Water Industry (Financial Assistance) Bill

Caroline Spelman Excerpts

Wednesday 29th February 2012 Commons Chamber

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

I beg to move, That the Bill be now read a Second time.

In December, the Government published “Water for Life”. The White Paper set out many of the challenges facing the water sector. These challenges are not just about how much water we have available now and in the future; they range from the environmental impact of water management to the means by which we deal with waste water and, not least, the issue of affordability.

There have been dramatic improvements in the health of many of our rivers, but more needs to be done. The House will recall that the Government have invested £92 million to improve our rivers and waterways. Despite that, however, over-abstraction and pollution of our rivers, lakes and streams means that only a quarter of our water bodies are fully functioning ecosystems. The water and sewerage sectors have, though, made significant progress. More than £90 billion has been invested in the 22 years since privatisation to reduce the water industry’s impact on the natural environment and to continue to deliver high-quality drinking water while keeping water bills generally affordable.

It is also worth noting that last year, despite the driest spring on record, there were no hosepipe bans, which was testament to the 36% reduction in leakage achieved by the industry since privatisation.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

I do not want my right hon. Friend to digress too far from her speech. She mentioned hosepipe bans last year, but there are likely to be bans this summer owing to the lack of rainfall now. Has any thought been given to the long term and to providing a national grid for water so that we can share the water supply up and down the country?

[Mrs Spelman]

Thought has been given to that. We had a drought summit last week, and I have said publicly that hosepipe bans are more likely this year because we have had our second dry winter. The important point, however, is local connectivity. That is the key. Water companies explained to us at the summit how they are connecting to their neighbours. It is important for the House to know that transporting water over a significant distance is prohibitively expensive. The idea of building a pipeline to transport water from the north-west, which pleasantly has it in abundance, to the south-east, which traditionally does not, might sound attractive, but it is prohibitively expensive. However, local connectivity produces, in essence, a virtual national grid.

Today, our reward for all that investment is world-class drinking water and a cleaner environment. Water supplies are also safer, better and more secure than ever before. Water and sewerage services also remain relatively inexpensive compared with other household bills, and are good value for money. The average bill stands at just over £1 a day. At the same time, water companies are investing £22 billion over the current five-year price round in mains replacement, flood resilience, river improvements and better water quality in 55 wetlands and bathing areas.

However, a minority of customers struggle to pay their water charges, either because they are on low incomes or because they live in areas where bills are higher than average. In fact, 23% of household customers across England and Wales spend more than 3% of their disposable income on water and sewerage charges. We now want to start tackling that problem. The Water Industry (Financial Assistance) Bill will allow us to provide support to keep bills down in the south-west and to reduce the risk of future infrastructure developments, such as the Thames tunnel super-sewer, raising bills disproportionately. Clause 1 creates a general power to enable the Government to make a payment to water companies for the purpose of reducing charges payable by customers. The only circumstances under which we currently envisage using that general power is in support of South West Water customers. We believe that the circumstances they face are exceptional.

Anna Walker’s review of charging for household water and sewerage services, which was commissioned under the previous Government, identified why households in the south-west face the highest water bills in the country. At privatisation, South West Water had the lowest regulatory asset base per property. Since then, the company has had to invest around £2 billion to raise the standard of its infrastructure to the same level as the rest of the country. With comparatively fewer customers, the cost of new investment per property has been higher there than anywhere else. The benefits of that investment include improved water quality, reduced leakage, cleaner beaches and better bathing water quality, as enjoyed by the south-west’s many visitors. However, the costs have been borne solely by South West Water customers, whose bills have risen as a result. I would like to pay tribute today to hon. Members past and present in all parts of the House who have devoted years to raising the profile of this historic unfairness on behalf of their constituents.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Does the Secretary of State accept that average water bills across the country are set to rise by almost 6% in April and that this Bill will do nothing to help the vast majority of people, who have seen their incomes cut or frozen? Why should water companies not have to tighten their belts like everybody else?

[Mrs Spelman]

I can give the hon. Gentleman the assurance that water companies are indeed tightening their belts like everybody else. The rise that he described is the one set out by the economic regulator Ofwat, as an indicator of the overall level of inflation, which has not a little to do with the economic mess that we inherited from the previous Administration. However, the important point for the hon. Gentleman is this. He and I share the use of Severn Trent Water’s services, and companies such as ours will be able to introduce a company social tariff, which would assist the most vulnerable in the water area where we reside. Indeed, it would be open to every company to do so, and we have published a consultation about the company social tariff.

[Andrew George (St Ives) (LD)]

Let me congratulate my right hon. Friend on bringing forward this measure and remind her of the cross-party nature of the origins of the Bill and the fact that we have been working towards it across all parties for many years, including under the previous Administration, and not only following the Anna Walker review, as there has clearly been every intention of addressing what has been a clear historic unfairness for South West Water customers.

[Mrs Spelman]

My hon. Friend is quite right. Indeed, I look across the Chamber to the right hon. Member for Exeter (Mr Bradshaw) as a demonstration of the cross-party consensus that existed, which I have acknowledged. The diligence with which south-west constituency Members raised awareness of this historic unfairness is the reason our Government have sought, finally, to do something about it and stop turning a deaf ear to families struggling with that historic legacy, which is what had happened for too long.

There are limits to the help that we can give, because of the vast economic deficit that we inherited. However, we believe that the Government should help to correct the historic inequity that has left water bills in the south-west so markedly out of kilter with those elsewhere in the country. We have therefore committed to funding South West Water to enable it to cut bills by £50 a year for all household customers. The payments will start in April next year and will be maintained to the end of the next spending review period. The £50 reduction will be transparent on customers’ bills and, contrary to the impression that might have been gained, will not provide any sort of benefit to South West Water. It will simply be passported straight through to the householder, who will receive that money in full.

We take pride in helping hard-pressed families in the south-west, but we recognise that the challenge of helping vulnerable customers with water affordability problems is a different and more general problem that can be felt in households anywhere in the country, as the hon. Member for Birmingham, Selly Oak (Steve McCabe) suggested. As constituency MPs, we all know the families that we are talking about. That is why our water White Paper has set out definitively the dual approach that we are taking to tackling affordability issues. First, we are taking measures now to enable water companies to introduce social tariffs and to tackle bad debt. Secondly, over the longer term, we are introducing a package of reforms to increase competition and innovation in the industry that will help to keep bills down and improve customer service.

We consulted recently on how water companies could design social tariffs to reduce the bills of those who would otherwise struggle to pay in full. We will publish final guidance in the spring to enable companies to bring forward social tariffs in their charging schemes from 2013. Water companies’ responses to the consultation have shown their commitment to addressing customers’ affordability problems. Many already have schemes in place, such as trust funds, matched payment schemes, referrals to benefits advice and some existing social tariffs, but we have to be realistic in acknowledging that bad debt is also a serious problem in the water industry.

