My Lords, my Amendment 280 is in this group, and I am grateful to the noble Lord, Lord Wigley, for his support. It is slightly different from the groups of amendments that we have already heard about, although I support most of the comments made in support of those amendments.
The specifics of this amendment relate to the lamb and beef sectors, which potentially face an existential threat in the event of a no-deal Brexit. The amendment therefore calls on the Government in that event to produce a report for Parliament to deliver their analysis of the impact on the lamb and beef sectors within three months of no deal having happened.
The situation for cattle and sheep farmers in the event of no deal, or indeed a hard Brexit, is unclear and complicated. The Agriculture and Horticulture Development Board has produced a series of reports outlining the challenges facing these key livestock sectors, which are crucial to the uplands of England and pretty well the whole of Scotland, Wales and Northern Ireland.
According to ADHB, around 82% of beef exports and possibly more, amounting to £400 million to £500 million a year, goes to the EU, while 89% of lamb exports, worth more than £400 million a year, also goes to the EU. That is not only crucial to the profitability of UK livestock farms, but disruption could dramatically upset the supply and demand balance in the domestic market. There is also a significant export market in live calves and lambs for finishing, which contributes to the viability of many farms.
In the weeks after the referendum result, I was informed that in some livestock markets, lamb sales for export fell by 80%. Although demand recovered, because by definition there was no alternative source to be found at short notice, it gives an indication of how things will change. Of course, in the meantime, EU importers have had a chance to plan.
In the event of no deal, tariffs will be imposed at levels which could make the trade uneconomic. The tariff on a beef carcass is 92% and on a lamb carcass it is 45%. Not only that, there are additional tariffs on cuts which can add up to over 100%—more than the cost of the cut itself. In addition, even if we secure a tariff-free agreement, all meat products entering the EU from third countries, which will be us, have to be veterinary approved to EU standards and inspected at the point of entry. Without such approval, we will be banned from exporting lamb and beef to the EU altogether. Will the UK be able to secure EU-approved health certificates by 31 December? How will the need for border inspection affect costs? Despite assurances to the contrary, we know there will be a massive increase in bureaucracy even with a deal. The government website is advising people to prepare for this by hiring a customs agent or taking on extra staff.
The European Affairs Committee of the British-Irish Parliamentary Assembly, of which I am a member, looked at the Brexit arrangements being put in place
by the Port of Dublin at a cost of more than €30 million. They involved substantial changes to the port layout to provide time and space for inspection plus back-up lorry parks off-site to manage the flow through the port. At the moment, a beef sandwich for sale in Marks & Spencer Dublin is shipped in from Liverpool. How will that have to change in the event of a hard Brexit? How will cross-border movements be managed? It will surely depend on trust, and the refusal of the UK Government to allow the European Commission to have an office in Belfast does not bode well. The unique arrangement of the Irish protocol, and the need for cross-border movement of beef and lamb, can work only if the origins of the products are clear and transparent.
Prices of beef and lamb may fall, which may seem to be to the benefit of the British consumer in the short run. However, if there is a large-scale welfare cull by farmers unable to feed the animals with no market in prospect, much of the stock may never reach the shelves. In any case, in that situation the UK lacks the cold storage to absorb a mass cull on this unprecedented scale. At the same time, if it sees the rearing of sheep and cattle undermined and bankrupt farmers—some of them will be bankrupt in these circumstances—leaving the sector, it could lead to future shortages and a radical change in the landscape, especially of our uplands. To prevent that happening will require rapid and substantial government intervention.
It is argued that we can find new markets, but in a fiercely competitive international marketplace we will not be able to replace the volume and value of the EU market any time soon. On day one, we lose the trade deals in place for the EU, with in most cases no successor deal in play or in short or even medium-term prospect. In any case, what is the cost and environmental logic of shipping meat across the world instead of to our neighbours? I know New Zealand does it, but on a radically different agricultural regime which we cannot match. For UK farmers, it may not even be profitable. If we leave the transition without a deal, the disruption will be immediate and catastrophic. We will not have significant alternative trade deal markets. The likelihood of any deal with the USA by then is nil. If a deal is ever negotiated, it will be on “America first” terms, and if we end up importing products that do not meet our own or EU standards the EU will insist on rigorous measures to prevent them reaching its markets.
Obviously, this is a probing amendment, but it has serious intent. No deal would plunge the sector into immediate, and for many farmers existential, crisis. A report within three months will not be enough without immediate action, but at least farmers will know that there will be a quick assessment. I urge the Minister to accept the amendment or to propose a similar government alternative. We are facing not just the prospect of millions of lambs for premature slaughter but the decimation of a sector which dwarfs the fishing industry in its importance in terms of jobs, value, heritage and landscape, yet is largely ignored by Government and the media. I hope the Government and the House will recognise that no deal will be so disruptive in this sector that it will transform British farming for a generation and change the landscape of much of the United Kingdom.