Brexit: Trade in Goods (EUC Report) — House of Lords, 2017-07-18
Topic: Foreign Trade
Hazel Byford (Conservative, Centre-right): My Lords, I congratulate the committee, which was ably chaired by my noble friend Lady Verma, on its excellent report Brexit: Trade in Goods. The committee considered the UK’s conditions of trade with the 27 EU member states and more than 60 countries with which the EU has preferential trade agreements. The report focused on six major manufacturing and primary commodity sectors. Some noble Lords have raised issues for northern areas, but today I will keep my remarks to one of those sectors, the food and beverages industry. At this point, I remind the House of my farming and other interests set out in the register Food and drink manufacturers add £28.2 billion to our GDP. They generate more than £20 billion in exports. Some 400,000 people earn their living in food and drink manufacturing in some 6,800 firms. The farm-to-fork industry is worth £110 billion to the UK and employs more than 4 million people. In some ways, although people say it is a small industry, it is one of the biggest manufacturing industries. From the many recommendations within the report, I wish to focus this afternoon on three areas: first, tariffs; secondly, labour; and, thirdly, trade and regulations At paragraph 128, the report calls on the Government to give particular consideration to the implication of tariffs for the UK agricultural sector. Here, I stress the important effect that they may well have on Ireland. Higher tariffs on imports would raise the cost of food to consumers, whereas lower tariffs would reduce it but might undermine the domestic agricultural sector’s competitiveness. This point was raised recently by three university professors in their report on food matters. Professor Lang said: "UK food security and sustainability are now at stake. A food system which has an estimated three to five days of stocks cannot just walk away from the EU, which provides us with 31 per cent of our food" We face great challenges, but Defra has made it clear that it is determined to benefit from tariff-free trade for our goods which is as frictionless as possible. When the Minister responds, perhaps she may be able to give us more information. This will indeed be a challenge. In its evidence, set out in paragraph 96, the AHDB identified that EU tariffs in the agricultural sector, "differ significantly by product, being as high as 87% for frozen beef down to 3.8% on whole, fresh sweet potatoes" It is a very complex area Secondly, on the issue of labour, paragraph 34 of the report records agriculture as employing some 476,000 people. Of these, around 115,000 are regular employees, 67,000 are seasonal, casual or gang workers and 294,000 are farmers, business partners and directors. Of those 115,000 regular employees, 20% are EU nationals. On the issue of immigration, paragraph 4 of the summary states: "The ability to recruit staff from the EU-27, and move staff to and from the EU-27 … is essential", and should continue. The report claims that the Government’s Brexit policy should allow for this. Will the Minister comment on this In future, we could well attract workers worldwide from outside the EU. The question then arises: will that be subject to their having a definite job to come to in this country, whether that be for casual or skilled workers? Often we focus on casual workers, but this country needs skilled workers too. This issue is key to the future of horticulture and agriculture. Professor Lang told the committee that we, "would not get any fresh … vegetables or fruit if it were not for migrant labour … There would be no food manufacturing" That was clearly a definite overstatement, but his comments highlight the dependency of the sector on casual seasonal workers. What discussions are taking place, and has any progress been made In paragraph 182 of the report, the committee welcomes the Government’s decision to preserve existing EU regulations in domestic law. The report states, in paragraph 184, that two separate regulatory standards for the domestic and EU markets would be costly for UK businesses. In addition to this, and from a purely farming perspective, the whole question of welfare standards for livestock and of the need to protect animal and plant disease from being imported is essential. The labelling of imported goods, stating the country of origin, will help, but clearly there will need to be stronger checking once we leave the EU The report gives us the opportunity to look forward to developing new trade agreements worldwide. These past 40 years have given us the opportunity to develop special trade arrangements with our European neighbours. Hopefully, that trade will continue in future and indeed grow, but we also need exports to other countries. We are a country that over the years has always traded. If I might turn the clock back some 50 years, my father-in-law started as the youngest son of a farmer whose farm could not support one extra man on the farm, so he went and learned a trade in a sock business in Leicester. It started with two men and two machines in one shop but ended up employing 2,000 people, exporting 50% of all the socks they produced. I share this with you because his biggest bonus was when he was awarded the Queen’s award for industry for his exports, particularly to the United States I believe there is a great future out there, but we have some practical issues, which I have tried to highlight today, particularly affecting the food and farming manufacturing industries—and those two are interlinked. Other noble Lords have spoken of the close work between services and the goods that we make and sell. That is crucial, but our particular section of the industry has some bigger questions to be answered than perhaps some of the other manufacturing industries. I look forward to moving things forward. We are where we are, and we need to push ahead. It would certainly help business in these uncertain times to have a clearer steer from the Government.