Bad debt adds an average of £15 to all paying customers’ bills, and this Government are taking action to address that. We are consulting on measures to reduce bad debt, and we are considering two options. The first is a regulatory measure that would make landlords liable for the water charges for their tenants’ properties if they failed to supply details of those tenants to the water company. However, we are mindful that the measure has to be proportionate and easily administered, so we are also consulting on whether we should ask landlords to share their tenants’ details with water companies voluntarily.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

Will the proposals that the Secretary of State has just mentioned be similar to the present regulations involving landlords and energy companies, or might they be somewhat different?

[Mrs Spelman]

Electricity utility bills are the domain of the Department of Energy and Climate Change, rather than the Department for Environment, Food and Rural Affairs. We are seeking to ensure that people who use water pay for it; it is a question of fairness. Water has historically been treated somewhat differently from other utilities such as electricity and gas, so there might be some differences in the details of the proposals. The hon. Lady will have an opportunity to raise that point as part of the consultation.

This Government are going to get a grip of the issue of bad debt, which is forcing up bills for those who do the right thing and settle their bills on time. We are on the side of those who play by the rules and pay their bills in good faith and, unlike the previous Government, we are going to ensure that their interests are properly served by clamping down on those who do not, or will not, pay their bills.

Despite the considerable progress that has been made on cleaning up our water environment, challenges still remain, not least in the river that ebbs and flows outside these very walls. The House has previously debated the fact that London’s sewerage system is operating close to capacity. We are now at a stage at which waste water containing untreated sewage overflows into the Thames between 50 and 60 times a year, involving an average total of 39 million cubic metres a year. The sewage discharges kill fish and leave litter and debris floating in the water. Because of the tidal ebbs and flows, that debris can take up to three months to reach the mouth of the river, and frankly, it stinks—just ask David Walliams. Hon. Members will recall his Sport Relief challenge last spring to swim 140 miles along the length of the Thames here to Westminster. His challenge should have been the distance, the strong currents and the undertows, not the quality of the water he swam in—water that was bad enough following heavy rain to place his entire endeavour in jeopardy.

We might not quite face the “Great Stink” of 1858, when the stench of sewage led to this House’s curtains being soaked in chloride of lime in an attempt to disguise the overpowering smell and, ultimately, to Parliament being suspended, but the sewer outflows will only get worse with population growth, increased urbanisation and more extreme rainfall events caused by climate change. This, as I am sure all Members will agree, is unacceptable.

We are the world’s seventh largest economy; this is our capital city; this city is a shop window for our entire country—and the status quo is simply not good enough. This Government are going to put the “Great” back in “Great Britain”—a Government who are showing that Britain is open for business and competing globally. That is why we need a 21st century solution, not a 19th century one that would still rely on allowing the Thames to function as a sewer.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Over 1 million customers of Thames Water are in what is termed water poverty. The Thames tunnel, which I support, is estimated to cost something in the region of £4.2 billion, putting £1 a week on the bills of Thames customers. What are the Government going to do to ensure that more people will not fall into water poverty as a result?

[Mrs Spelman]

Naturally, Thames Water will be one of the water companies looking at a company social tariff. That provides a means, as with Severn Trent Water and every other water company, of really helping the most vulnerable customers. It is important, too, to put in context what Thames Water customers, probably including some hon. Members, pay now. Unlike South West Water, Thames Water currently has significantly below average water bills. The average combined water and sewerage bill is £356 a year. South West Water ratepayers pay £517 a year, whereas Thames Water’s ratepayers have a combined bill of £319 a year. We are starting with Thames Water’s ratepayers who have a significantly below average bill.

[Mr Andy Slaughter (Hammersmith) (Lab)]

rose—

[Mrs Spelman]

Let me make a little progress, if I may.

We need a solution that prevents sewage from entering the Thames in the first place. Today, the proposed Thames tunnel offers the most timely, comprehensive and cost-effective solution to the combined sewer outflow problems. We are very aware, though, of the impact its construction would have on local communities. Thames Water has just finished its second public consultation on its proposals, and will consider the responses it has received. It plans to publish its response in the latter half of May. Thames Water will continue to work hard with those potentially affected to minimise the impact where practicable.

We recognise that the large and complex Thames tunnel project comes at a cost, which will impact on Thames Water sewerage bills, but we are confident that the bills would still remain below the current national average and below the average bills of Southern, Anglian, Wessex and Severn Trent Water customers—and well below those of South West Water customers.

[Mr Slaughter]

Does the Secretary of State agree that

“the cost of the tunnel is too large to justify the environmental benefits”,

and that the

“Projected costs ... outweigh the advantages of a cleaner river”?

[Mrs Spelman]

Is the hon. Gentleman saying that his party is not in favour of trying to clean up the sewage out of the Thames? He will know that the initial study on the Thames tideway was launched when his party was in power—in 2001—and that a significant amount of time was spent looking at alternatives and carefully assessing with the greatest rigour what the costs of such a complex project might be. Just to put this in context, the proposed cost for the Thames tunnel is comparable to the amount having to be spent in Paris to do almost exactly the same thing, and on what the German Government are having to do to deal with an outdated system on the Rhine-Ruhr. So I do not accept his argument that the expenditure on cleaning the sewage out of the Thames is not justified.

The objective of our approach is to help relieve the extent to which households in London are being asked to contribute. As I said in my written ministerial statement on 3 November 2011, the Government believe that the private sector can and should finance this project, but we accept that there are some risks that are not likely to be borne by the private sector at an acceptable cost. We are willing, in principle, to provide contingent financial support for exceptional project risks where this offers best value for money for Thames Water’s customers and taxpayers. However, I will want to be assured that, when we offer this contingent support, taxpayers’ interests remain a top priority. We are working with Ofwat, Infrastructure UK and Thames Water to ensure that the financial structure for the proposed Thames tunnel includes safeguards, so that the likelihood of Government support being called on is minimal.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I do not oppose the Bill at all, but may I just alert my right hon. Friend to something? Leaving aside the arguments about whether there should be a full tunnel or another solution, which I hope to address if I am called to speak, there are concerns about the Government giving money to a company such as Thames Water. It is not a very transparent organisation, being a private equity-funded company that has 10 layers of corporate structure, including in tax havens in some parts of the world. The Government should attach tough conditions to support for any water company if this is to be seen as transparent and good value for money.

