we progress from the common agricultural policy to ELMS.
It is not generally understood—I learnt it for the first time—that tenants will potentially be in breach of their farming agreements with landowners, because they are technically agricultural arrangements and now the support is moving from agricultural support to environmental support. Anything the Government can do to facilitate the discussions that have to take place as a matter of urgency will be very welcome indeed. I realise that this is a private arrangement—a matter of contract between landowners and individual tenants—but it is a source of mounting concern, in particular in North Yorkshire, where almost 50% of our farms are tenanted.
On the trade and cooperation agreement, there is general relief that we have reached an agreement for tariff and quota-free trade. I will dwell for a moment on the implications for farming of the Northern Ireland/Ireland protocol in particular. While I think it is generally realistic and welcome that there is a delay until 2022, to which the noble Lord, Lord Teverson, alluded, in the arrangements for implementing checks on imports from the EU to the UK, I refer to our conclusions in paragraphs 35 and 80 of the report. Paragraph 35 says:
“Trade in food and agricultural produce between Great Britain and the EU will suffer if significant policy divergences on either side lead to tariffs and increased checks being introduced. Both sides should thoroughly assess potential trade barriers that may arise as they develop approaches to regulating and supporting food and agricultural production.”
Paragraph 80 says:
“If workable arrangements cannot be found soon for the movement of food and agricultural produce from Great Britain to Northern Ireland the potential impacts on Northern Ireland’s consumers—as well as the political implications—will be acute. All parties should continue to focus on finding solutions so that goods can be moved as smoothly as possible. We trust that Lord Frost will recognise the urgency of the situation for Northern Ireland.”
The noble Lord, Lord Teverson, related that it will be a breach of the TCA if we invoke Article 16. It is also potentially a breach of the EU withdrawal agreement that would have ramifications for all parties concerned.
As has been said, with food and other agricultural products—in particular live animals—being highly perishable, any delay at a border can be particularly costly. In their response to our recommendation 8 about a single window, the Government merely stated that they are working on creating one. They said:
“Work is underway to develop a delivery roadmap beyond 2022”.
That sounds like a very lax response. I ask my noble friend the Minister exactly where we are with this. Can the Government ensure that there will be no further delay to the introduction of import border controls and that they will work smoothly? How confident is my noble friend that they will indeed work smoothly?
Leaving the EU, no one expected that the UK Government would place our farmers in an even less competitive position by going further—by gold-plating, for example, the EU nitrates directive. Banning the spreading of manure in autumn months will cause great difficulties and increased expenditure and will pose particular problems for those in parts of the country such as North Yorkshire, where there is a very high density of livestock, and other areas, such as East Anglia, where nitrates already appear naturally in the soil in a high degree.
I also echo those, such as my noble friend Lord Caithness, who alluded to the promise made at the most recent election in two parts. It was that we would maintain the high standards of animal welfare and animal health production, which found favour with both producers and consumers alike, attracting a million signatures on a petition which, I understand, was instigated by the NFU. The flip-side of that was to ensure that any import of food and agricultural products must meet those same high standards. It is a matter of deep regret that, as alluded to by the Minister in the other place, our honourable friend Victoria Prentis, the Government may be unable to deliver on that pledge, and that free trade agreements with Australia and New Zealand already seem to pose a direct threat to the future of British farming in that regard.
On the environment, I also echo the words of the noble Lord, Lord Teverson, on the additional costs of meeting the UK register. I know that many who have been affected by this are putting out feelers to meet members of the committee and others. On fisheries, this is proving particularly problematic. Can my noble friend update us today, particularly on the concerns of the Scottish seafood industry on exports to France? It is completely dependent on those exports. It has gone very quiet; is that no longer a problem? What is the situation, to which we allude in the report, for our inshore under 10-metre fishermen? Have they now had access to the additional quota they were promised? Can my noble friend confirm, as others have asked, whether the specialist committee on fisheries has met?
On the environment, diverging environment and climatic change goals could pose challenges ahead. Will my noble friend confirm that the Government have engaged with the devolved Assemblies through the common frameworks, and will he update us today on how many common frameworks have been finalised and how many touch on those potential divergences?