[Mrs Spelman]

I share the right hon. Gentleman’s concern that there should be rigour in this exercise, and I have just talked about the safeguards we are seeking. I can also assure him that we have been advised by Ernst and Young that the projected cost of this project does represent value for money, but the rigour will continue to be maintained throughout the elaboration of the project.

[Several hon. Members]

rose—

[Mrs Spelman]

I wish to make a little more progress.

We believe that simply having this power available will help us to maximise private sector investment in the tunnel and keep the cost of financing down. The Bill in 1858 that provided the money to construct a new sewer scheme for London, and to build the Embankment in order to improve the flow of water and of traffic, was rushed through Parliament and became law in a mere 18 days. Although we do not anticipate such swift progress, we need to ensure that assistance is provided promptly to South West Water customers and, similarly, that Londoners can be assured that the power to provide contingent financial support is in place while we work with Thames Water and other stakeholders to plan for the financing and structuring of the tunnel.

[Mr Slaughter]

rose—

[Mrs Spelman]

I have already taken one intervention from the hon. Gentleman.

As the Bill contains just two simple spending powers to implement intentions that the Chancellor set out in the autumn statement, our intention is that the Speaker be able to certify it as a money Bill. I am, however, mindful of the limitations that would place on discussions in the other place and of the desire to debate the need for the Thames tunnel, in particular. The need for the proposed Thames tunnel will no doubt be discussed in detail if, as I expect, the waste water national policy statement is debated before the end of March. We will also shortly be laying a draft order before Parliament to amend section 14 of the Planning Act 2008. This section 14 order would enable a major sewer such as the Thames tunnel to be included as a nationally significant infrastructure project, and we look forward to hearing any concerns that hon. Members may have.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

My right hon. Friend will be aware that the Select Committee undertook some work on the waste water policy statement, largely addressing the whole issue of the Thames tunnel. I am mildly surprised that we did not use that opportunity, either during the Committee’s work or the Government’s response to it, to discuss this particular planning point.

[Mrs Spelman]

I thank my hon. Friend for that question. As I just said, there were 21 working days for the national waste water policy to be debated from the moment it was laid before Parliament on 9 February. There is still time and I am sure that hon. Members will take advantage of that.

Finally, those looking forward to seeing the other legislative reforms proposed in the White Paper should rest assured we are firmly committed to our programme of market reform for the water and sewerage sector.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Will the right hon. Lady give way?

[Mrs Spelman]

I am just summing up.

It is right, however, that the House should get the chance to scrutinise our proposals in detail and, to that end, we will publish a draft water Bill in the coming months. I commend this Bill to the House.

--- Later in debate ---

[Mary Creagh]

I am disappointed at the hon. Gentleman’s tone, because he is ignoring the fact that we commissioned the Walker report when we were in government. He is also ignoring the action we took, not least to prevent customers from being disconnected. I am sure that many of his constituents were affected in the early days of water privatisation when hundreds of thousands of customers were cut off—disconnected—from their water supply for non-payment of bills. We changed that. We changed the law and effectively instigated a right to water, which we think is a basic human right and is required for basic dignity and decency. I am sure that affected many people in the south-west.

The Bill is welcome because it lays down powers exercised by the Secretary of State to provide finance for the huge infrastructure investment that is needed to clean up the Thames, which has had very little investment since the great sewer drilled by Bazalgette 150 years ago. However, there are a number of questions that the Secretary of State must answer. First, why is the Bill so short? We are in a time of drought not seen in this country since 1976, so why is she focusing on the little picture rather than the big picture? Why was the water White Paper that was due in spring 2011 not published until December 2011? Her colleague the Minister with responsibility for water is now promising a draft water Bill this spring, so can she confirm that there will not be a full water Bill to take forward the other measures in Anna Walker’s report in the Queen’s Speech this May—yes or no?

[Mrs Spelman]

The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon), will be happy to answer this point in detail, but we do not need new measures to do some of the important things we need to do right now to tackle this drought. I mentioned the drought summit. As we saw last year, flexibility in terms of abstraction licences helped our farmers and we did not need hosepipe bans.

The extra time we took for the water White Paper improved it, putting resilience at its heart, and the climate change risk assessment vindicated that decision. I am sure that hon. Members would like the time to debate, through proper pre-legislative scrutiny, the measures set out in the water Bill. The Prime Minister gave an undertaking to the Chairman of the Select Committee on Environment, Food and Rural Affairs that a draft bill would come forward within months and I have repeated that commitment today.

[Mary Creagh]

I take it from that answer that there will not be a full water Bill in the Queen’s Speech this May. On the issue of abstraction, the proposals so far in the water White Paper talk about reforming the abstraction licence with an end date of 2027. The Secretary of State has had three drought summits—

--- Later in debate ---

[Mary Creagh]

I do not have those figures. Does the hon. Gentleman have them? Perhaps he will share them with the House in the debate.

We accept the argument that the south-west requires additional help to keep water affordable, but stopping there misses the point. Ofwat, the independent regulator, estimates that a fifth of households are already spending more than 3% of their income on their water bills, yet Ministers have failed to bring forward any plans to tackle high bills, apart from in the south-west, which has the highest bills in the country. There, around 200,000 people spend more than 3% of their disposable income on water bills, but in the Thames region there are a staggering 1 million people in the same predicament, so surely we should be working towards extending help through a national affordability solution. Without one, the effect of the Government’s £50-a-year payment in the south-west will soon be wiped out by price rises; prices will rise by more than inflation in each of the next three years. The assistance is welcome, but decoupled from wider reform, it will provide little lasting help on water affordability. I hope that answers the point raised by the hon. Member for St Ives (Andrew George).

We know from Ofwat that the groups most vulnerable to water poverty are single parents, pensioners and jobseekers. When we were in government, we introduced WaterSure, a national affordability scheme paid for by a cross-subsidy from water customers, and paid only to metered households with three or more children or to people with certain medical conditions, but the limitations of the scheme are apparent, because not everyone in water poverty has three or more children, and many pensioners and jobseekers will not be eligible for the scheme.

There is a further problem of penetration of WaterSure. Only a third of eligible households access the scheme, so there is big issue relating to the role of the water companies in educating their customers about WaterSure and the role of places such as jobcentres in making sure that people have access and understand their entitlement.

[Mrs Spelman]

When the hon. Lady’s party was in power, what did it plan to do about the fact that two thirds of people eligible under WaterSure were not taking it up? Will she acknowledge, therefore, that with the baton being passed to the present Government, who continue to run the WaterSure policy but with more determination to enable more eligible households to take it up, we have supported that with the introduction of guidance on social tariffs to all companies?

[Mary Creagh]

The right hon. Lady might want to answer her own question. We commissioned the Walker report, which said that Ofwat should do a six-monthly league table of water companies showing the best and worst performers. She has had 18 months. Has she implemented the recommendations of the Walker report? She has made her own guidance to water companies on social tariffs voluntary, not mandatory, and I fail to see how allowing them to choose whether to implement them will help customers.

Waste Water National Policy Statement

Caroline Spelman Excerpts

Thursday 9th February 2012 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

Having considered consultation responses and the report of the Select Committee on Environment, Food and Rural Affairs, I am today laying before Parliament the waste water national policy statement as an un-numbered Command Paper. At the same time, I am also laying, pursuant to section 5(9)(b) of the Planning Act 2008, the Government’s response to the Select Committee.

A written response to the consultation and an updated version of the impact assessment is also being published on the Department’s website at:

http://www.defra.gov.uk/environment/quality/water/sewage/.

National policy statements are critical to the new planning system, which will help developers bring forward waste water projects of national significance without facing unnecessary delays, while ensuring local people have an opportunity to have a say about how their communities develop, and that decisions are made in an accountable way by elected Ministers.

The waste water national policy statement sets out our need for waste water infrastructure to protect public health and ensure the health of our water environment with the consequent benefits for our water supply and biodiversity. Despite measures which will slow the growth in demand for new waste water infrastructure in England, for example the use of sustainable drainage systems, we will continue to need investment in new waste water infrastructure in order to modernise outdated infrastructure, meet future demands from a growing population and the effects of climate change, and to fulfil our EU obligations.

It has been agreed with the House that the same procedure as set out in the Localism Act, when it comes into effect, will be followed for national policy statements already in development. I intend to designate the national policy statement after a period of 21 sitting days has elapsed, or following a debate in the House of Commons if the House wishes one, and approves the national policy statement, within that period.

UN Conference on Sustainable Development

Caroline Spelman Excerpts

Thursday 9th February 2012 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

I would like to update the House on preparations for the UN Conference on Sustainable Development, Rio plus 20, which will be held in Rio de Janeiro, Brazil, on 20-22 June this year. It follows directly on from the G20 summit in Los Cabos.

Rio plus 20 has two major themes: the green economy in the context of sustainable development and poverty eradication, and the institutional framework for sustainable development.

The UN’s negotiating text, entitled “The Future We Want”, was published on 10 January. It is based on over 250 contributions submitted by member states and stakeholders. The UK welcomes this document as a starting point, but would like to see further prioritisation and a focus on tangible actions. The UK will call for:

A clear political declaration that we need green growth; that development, the environment, and the economy are inextricably linked; and that we need to consider all three together for our future prosperity.

Sustainable development goals (SDGs) to drive international action and increase co-operation in key sectors such as agriculture, water and energy. SDGs should not and cannot distract attention away from achieving the millennium development goals (MDGs) by 2015. The UK remains firmly committed to delivering these goals. We must work towards a clear position beyond 2015 which builds on the millennium development goals, in which sustainable development goals could play an important part. This is a priority for the UK and an area in which we will take the lead with international colleagues.

Action in key sectors for green growth: supporting international initiatives to drive sustainable growth in agriculture, sustainable energy access, water, and forestry.

Tangible outcomes that will put sustainability at the heart of decision making and support all countries in efforts to move to a more sustainable growth path. Governments can and must provide the framework for green growth, through reducing or removing environmentally harmful subsidies, getting price signals right, standards and voluntary approaches, valuing natural resources, developing indicators of green growth. We will also be calling for Governments to take steps to measure and account for their natural and social capital, in addition to GDP.

A clear focus on the private sector as drivers of green growth, through trade, innovation and investment. Rio should drive uptake of sustainable business practices—in particular transparent and coherent sustainability reporting, and resource efficiency.

Recommendations for institutional reform which draw on the Prime Minister’s global governance report for G20. Greater coherence, efficiency, and improved co-ordination are needed to deliver better outcomes at a lower cost. The UK supports a collective focus on interrelated issues and shared goals.

I will continue the dialogue with the private sector and civil society over the coming months, and will press for action on these priorities within the EU as well as internationally. I will keep Parliament updated on progress as the negotiations evolve.

Agriculture and Fisheries Council

Caroline Spelman Excerpts

Wednesday 8th February 2012 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

My right hon. Friend the Minister of State for Agriculture and Food (Jim Paice) represented the UK on agriculture matters at the Agricultural and Fisheries Council on Monday 23 January. Stewart Stevenson MSP and Alun Davies AM were also in attendance.

The meeting opened with a presentation of the Danish presidency’s priorities for the first half of 2012. Progress on CAP reform negotiations and political agreement on the common fisheries policy were the two main objectives, with simplification of food legislation, the technical alignment of legislation with the Lisbon treaty, and a focus on animal welfare also mentioned.

The main agenda item was a CAP reform discussion focusing on the Single Common Market Organisation (SCMO) proposal. The Commission stated that the proposal would refine existing market intervention measures, enabling the EU to react more effectively to agricultural crises, and introducing a new off-budget crisis reserve. The Commission called for Producer Organisations (PO) and Inter-Branch Organisations (IBO) to be allowed to benefit from clearer rules on competition law allowing them to plan effectively and adjust their production. The Commission also announced the creation of a high level group to examine the EU wine sector.

The UK acknowledged the requirement for a safety net but stressed the need to differentiate between market volatility and a genuine crisis; and disagreed that a crisis reserve should be off-budget. The UK welcomed the end of certain market measures such as the sugar quota, but restated the need for a balanced sugar market which allowed the EU sugar beet and cane refining industries to compete on a level playing field. Finally, the UK stated that the existing Producer Organisation model had been difficult to implement in member states and needed clarification.

Member states accepted the requirement for a safety net for farmers, but were split over the best ways to achieve this. The major wine producing member states regretted the proposed end to vine planting rights, but welcomed the formation of a high level group. A large group wanted to continue with sugar beet quotas. The Producer Organisations and Inter-Branch Organisations proposals were generally well-received, although many member states rejected the idea of compulsory recognition.

There were two items under any other business. The first saw a Commission presentation of its strategy for the protection and welfare of animals 2012-15. There was some reference to poor implementation of the ban on conventional cages for laying hens, and to the importance of maintaining the deadline for compliance with the sow stall ban in 2013.

The second any other business item was information from Holland on discovery of the Schmallenberg virus in Holland, Germany and Belgium. Holland called for a monitoring plan and EU funding to tackle the disease and for it be classified notifiable. The UK also reported discovery of four cases of Schmallenberg but stated that while EU-wide monitoring, research, and co-ordination was important there was not enough evidence to make the disease formally notifiable. The Commission stressed the need to act proportionately and avoid unnecessary disruptions to the market and trade.