I end by saying that I welcome this debate on our report and the government response. I realise that many of the questions that have been raised today will be beyond what the Minister is able to summarise in his response, and I would welcome any written answer as a result.
My Lords, as always, it is a great pleasure to follow my noble friend Lady McIntosh of Pickering, who made some extremely important points in her speech, as did all colleagues who have spoken, particularly the noble Lord, Lord Teverson. He was an admirable, exemplary chairman of the committee and it was a joy to serve under him—particularly as the committee never met. Nobody has mentioned this during the debate, but all our meetings were on Zoom and Microsoft Teams. I grew to know those two devices, to have enormous admiration for those who made it possible, but to develop an increasing hatred for the wretched business, because I could not sit, as I can now, with my colleagues, look them in the face and discuss things with them: we were all on the screen.
That is where the noble Lord, Lord Teverson, was brilliant, because he made enormous efforts to make sure that every one of us got in. We had to raise hands or press a yellow button, but his eyesight was impeccable, his judgment marvellous and we all got in. During all that time, as has been referred to, we were served by a wonderful staff, with Jennifer, our clerk, Laura and the others. They, too, were exemplary, but I have still not met them, and we will not meet them until the beginning of next month, when we are having a retrospective on the committee. I just think that ought to go on record.
I find this a somewhat dismal occasion, not just because the committee no longer exists but because—and one hates to say this—we told you so. When the noble Baroness, Lady McIntosh, quoted from paragraphs 35 and 80, my immediate reaction was would that people had taken these points seriously. The underlying lesson—and I hope the Minister takes this back—is that when you try to achieve great things to artificial deadlines you almost always fail. I made the point time and time again. I was not trying to be a remoaner; I was not trying to suggest Brexit could or should not happen. But I begged the Prime Minister in this very Room when he came to speak to a gathering of the Association of Conservative Peers not to be driven by a deadline.
Of course, what happened as a result of the deadline is the Irish protocol. The Prime Minister and the noble Lord, Lord Frost, who were responsible for agreeing it—not only commending it to Parliament but urging us to get it through—now seem to find that it is full of holes, which indeed it is.
The noble Lord, Lord Teverson, my noble friend Lord Caithness, in a perceptive and excellent speech, and my noble friend the Duke of Montrose—everyone —has pointed to things that could have been done better and to threats that now exist to British farming, in particular. Deals that have been driven through with Australia and New Zealand are going to threaten the sheep farmers in Wales, potato growers in Scotland and all sorts of other people. I took part in the debates, as I think did everyone present, on the Agriculture Bill and the Environment Bill. We welcomed both of them but their success hangs in the balance, and it is important that we notch things down a bit as we move over the next few rather difficult weeks.
The noble Lord, Lord Teverson, made an extremely good point about COP 26. Like him, I metaphorically take off my hat to Alok Sharma for the way in which he conducted proceedings. He deserves the thanks of us all, but he did not have united European back-up, because we were not able to lead it as we had done when the noble Lord, Lord Prescott, was wielding his stick a few years ago. It really is crucial, more important than anything else, that we repair relations with our European friends and neighbours. The world is getting more dangerous almost by the day, but the atlas does not change. The map of Europe does not change. France remains our nearest neighbour. Germany, although going through a difficult time at the moment, remains the most powerful member of the European Union. We are no longer part of that team and we cannot be. Talk of having another referendum is rubbish, but we owe it to ourselves to try to have the closest possible relations with our European friends and neighbours who, until a short time ago, were our partners as well.
When the noble Lord, Lord Frost, delivered his Statement in the Chamber last week, I reminded him of the famous saying—which was actually written by WS Gilbert, but it was on the desk of Harold Macmillan—that
“Quiet, calm deliberation disentangles every knot”.
This is the time when we must not bang drums or issue threats, warnings or deadlines. We must come to an agreement. The statement made by the European Union a few weeks ago indicated that it is ready for that.
Negotiations mean that everybody has to be prepared to give, take and compromise. But it would be a political tragedy of the worst sort if we did poison relations with our European friends and neighbours through over-haste. Your Lordships should think of the trouble brewing in the Balkans at the moment, the stand-off with the Polish-Belarusian border, and the trouble brewing, which has been there for a long time, in Ukraine. Never has there been a greater need for a cohesive Europe: one that can develop relations with some of the difficult countries—we must have better relations with Russia—but one that can work so far as possible together.