Food Prices and Food Poverty

Caroline Spelman Excerpts

Monday 23rd January 2012 Commons Chamber

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

Let me start by welcoming the opportunity to debate this important matter. World food prices are volatile and the Government should do all they can to help families, but if we are to have a grown-up debate we need to start by acknowledging what the Government can and cannot do. Contrary to the rather Dickensian impression the hon. Lady seeks to convey, food price increases are not a direct result of the Government’s political composition, and a Government cannot be held responsible for what the hon. Member for Bridgend (Mrs Moon) cited: the abandonment of families by the main breadwinner, the misfortune of a house fire or domestic violence perpetrated in the home. Food prices are the product of many complicated and interrelated factors, many of which are globally driven.

In order to have a fully informed debate, I will turn first to the specific issue of the groceries code adjudicator, which this Government, unlike the previous one, are introducing, and put the current situation in context. No one underestimates the difficulties families face in balancing household budgets when bills are high. As a veteran of the weekly shop, I see at first hand the impact of food price rises, as I am sure many of us do. Let us set the record straight. Last summer food price inflation overtook general inflation, but by November the reverse was true. In the coalition Government’s first year in office, food prices increased by less than the average annual increase in Labour’s last five years. Between 2007 and 2008 food prices rose twice as fast as they did between 2010 and 2011. Although the hon. Member for Wakefield (Mary Creagh) has a new-found interest in food prices, which is to be welcomed, it comes a little late.

[Julie Hilling (Bolton West) (Lab)]

The right hon. Lady says that food prices are not rising as fast as they had been, but does she acknowledge that wages have not gone up over that period, which means that people are suffering huge food poverty?

[Mrs Spelman]

I am challenging the hon. Member for Wakefield to consider the fact that during her party’s 13 years in power, which saw steep rises in food prices, it introduced neither a groceries code adjudicator nor the other measures called for in the motion. Despite claiming today that the adjudicator would be some sort of panacea, the hon. Lady seems to feel that doing nothing about this for 13 years is a credible basis on which to criticise us for not having completed the process in just over 18 months.

[Philip Davies]

I must say that this is bizarre. My right hon. Friend says she is concerned about rising food prices, but she is agitating to bring in a groceries code adjudicator that, if it will have any influence at all, will only be able to put prices up further. The two things are completely contradictory.

[Mrs Spelman]

If we thought that the groceries code adjudicator would put prices up, there would not be the current cross-party support across the House for creating one.

The important point is that we need a degree of humility and candour about the Labour party’s record. As has been noted, Labour has shown extraordinary candour in the wording of its motion. We must be clear that the hon. Member for Wakefield is calling on the coalition Government to introduce the adjudicator early in the next Parliament. I am not sure whether she knows the outcome of the next election, but the motion clearly indicates that she has written off Labour’s prospects of forming the next Government—she is certainly not alone in that. It is always good to start a debate with an issue on which we can make common cause, but the good news for her is that we will not wait until the next Parliament to introduce the adjudicator.

[Gavin Shuker (Luton South) (Lab/Co-op)]

The Secretary of State is keen to tie down the timing of the introduction of the grocery code adjudicator, so when will she commit to do so?

[Mrs Spelman]

As I am sure Opposition Front Benchers are aware, the lead Department on the grocery code adjudicator, both for the Government and for the Opposition, is of course the Department for Business, Innovation and Skills, but we have been very clear as a Government that we are fully committed to introducing the adjudicator as soon as possible.

Free and fair competition is the key to a healthy market, and it is right that the adjudicator should make sure the market is working in the best long-term interests of consumers. In this Session, we published a draft Bill to allow pre-legislative scrutiny. It was a popular measure, welcomed on both sides of the House, and as the Leader of the House said on 15 December 2011:

“There will be a second Session of this Parliament, and the Groceries Code Adjudicator Bill is a strong candidate for consideration as part of it.”—[Official Report, 15 December 2011; Vol. 537, c. 937.]

So there is no delay, but it has to be done right.

It is important to bear it in mind that, overall, the Competition Commission found that retailers are providing a good deal for their customers, and they should not be prevented from securing the best deals and passing the benefits on to their customers, but, similarly, we are clear that they should be required to treat their suppliers lawfully and fairly.

During pre-legislative scrutiny, the Business, Innovation and Skills Committee suggested that third parties should be allowed to lodge complaints. Our position remains that it is more appropriate for complaints to be lodged directly or indirectly by suppliers, but we are open to considering further arguments on extending the range of those who can trigger an investigation. That is the benefit of pre-legislative scrutiny. We recognise that third parties, including trade associations, have a valuable role to play, so the adjudicator will be fully free to gather evidence from trade associations once an investigation has begun.

The draft Bill provides the adjudicator with the power to name and shame retailers that are in breach of the code, and we believe that, in a highly competitive market, retailers will not risk reputational damage from unacceptable behaviour towards suppliers. If negative publicity proves insufficient, however, the draft Bill contains a reserve power for the adjudicator to impose financial penalties, subject to an order made by the Business Secretary but without the need for primary legislation.

I hope the House agrees, therefore, that these measures represent significantly more progress than was made under the previous Government and should be generally welcomed.

[Andrew George]

It has been suggested, in particular during the intervention by the hon. Member for Shipley (Philip Davies), that the adjudicator would introduce inflation to the food market, but the Competition Commission itself, which is after all independent on the issue, made the situation quite clear, stating that

“if unchecked, these practices”—

the practices that the Secretary of State and others have described—

“would ultimately have a detrimental effect on consumers.”

It is quite clear that they would have a detrimental effect on prices for consumers.

[Mrs Spelman]

I thank my hon. Friend for his intervention. The Competition Commission clearly keeps the practices of retailers under scrutiny and sees a benefit in independent adjudication of fairness in the supply chain.

I shall turn to other points in the motion. The hon. Member for Wakefield espouses the virtues of the Healthy Start programme, which this Government have continued, and no one will argue with the role of food banks, which are an excellent example of the big society. They are not new, as Churches have been redistributing food in that way down the decades, and we are four-square behind organisations such as FareShare, which do excellent work in the field.

In making it easier for shoppers, this Government have wasted absolutely no time in working with the food industry to simplify food date labelling. Last autumn I made it clear that one date should appear on the label, so that there is no confusion between “use by”, “use before”, “display until” or “store until”. There should be one date: if the product is perishable, the label should state “use by”, for food safety; if it is not, the label should state “best before”. In that way, we can certainly help people to reduce the amount of food that goes to waste.

[Kate Green]

I am shocked to hear the Secretary of State say that we should welcome food banks. It is a social policy failure that families are reliant on food handouts because they do not have enough money to afford a healthy diet for their children.

[Mrs Spelman]

I gather that the hon. Lady would like them banned.

[Kate Green]

indicated dissent.

[Mrs Spelman]

Well, she cannot have it both ways.

[Kate Green]

Will the Minister give way?

[Mrs Spelman]

No.

Let us get back to some facts. Retail food price inflation reached 6.9% in June last year and currently stands at 3.8%. In real terms, food prices have stayed at about the same level since the start of 2009, notwithstanding the fact that food price inflation has fallen below the general rate of inflation. I accept that we need to help those on the lowest incomes, who are spending more of their budgets on food.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does the Secretary of State agree that the major contributory factor to food price inflation is energy and fuel price inflation? They are indelibly linked.

[Mrs Spelman]

Shortly, my hon. Friend will hear me expand correctly on the analysis of what is driving food price inflation.

It is important to remember that in 2010 the average family spent 11.5% of its household budget on food. The figure is greater for low income families, at 15.8%, but it is coming down; the 2010 figures are 1% lower than two years previously. That is a very important fact—the trend is that household expenditure on food in the lowest income families is coming down.

[Luciana Berger]

I do not know whether the Secretary of State has seen the figures released by the OECD last week. They showed that in the UK food prices rose by 4% in the last year, which is 0.7% above the EU average.

[Mrs Spelman]

The hon. Lady needs to understand the contributory factors. The depreciation of sterling makes imports of food in other currencies stronger than ours more expensive. It is important to read the figures in the context of exchange rates and the other factors that drive up inflation.

The Government are, of course, actively finding ways to help mitigate the rises. But the Government cannot do it all, and they should not pretend that they can. Since the removal of production linked support in 2005, crops and livestock are traded on a global market. It is those markets that dictate food prices. As has been pointed out, the key drivers of domestic retail food price inflation include world agricultural commodity prices.

I hate to have to tell the hon. Member for Wakefield, but if she is to have this brief she needs to learn that the wheat price has not been stable; it has fluctuated in recent years from £60 a tonne to more than £200 a tonne. There are also oil prices and exchange rates. In 2008, although the price of wheat fell in dollar terms, it increased in sterling terms because of the relative weakness of sterling to the dollar. To understand the causes of food price inflation, one has to analyse correctly the underlying drivers.

World commodity prices are the key driver and we are working hard internationally to ensure the better functioning of commodity prices at the global level. That, in turn, will affect food prices at home. The depreciation of sterling has made dollar-denominated commodities more expensive. Furthermore, global weather extremes have caused shortages that drive prices up.

[Nia Griffith (Llanelli) (Lab)]

I assure the Secretary of State that the Opposition fully understand which things Governments can intervene on and which they cannot. What is she doing to help the poorest families in the country to make sure that they get enough food and do not have to rely on food banks? How many food banks would she regard as a measure of success, and what is she aiming to do by the end of her stay in office?

[Mrs Spelman]

The hon. Lady clearly was not listening to what I said about the continuation of the Healthy Start campaign, for example. Of course, in any big society, there is no finite amount of contribution that each of us might make to the more vulnerable; there is no need to put a limit on it.

[Kwasi Kwarteng (Spelthorne) (Con)]

Will my right hon. Friend comment on the moves that the Government are making, such as freezing council tax and cutting fuel duty? That has made general inflation a much more manageable phenomenon for ordinary families.

[Madam Deputy Speaker (Dawn Primarolo)]

Not at this precise point; the right hon. Lady is speaking to the motion.

[Mrs Spelman]

That is a shame, Madam Deputy Speaker, because there is a long list of things relevant to household budgets; there was a wider definition of that earlier. Freezing council tax is but one example of what frees up the budget to buy more food.

Last year, the Government’s Foresight report on the future of food and farming concluded that Governments across the world must take action now to ensure that a rising global population can be fed. It is a chilling fact that in only 13 years there will be 1 billion more mouths to feed on this planet. Increasing demand for water, land and energy means that food security is one of the world’s greatest challenges. The report identified five challenges for all nations to act on: balancing future demand and supply; ensuring that there is adequate food price stability and protecting the most vulnerable from volatility; achieving global access to food and ending hunger; managing the contribution of the food system to mitigating climate change; and maintaining biodiversity in our ecosystems. To take on those challenges, we need international reform. To address global food security, we need an increase in agricultural productivity, which means a move away from subsidy. To address the risk of climate instability disrupting production patterns, we must have open world trading systems.

In June last year, G20 Agriculture Ministers met and agreed to the creation of an agricultural market information system, which aims to stabilise food price volatility through better transparency in the marketplace. In November, I attended the climate change conference and helped the South African Agriculture Minister to get agriculture included in the work stream for the next climate change convention. We are now preparing for Rio plus 20, where we will push for international policies to help the most vulnerable in our society. We will lobby for the sustainable intensification of agriculture, climate-smart agriculture and the reduction of post-harvest losses. The Afghan Minister whom I met in Berlin this weekend at green week said that the reduction of harvest losses would make one of the greatest contributions to combating famine.

The challenges present an opportunity for the UK, and we need to be the first out of the blocks and embrace it. British food producers must make the most of international markets. That is why I have announced that I will publish an action plan at the end of the month to help export the best of British food and drink across the world. It is through global trade that the UK can secure its future food supply and help keep food prices down. We already contribute to global food supply. We provide 2% of global wheat exports, 4% of global barley exports and 1% of global cereal exports. That demonstrates that the UK has a major role in food production. By expanding production and exports, we can contribute to the overall economic recovery.

The food and farming industry is a high performer with great potential. The food chain contributes £88 billion per annum to the economy, which is 7% of GDP. It is responsible for 3.7 million jobs. The Government are acting across the food chain to stimulate growth, facilitate international trade and drive fair competition, because a thriving and competitive economy, where our products are freely traded on an international market, will deliver resilient, stable and affordable food supplies to our consumers.

The Government are working with industry and environmental partners to see how we can reconcile our goals of improving environmental protection and increasing food production. I am grateful to the hon. Member for Wakefield for welcoming the green food project. The Government are spending £400 million on food and farming research, which addresses productivity, environmental performance and resilience along the food chain.

Nobody is under any illusion about the pressures that high food prices put on all our constituents. However, it would be wrong to pretend that there is a “silver bullet” solution when there is not.

[Julie Hilling]

I have not heard in the Secretary of State’s contribution any mention of what she will do for the most vulnerable in this country, who are dependent on a hugely increased number of food banks. What will she do to feed those families who cannot feed themselves?

--- Later in debate ---

[Mrs Spelman]

I am sure that the hon. Lady would accept that the responsibility for helping the most vulnerable people in our society to have more disposable income to provide food for their families goes beyond my Department. She must take account of other things such as our freezing council tax, cutting fuel duty, cutting income tax, taking 1.1 million low-paid people out of tax, increasing child tax credit, taking action on energy prices and helping with the cost of rail travel.