I have strayed off the subject a little. I do not apologise for that, because I believe this report was extremely perceptive and far-seeing. The evidence we received from some very fine people had one thread running through it: we must not leave with no deal. Thank God we did not leave with no deal, but, as the noble Lord, Lord Teverson, indicated in his opening remarks, a real bust-up over the protocol could put the deal itself in jeopardy. We must not have that. We owe it to our farmers, our fishermen and others.
It was a privilege to be on this committee. I thank the noble Lord, Lord Teverson, and all my colleagues for that privilege, and all the officials. But if this report —which is now outdated; we have all said that—can be reread in the Government and if they could realise that some of the pitfalls could have been avoided, this debate will not have been in vain. My only request to my noble friend is that he draws the attention of the noble Lord, Lord Frost, to this debate and to what colleagues have said. We are united across party, as we were in this committee throughout its deliberations, in wanting the Government and Brexit to succeed. But we must use all our diplomatic gifts—and the noble Lord, Lord Frost, is a trained diplomat—to make sure that that happens.
My Lords, I start by thanking the noble Lord, Lord Teverson, for his introduction to this report. As someone who was not on the committee, it was very useful to get that broad oversight in his introduction. As he said, it was a huge relief to many of us that there was a trade and co-operation agreement at the time. While recognising that it is great that we have this agreement, despite the tariff-free access to European markets for food and agricultural products, we have heard about some of the problems that still exist and some of the trade barriers—for example, further paperwork and checks at borders—that our markets are having to deal with. I will not go into the concerns around sanitary and phytosanitary measures as they have already been discussed by other noble Lords.
I would like to come back to a point the noble Lord, Lord Cormack, made about the issues of sticking to an artificial deadline, as I think the TCA negotiations were rushed because of that. The report said they were “agreed at extraordinary pace”, and I think this is one of the reasons why we have many of the problems and concerns that noble Lords have raised today, including increased costs and significant disruption to our food supply chain.
We know that the agri-food sector in particular has faced additional trade frictions and challenges. It is hard, as other noble Lords said, for it to remain competitive in a very changing trading market, where our high standards, which it is important to keep—and I very much support them—mean that other countries that do not have those high standards may be able to undercut us. It is really important that we keep a proper grip on this, as we go forward making future trade deals.
There has also been discussion of the fact that the full import controls will be coming in in July next year. The noble Baroness, Lady McIntosh of Pickering, asked about the plan for this, and how it would be looked at beforehand to make sure that everything moves as smoothly as possible. That is a very important question that needs to be answered.
We had quite a discussion on fisheries, so I shall not go into great detail on that, but I draw attention to a recent NFFO report that was critical of the quotas agreement, saying that there would be losses of £64 million a year unless changes were
“secured through international fisheries negotiations”.
The noble Lord, Lord Teverson, mentioned the fact that those did not seem to be happening at the moment —we do not have the deals that were being promised. Obviously, we have a current issue with France but, outside of that, I should be interested to have an update from the Minister on how further negotiations are going and when we are likely to see some.
On the environment, the TCA is clearly a long and complex agreement with many interconnecting environmental provisions, so we very much welcome the inclusion of the environmental and climate change chapter, but have some concerns about the enforceability of some of the provisions—particularly the challenge of how different policy areas may move at different speeds and how the UK will project its influence into the EU. Other noble Lords have raised that question as well. There is also the challenge of when and how we update retained EU law. Will the Government carry out timely revisions and reviews? On that point, I raise the issue that the noble Earl, Lord Caithness, raised around the environment and the impact of bottom trawling, because that may be an area on which we want to make a different rule. How will those things come into place? How does the TCA provide a minimum baseline for future free trade agreements so that we do not have an environmental race to the bottom? I know that provisions are in place to stop that, but they are cumbersome. How, practically, do we see them being used?
On something that the noble Baroness, Lady McIntosh, said, which was important, there is the issue of devolved policy-making. It is really important that we all pull together as a United Kingdom. Someone raised the point to me that the UK could find itself triggering the rebalancing clause because Wales decides that it wants to be more ambitious than the EU. How are we going to make this work properly with our devolved Administrations?
On energy, the committee agreed with industry and environmental groups that the UK and EU should prioritise linking their emissions trading systems. In response to this, the Government said that they would take forward their commitments to co-operate on carbon pricing and consider linking with the EU ETS. I am not sure whether I have missed anything on that, but it would be useful to have an update from the Minister on that.
I turn to chemicals, and the setting up of UK REACH. I have raised this a few times, in the short time I have been in your Lordships’ House, and I know that the Government acknowledge that there are challenges facing the chemicals industry—but the committee challenged the Government’s position on this.
One big area is costs in accessing data and potential increased costs if there is divergence. I want to reference the UK in a Changing Europe’s divergence tracker, which notes that, since the end of the transition period, the EU has legislated to restrict 13 more hazardous chemicals, or is in the process of doing so, only two of which Defra has said would be restricted under UK REACH. The UK in a Changing Europe suggested that this was because the UK had been slower than the EU in bringing in new chemicals regulations. It then says—which is what worries me—that
“regulatory standards are likely to be lower in the UK, especially in the early phases of the UK REACH programme”.
It also assessed that, where divergence meant there were distinct standards to comply with in Great Britain and in the EU, companies would be likely to prioritise conforming with EU standards, as it represented a larger market. My concern is that the Government may not always, whether meaning to or not, act in the interests of the chemicals industry. I would like reassurance from the Minister on how that is all going.
I want to end by briefly referencing health. I am aware that it is not the Minister’s brief, but, clearly, health is part of the report. Both the noble Lord, Lord Teverson, and the noble Duke, the Duke of Montrose, talked about the seasonal worker scheme. That is very important, but the report also talked of alarming staff shortages in the health sector—so this goes beyond seasonal workers.
Almost 15% of NHS staff in England report a nationality other than British, with 8.7% of doctors in England’s hospitals and community health services EU nationals. They also make up 5.6% of all nurses and 5.8% of scientific, therapeutic and technical staff. Although they are not huge percentages, these are a lot of people. The percentage of doctors and nurses of EU nationality also grew between 2009 and 2016, but, according to figures from the House of Commons Library, these percentages have all fallen since the referendum, which is clearly of concern, when we know that we have a large number of shortages among our NHS staff.
That also has an impact on the social care workforce. In the last decade, EU migrants became the main group of foreign-born social care workers, accounting for 80% of all new non-UK labour. Again, this of real concern. It worries us that, under the post-Brexit points-based immigration system introduced in January this year, most social care workers do not qualify as skilled workers, so they are excluded from that route. A report for the Migration Advisory Committee said that the new rules are
“expected to deprive the UK of a non-negligible source of foreign adult social care workers”
and that European Economic Area nationals have been
“a non-negligible contributor to securing adequate care workforce in an aging society”.
I am sorry to have gone on about that, but, as we go into the winter, it is a critical point that the Government need to address. I do not think that the Government’s winter plan for social care will solve all these problems. As I said, I appreciate that this is not the Minister’s brief, but if he could find out and perhaps write with the answers, I would appreciate it, because this is an important area and we need answers.
There have been recent government actions that have caused friction—other noble Lords have mentioned this. Putting France aside and the issue of the fishing dispute, I think it is important that we do not take such an aggressive stance with our nearest neighbours. There is still a lot of work to be done. The importance of maintaining good relations with the EU cannot be overstated. I would welcome the Minister’s response to my questions and his confirmation that he would certainly want to work constructively and co-operatively with our neighbours to move forward in this area.
My Lords, I am very grateful to the noble Lord, Lord Teverson, for securing the debate and to the environment sub-committee members for this excellent report, Beyond Brexit: Food, Environment, Energy and Health. We have had some excellent contributions today and I am grateful to everyone who has taken part. I start by agreeing with the last sentiment put forward by the noble Baroness, Lady Hayman. It is absolutely in all our interests that we work together, not least for the reasons that the noble Lord, Lord Cormack, cited.