The groceries code adjudicator will not be a panacea in the face of rising food prices. The adjudicator has a role to play in delivering a robust check on fairness between supplier and retailer; that is why we are introducing it. However, limiting food price inflation rests on multiple factors, from energy to exchange rates, and not least the core issue of supply and demand. The Government are not only alert to those factors but actively finding opportunities to influence them. We are working internationally to ensure that a growing population can be fed, we are using the challenges of food production to kick-start growth and competitiveness here in the UK, and through the green food project we are addressing the tensions inherent in growing more food at less cost to the environment.

The steps we are taking will produce the market conditions required to deliver good quality, affordable food for households throughout the UK. This debate is important because it is about the household budget and the cost of living. The Government have not sat idly by. We are directly helping in all kinds of ways—the freezing of council tax, the cutting of fuel duty, and so on. Those are all measures that Labour refused to take when it was in power, despite running up the biggest peacetime deficit in our country’s history. This is a Government who are on the side of hard-pressed families, this is a Department that is on the side of British farmers and food producers, and this is an issue on which Labour has no credibility and no alternative. I urge the House to reject the motion.

--- Later in debate ---

[Miss McIntosh]

The House will draw its own conclusions about my hon. Friend’s self-advertising.

I understand that the powers of the Competition Commission are based on the powers of the Commission in Brussels. The EU directorate general for competition has the power to swoop when it believes an investigation should take place. I urge my right hon. Friend the Secretary of State to make the same plea to the Business, Innovation and Skills Secretary to adopt those two recommendations—and, indeed, all the Committee’s recommendations.

The Secretary of State for Environment, Food and Rural Affairs will be aware of the Committee’s work on food security. I hope she will remove any inconsistencies between trying to supply a secure strand of food and sustainable food production. There is an inconsistency at the heart of the Government on that. She will be involved in discussions on common agricultural reform in Brussels. Greening the common agricultural policy could take productive land out of production. It could also be hugely expensive and involve the introduction of more complex regulations, which we should be aiming to simplify.

[Mrs Spelman]

My hon. Friend will know that I acknowledged that problem when I gave evidence to her Committee last week, and that we will try to ameliorate the Commission’s proposals in that regard.

[Miss McIntosh]

I am most grateful for my right hon. Friend’s clarification.

In conclusion, we should say, “Keep it simple.” With all the regulations coming forward, whether to do with the adjudicator or not, the powers should be clear and allow individual growers, under a cloak of anonymity, to raise such issues, either directly or through a third party. I welcome this debate, although I regret that many of the issues that I have raised are not covered by the motion. However, we can have a positive debate today and see an early completion of the adjudicator code, with an early introduction of the adjudicator in the next Session.

--- Later in debate ---

[Huw Irranca-Davies (Ogmore) (Lab)]

This has been a very good and wide-ranging debate, and all in all I think that we have had 12 speakers, if my maths is good—although maths is not my strong point.

The hon. Member for Thirsk and Malton (Miss McIntosh) spoke eloquently on behalf of farmers, and pressed the Government on farmers’ genuine concerns about currency and exchange rates and rising costs. She spoke also of, in her phrase, “the climate of fear” in the supply chain, and we recognise that. She pushed the Government, as she has in her role as Chair of the excellent Environment, Food and Rural Affairs Committee, to give real teeth and power to the adjudicator. She also almost referred to “good” and “bad” retailers, so I look forward to her contribution to the Labour left review or to Progress magazine.

The hon. Member for South Thanet (Laura Sandys) also spoke well, and said that the era of cheap food is coming to an end. Perhaps it is, but if so I am sure we all agree that we need the fairest prices for consumers and fairness throughout the food chain. She mentioned her involvement with, if this is correct, “Tasty but ugly like you.” I do not mean you, Mr Deputy Speaker, of course. I hesitate to lay the words “tasty” or “ugly” on you—[Interruption.] No, I will stop there.

The hon. Member for Congleton (Fiona Bruce), who represents a lovely part of the world which I know well, made a very good contribution that could have been called, “The Plot Thickens”. She talked about the importance of grow your own, and I too stress the role of allotments—given that the chair of the National Society of Allotment and Leisure Gardeners, a very good gardener, lives in my constituency—and the need to protect and enhance them. The hon. Lady talked of giant leeks, which we see also at Wales rugby matches, and she advocated growing produce in one’s garden or in one’s neighbour’s garden—although in the latter case it is always best to ask permission.

The hon. Member for Bury North (Mr Nuttall) said that there was no mention of “food poverty” in the motion. There is: it is in the title. The hon. Member for Tiverton and Honiton (Neil Parish) recognised the real problem of food poverty, on which I congratulate him, and he took issue with his hon. Friend the Member for Shipley (Philip Davies) about the nature and purpose of the adjudicator, on which we agree. There was also a thoughtful contribution from the hon. Member for Totnes (Dr Wollaston).

The hon. Member for St Ives (Andrew George) made a good contribution. He welcomed much of our motion and many of our remarks. I can clarify that we want the adjudicator in the next parliamentary Session. Will he support us? He should not let a drafting error get in the way of our emerging coalition on this matter.

My hon. Friend the Member for Stoke-on-Trent South (Robert Flello) spoke extremely well for his constituents, describing a “heat or eat” scenario—or, worse, neither heat nor eat. He went into detail on food banks and mentioned clearly that they did not exist in great numbers under Labour because there was not the need for them on the scale at which they are now emerging.

My hon. Friend the Member for North West Durham (Pat Glass) spoke powerfully for farmers in her area and the early introduction of a powerful groceries code adjudicator in the next parliamentary Session. We agree. “Fairness across the food chain”—her phrase—is a good rallying cry. My hon. Friend the Member for Llanelli (Nia Griffith) paid tribute to the work of our hon. Friend the Member for Ynys Môn (Albert Owen) on the groceries code adjudicator and called for an urgent introduction of an adjudicator with clout. She said, stirringly, that it is a disgrace that anyone should have to rely on charity to feed their family.

My hon. Friend the Member for Bristol East (Kerry McCarthy) focused expertly on food poverty, the growth in the number of food banks in Bristol and the work being done to mitigate the problem of food poverty. My hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) described the national scandal of rising food poverty, coupled with the rise in broad poverty issues throughout the UK. She gave direct evidence of the human tragedy for her own constituents, not least because of the late payment of benefits, something echoed by my hon. Friend the Member for Scunthorpe (Nic Dakin).