The committee detailed a number of conclusions and recommendations in the report. We considered them in the Government’s published response, and I will try to provide a further update this evening. We were elected, as noble Lords will know, to get Brexit done and we have done that. We are already realising some benefits of our departure from the EU, particularly in relation to the department for which I am speaking today, Defra. We are revolutionising the way that we support farmers—I will come back to that in a second. The goal is to help them to improve the environment and animal health and welfare while reducing carbon dioxide emissions. We have passed the flagship Environment Act—it is wonderful to be able to use that term after nearly 100 hours of debate—which sets the framework for how we will deliver for the environment freed from some of the more burdensome and poorly-targeted EU directives. Freed from the common fisheries policy, we can help our fishing fleet recover and strive to be the most sustainable fleet in the world.
Before I pick up on some of the individual points made in the debate, I will briefly recap on the context of what was achieved with the TCA. It was the first time that the EU had ever agreed a deal with a trading partner based on zero tariffs and zero quotas. It is an agreement based on friendly co-operation between sovereign equals, centred on free trade and inspired by our shared history and values. I am pleased that the committee’s report recognises that many of our sectors benefit from the tariff-free access to the EU market secured by the TCA.
The agreement recognises UK sovereignty over our fishing waters and puts us in a position to rebuild our fishing fleet by regaining control of our waters and delivering increased fishing quotas through annual negotiations with the EU and other coastal states. The agreement means that the UK can now regulate in a way that suits the UK economy and UK businesses, doing things in a more innovative and effective way.
On the environment, it is worth acknowledging that the huge tangle of EU law that exists has not halted the decline in nature. That is not to say that those regulations are without value, many of them do have value, but I think it is a mistake to regard the existing ecosystem of environmental law in the European Union as being effective as a whole. We are now free to really deliver on nature recovery and biodiversity by taking what works and building on the rest, which is what I think the Environment Act seeks to do.
We are ensuring businesses get the support they need to trade effectively with Europe and to seize new opportunities as we strike trade deals with the world’s fastest-growing markets.
The UK and the EU have very similar animal and plant health measures. The Government are committed to maintaining those high standards in biosecurity, food safety and animal welfare. Indeed, it is our intention to go further in many of those areas. We have the freedom now to introduce our own SPS rules based on more up-to-date science, better targeted to manage biosecurity risks and food safety issues specific to the UK and better reflecting UK needs and priorities.
The SPS chapter in the TCA recognises that the UK and EU’s independent SPS controls must be risk based and should not create unnecessary barriers to trade. The Trade Specialised Committee on SPS, which the TCA establishes, is tasked with regularly reviewing the parties’ SPS measures and their application. The chapter allows the UK and the EU to take informed decisions to reduce their respective SPS controls where justified, with that commitment to avoid unnecessary trade barriers while respecting each party’s right to regulate. We believe it is in both parties’ interests to use this framework to reduce the rate of SPS checks required.
In answer to one of the points made by the noble Lord, Lord Teverson, the first meeting of the Trade Specialised Committee on SPS has now taken place. It provided the opportunity to take stock of our new relationship with the EU on SPS matters. Both the UK and the EU agreed on the importance of ongoing collaboration across a wide range of issues, including e-certification, animal welfare and the fight against antimicrobial resistance. At the committee, the UK raised concerns about the justification for the EU’s import conditions covering live bivalve molluscs and seed potatoes, including their impact on businesses. The UK and the EU agreed to further technical exchanges on these and future constructive discussions on import restrictions on chilled meats.
The noble Duke, the Duke of Montrose, asked, I think, when the single trade window stops. The answer is that the capabilities of the single trade window will grow iteratively over the coming years, with functionality being extended to users in stages. Work is under way to develop a delivery road map beyond 2022, and we will be engaging extensively with the broader industry and traders over the coming months to ensure that we deliver a genuinely transformative approach for users.
The noble Earl, Lord Caithness, raised so many issues that I am afraid I cannot possibly answer them all, but I will answer some and write to him afterwards on others. He made the point of the importance of nature and land use in the context of our climate battle and mentioned COP 26. One very clear win at COP 26 was our having put nature and land use at the heart of those discussions. In previous COPs, nature, forests and land use generally have always been at the margins of the margins of the debate. We have a small room with forestry experts on the outside of the conference, and discussions happen and are then completely ignored. That has changed. One of the two main leaders’ days was completely dominated by commitments being made by leaders and businesses on forests. Even some of the more sceptical environmental groups were both taken by surprise and very happy that we had a package on forests which, cumulatively, represents a turning point in our relationship with the natural world. Clearly, we have to make that stuff happen and follow through, and that is what we will do for the remainder of our presidency, which lasts a year.
I disagree with the point the noble Earl has made today and in a number of debates we have had, not least on the then Environment Bill, that the choice is between food production and ecological restoration. I know that is a crude summary of his point, but I think it is its essence. There are so many examples, both here and around the world, of food production being reconciled with the biodiversity crisis we find ourselves in. Fundamentally, no matter how difficult that is, it has to happen. If we are to stop deforestation, it means reconciling commodity production with forests. If we do not do that, all our efforts in relation to emissions reductions are worth nothing. That is the central challenge we face as a species, and it matters here in the UK just as much as in the Amazon.
The committee registered concerns from the fishing industry about the TCA. Although it did not deliver everything that we and the industry hoped for, it has delivered an uplift in fishing quota shares for the UK fleet across a wide range of stocks. The annual consultations that followed were protracted, as we know, and we know that this has also caused uncertainty. The annual consultations for the 2022 fishing year started last week, with both parties keen to make faster progress this year. In answer to the noble Baroness, Lady McIntosh, the specialised committee on fisheries, the SCF, provides a forum for discussion and co-operation with the EU in relation to sustainable fisheries management, and the first and second meetings took place on 20 July and 27 October respectively.
I am not ignoring the noble Baroness, Lady Hayman, I will come back to her point in a second. In fact, I hope the next thing I say is reassuring to her on some of the points she raised. The fish trade sector is now showing some clear signs of recovery. Overall seafood export value in July 2021 was similar to pre-pandemic levels. Exports to the EU remain 9% below pre-Covid average values, while non-EU trade is up 4%, so a semblance of normality is returning to the sector. While we are generally seeing exports recover, we recognise that there is still disruption caused by hospitality sector closures, freight issues, coronavirus and so on, and we continue to work with the sector to try to resolve those challenges. A Defra-led UK-wide seafood industry forum on trade has been established to support the seafood industry with trade and supply chains in all markets, at home and abroad. It has representation from right across the sector—small and big businesses and everything in between.
The TCA provides for limited access to specific areas of the UK 6 to 12 nautical miles zone until the end of the adjustment period, which is on 30 June 2026. Access will be limited to qualifying vessels, namely those that have historically accessed the UK 6 to 12 miles zone with a demonstrable track record of fishing between 2012 and 2016. Access arrangements for the Crown dependencies are different in the TCA. The approach of the UK and Crown dependencies throughout this year has been to implement the new access requirements of the TCA in good faith and in a reasonable and evidence-based way, recognising the sensitivities and importance for both parties.
Before I move on from fishing, the noble Earl, Lord Caithness, and the noble Baroness, Lady Hayman, mentioned bottom trawling, and I very strongly agree with both of their remarks. The ecological devastation it causes is akin to clear-cutting the Amazon rainforest; it causes untold damage. The noble Earl, Lord Caithness, mentioned the CO2 contribution caused by bottom trawling. Although the science is not clear and there are wildly varying estimates on the contribution that bottom trawling makes in terms of CO2 emissions, there is no doubt that it does contribute, and it probably contributes very seriously. Consequently, our management of the ocean should be a much more central part of our COP negotiations. But as the noble Earl and others who have taken interest in this will know, that is a very sensitive political issue which has always been shunted to the side in COP negotiations. However, I think we made significant progress at this COP, not least with the help of Secretary Kerry, who has a passion for oceans and was able to help us bring this issue much closer to the heart of the discussions. I do not pretend we are there yet; I can say only that serious and measurable progress has been made.
The TCA recognises our ongoing commitment to high environmental standards while retaining flexibility for us to tailor our approach for the UK and maintaining our strong levels of protection. This protects our sovereignty while reinforcing our role as a global leader in environment and climate policy. These arrangements are typical of the sort you find in other free trade agreements and will ensure that both parties retain full legislative autonomy while also providing reasonable assurances that both sides will not engage in aggressively anticompetitive practices in a way that distorts trade between each other. The report welcomes the inclusion of climate change provisions in the TCA. It notes that the TCA reflects the importance that both parties place on tackling climate change by making that challenge an essential element in the agreement.
I say briefly in response to the noble Baroness, Lady Hayman, who mentioned the challenges inherent in free trade agreements and the risk that poses to our own standards, we have been very clear that we will not pursue free trade agreements in such a way that our own standards are compromised. That is not to say that there are not challenges, but alongside those challenges there are a lot of opportunities, and the goal surely has to be to reach a situation where the kinds of sustainable practices that we know the world needs are favoured in trade arrangements and those things which are less sustainable face bigger obstacles. There are plenty of opportunities where the UK could be more ambitious in our pursuit of free trade agreements. I am having those discussions with the new Secretary of State for International Trade in the coming weeks, and I very much look forward to them.
The UK already has in place some of the highest environmental standards in the world and the Government have no intention of weakening or lowering them, as I said earlier. On the contrary, it is our intention to continue raising them. The UK will use the TCA committee structure to monitor EU implementation and engage with the Commission on any issue of suspected EU non-compliance, including through the dispute resolution mechanism of the TCA if necessary.
Reflecting our commitment to high environmental standards, on 9 November 2021 the UK Parliament passed into law the Environment Act 2021 to protect and enhance our environment for future generations. The relevant sections of the Act will be commenced imminently to bring about the legal establishment of the office for environmental protection. In fact, I have a bit of an update on that. The noble Duke, the Duke of Montrose, asked when the OEP will be fully functioning. I can confirm that we will commence all the relevant parts of the Environment Act to enable all the OEP’s statutory functions and duties within three months of Royal Assent, which is in roughly two and a half months from now.
The report also covers energy and carbon pricing, urging for delivery of new arrangements and concerns that consumer electricity prices could increase. The global gas price spike provides yet another good reason why we must move away from a dependency on fossil fuels and towards clean sources of energy at home. As we decarbonise our electricity system, wholesale prices will be less affected by the fluctuations caused by fossil fuel prices, and all else being equal we would expect wholesale prices under a renewables-based electricity system to be lower than our current one based on fossil fuels. This will protect consumers by reducing our exposure to these volatile prices while lowering prices as electricity becomes cheaper to produce. We already have a strong, home-grown renewable energy sector, but we need to go further to reduce our reliance and protect British consumers.
The Government are committed to developing and implementing new efficient electricity trading arrangements as agreed to in the TCA to support the further integration of renewable energy sources, along with our ambition on net zero, and our need to protect consumers from high prices. As part of that, we have recently consulted on the current arrangements for trading electricity on power exchanges in the GB wholesale electricity market and our proposal to support efficient cross-border trading. That consultation closed on 3 November. We are currently considering responses to those proposals and will publish our response soon. On carbon pricing, as noble Lords know, the UK and EU agreed to co-operate and give consideration to linking our respective carbon pricing systems under the terms of the TCA. We will be taking forward our commitments in due course.
As the report states, securing a trade agreement with the EU was a key priority for the UK chemicals sector, a point made by the noble Baroness, Lady Hayman. The agreement removes the vast majority of the £1 billion per annum tariff costs that the sector would have faced in a non-negotiated or no-deal outcome, and has been welcomed by industry. Again in answer to the noble Baroness, Lady Hayman, of course we want to support a sustainable, innovative UK chemicals sector which thrives in the longer term. This must be done without undermining the capacity of the regulator to adequately ensure that chemicals are traded on the GB market safely. Striking this balance clearly comes with challenges, and I do not underestimate the strength of feeling around the move to UK REACH and the challenges and costs of that. We have debated that many times in the House, and I recognise that the House takes a very strong view, one that has been very much noted by Defra.
We are grateful to those in industry who have worked closely with us through the complex issues around the transition, generating ideas for Ministers to consider and working with us on the practicalities of the set-up. Since UK REACH launched on 1 January, companies have successfully submitted information to HSE ahead of the key milestones for grandfathering and downstream user import notifications, via the IT service “Comply with UK REACH”. Ministers are still considering proposals put forward by industry for making changes to the UK REACH registration requirements. These are very difficult issues, which Ministers are grappling with, but they are taking the proposals seriously, so I would ask for noble Lords’ patience while they do so.
As acknowledged by the committee report, the agreement that the Government have reached with the EU means that reciprocal healthcare arrangements continue. UK residents are covered if they need urgent healthcare when in an EU member state, and the arrangements ensure that all those with long-term conditions will continue to be able to benefit from necessary healthcare in the EU. In response to the noble Baroness, Lady McIntosh, since the start of the year, over 1.5 million global health insurance cards and 240,000 UK European health insurance cards have been issued.
In relation to a question put to me on Northern Ireland, which I think was also put to me by the noble Baroness, Lady McIntosh—apologies if that is wrong—a lot of concerns have been raised by Peers about Northern Ireland generally. I confirm that there remains a substantial gap between the positions of the UK and the EU. We think and hope that that gap can be bridged, but it will clearly require very intensive discussions.
We will seize the opportunities enabled by our exit to realise ambitions to make the UK a life sciences superpower. We will use the provisions of the Medicines and Medical Devices Act 2021 to overhaul our clinical trial frameworks, based on outdated EU legislation, giving a major boost to the UK’s world-class research and development sector and getting patients access to new life-saving medicines more quickly.
The noble Baroness, Lady Hayman, kindly acknowledged that this was not an area that I normally cover, but I shall address her point on the NHS workforce. The Government are, of course, hugely grateful for the tremendous contribution that front-line workers within the health and care sectors are playing at the current time, and recognise their commitment and the dedication they have to keeping vital services running. We are committed to growing and supporting the workforce to ensure that it continues to provide world-class health and care. There are record numbers of doctors and nurses working in the NHS today.
In response to the noble Baroness, Lady Hayman, the NHS people plan recognises that international staff are critical, as she says, to a sustainable workforce in the short to medium term while domestic supply is increased. There is a gap there that needs to be filled. Recognising this, in 2020 we introduced the health and care visa and waived the immigration health surcharge for key health and care occupations to make it quicker and cheaper for international health and care professionals to come and work in the UK. The recently updated code of practice for the international recruitment of health and social care personnel will ensure that the UK remains a world leader in ethical international recruitment.
I apologise for speaking for longer than the allocated 20 minutes. I again thank the noble Lord, Lord Teverson, and his committee for this report and for his remarks earlier. I know I have not answered all the questions that were put to me. I will go through Hansard and ensure I do so in writing. In the meantime, I hand back to the noble Lord, Lord Teverson, to wrap up. I thank the Committee for its patience today.
My Lords, I thank all Members who have contributed today. I suppose I must particularly thank Members who were not members of the committee, in particular the noble Earl, Lord Caithness, and the noble Baroness, Lady Hayman. It has been an excellent debate. I have found it very interesting, and I think we have had a fairly common agenda.
One of the things I have learned in my 15 years in this House is that you do not spend a lot of time summing up after a debate. What I want to do is thank the clerks team of the committee, although they are not here—Jennifer Mills; Oliver Rix, our policy analyst; and Laura Ayres, our administrator—for the fantastic work that they did for the committee. I am sure they are all going to go on to much greater things.
The noble Lord, Lord Cormack, is right, though I had not even thought about it: this is the first time that any of the committee have met physically for some considerable time—and certainly the present membership. That is something to celebrate, perhaps.
I thank the Minister for everything he said. It is interesting that, during the whole time that I have been chair of this committee—which has been for something like five years—whenever we had a Minister from Defra in front of us, the message was that we will maintain welfare standards and we will maintain, in all our international agreements, all of those areas that British farmers have to comply with through our own legislation. But then when we have had International Trade Ministers in front of us, the emphasis from them has always been on free trade and all the benefits that British consumers will have from a much greater range of products and, dare I say it, even cheaper prices in the shops. I found it very interesting that the Minister, rightly from Defra’s point of view, emphasised the traditional line from Defra of welfare standards and equality of environmental standards.
As the noble Earl, Lord Caithness, said, the Australian and New Zealand deals just do not have that. There is no greater critic from the Government’s own side than the noble Lord, Lord Deben; I have never heard anybody more critical of those arrangements than him. It is interesting to see that divergence is still there in government.
I thank the Minister, as always, for going through all the questions he has promised to go through—those that he has not answered—and for his fulsome reply to the Committee. Again, I thank everybody for having contributed.
Committee adjourned at 7.24 pm.