The Secretary of State talked widely about global issues, but did not focus on the particulars of food poverty and food banks. Labour Members picked up on astonishing complacency. She described food banks as a triumph for the big society, rather than a tragedy caused by the Government’s social and economic policy. How many more food banks do we need before we can proclaim the big society a resounding success?

[Mrs Spelman]

When the hon. Gentleman checks Hansard tomorrow, he will see that I did not use the word “triumph”. Opposition Members have failed to observe that, for many decades, many institutions in this country have helped the poor and needy. If he has never been to a harvest festival and understood that churches collect food to distribute among those in their community who really need it, he is not alert to how much that is part of British culture.

[Huw Irranca-Davies]

Charitable effort has indeed always been part of this country, before the phrase “big society” was invented, but never with the proliferation that we currently see. It is a tragedy.

Let me relate a direct story about one not unusual family of four in England today. One parent is out of work and the other is in a low-paid job. Before Christmas, they found themselves behind on their mortgage, with their council tax debt racking up and the gas and electricity meters running out of money. They receive working tax credit and child tax credit, both of which will soon be cut by the Government. Their home is increasingly cold and dark and the only things in their cupboards are food parcels from the local food bank. The right hon. Lady shakes her head, but they buy what fresh food they can when they can, but without the support and kindness of local people, they would simply go hungry. We would love that to be fiction, but such are now the facts of life for too many families.

Into that harsh reality stumbles a throwback to the 1980s—a former Conservative Minister who was then the hon. Member for South Derbyshire. When confronted recently with that dire social and economic regression, she boldly answered:

“Are you telling me people in this country are going hungry? Seriously? Seriously?”

Yes, seriously—former Conservative Ministers might not want to believe it, but it is a searing indictment of the Government that more and more people across England, Wales, Scotland and Northern Ireland find themselves relying on food banks, one of which was opening every week last year. Those people depend on the generosity of others to get by.

Last year, 60,000 people received help from a food bank, a figure that the Trussell Trust predicts will rise to 130,000 in the next year. For all those impoverished families who now need a voice in the Chamber, the words and sentiment of the former Member for Ebbw Vale echo down the years: this is their truth, our truth—tell me yours. What is true across the UK is true in my constituency and neighbouring constituencies. From Llanharan to Gilfach Goch, and Maesteg to Pontycymmer, and all points between, food banks proliferate.

We should pay tribute to the many volunteers and organisations involved, such as the Bridgend food bank and the Pontyclun food bank, but the issue is a terrible indictment of the economic misery inflicted on families under this failing coalition Government. I challenge the Minister and the Government to dispute that stark reality. The Government’s failing policies and inaction on the economy mean that families are finding it hard to make ends meet and struggling to cope with rising living costs, higher energy, housing and food bills, and the constant fear that they could lose their jobs—if they have them—at any time.

For too many, eating is losing out to heating and housing costs. Charities warn that having a job is now no protection; an estimated 10% of food bank recipients are middle earners whose salaries have been cut or frozen or who have recently lost their jobs. Food prices rose by more than 4% last year. Lower-income families are eating less fresh fruit and vegetables. They spend more than 15% of their income on food. In real terms, it comes down to a couple with two young children spending an extra £233 on their annual food bill.

When surveyed by Which? in the last year, more than half of consumers said that increasing prices made it difficult to eat healthily. Nearly 90% genuinely fear the increasing cost of food. Those are startling figures. However, when people need help, the Government seem torn between prevarication and paralysis when it comes to taking action that will go some way towards easing the pressure on people’s wallets—not least by assisting farmers and manufacturers of the food we eat with the retail and financial challenges that they face.

When in government, Labour took action after the hike in food prices in 2008 to address that challenge and to produce more food sustainably. In 2010, we published the first Government food strategy for 60 years and our priority was a sustainable, affordable competitive food sector. We gained cross-party support for the supermarket ombudsman—to ensure a fair deal for farmers and food producers, who still need a fair deal from major retailers—and for the implementation of the groceries supply code of practice in February 2010.

Yes, there was more to be done, but the creation of an ombudsman—the groceries adjudicator—to enforce and monitor the code of practice was a recommendation of the Competition Commission and is supported by the Environment, Food and Rural Affairs and Business, Innovation and Skills Committees. It would do a great deal for farmers, food manufacturers and the public. It was not just us asking for it.

Environment Council

Caroline Spelman Excerpts

Friday 20th January 2012 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

I represented the UK at the Environment Council in Brussels on 19 December. Stewart Stevenson, Scottish Minister for Environment and Climate Change, also joined the delegation.

Following lengthy debate, the Council adopted conclusions on implementation of the EU biodiversity strategy to 2020. I indicated the need for speedy implementation, and highlighted the UK’s own national biodiversity strategy. I also emphasised the importance of fully implementing the resource mobilisation strategy. In relation to CAP, I reiterated our view that the best way to help the environment was through targeted measures under pillar 2: environment outcomes are most cost-effectively delivered by longer-term, targeted interventions.

Ministers also adopted conclusions on the resource efficiency road map. The Commission underlined the importance of this agenda for the future of the European economy. I brought attention to significant savings we have identified UK businesses could make via increased resource efficiency, and stressed the importance of this agenda in making the transition to a “green” economy, not just in the EU, but also globally in the context of Rio plus 20. I also highlighted that businesses were leading the drive towards more efficient resource use and it was important to draw on their expertise.

The presidency informed the Council of progress made on: the proposal for a regulation of the European Parliament and of the Council on control of major accident hazards involving dangerous substances (“Seveso III” directive); the proposal for a regulation of the European Parliament and of the Council concerning the export and import of hazardous chemicals (PIC); and the proposal for a regulation of the European Parliament and of the Council amending Directive 1999/32/EC as regards the sulphur content of marine fuels. On the latter, I supported the elements of the Commission’s proposal that aligned it with the relevant 2008 International Maritime Organisation agreement, as it would provide much-needed certainty for industry and would deliver significant environmental benefits. However, I also emphasised that the economic impact on the industry must be minimised.

After lunch, over which Ministers continued to discuss the importance of resource efficiency, there was an exchange of views on the result of the 17th conference of the parties (COP 17) to the United Nations framework convention on climate change (UNFCCC) in Durban. Most member states agreed that the result was an important step forward, and that the EU’s speaking with one voice, with a clear position, and in coalition with the least developed countries and small island states, were key factors that contributed to the success of the conference, and elements which should be built upon in future. Many member states noted, however, that there are still significant challenges to be overcome in the coming months, such as defining the EU’s emission reduction target, the length of the second commitment period of the Kyoto protocol, and how to tackle the issue of surplus assigned amount units. I made the case that further progress depended on the EU’s leadership, and to this end I made the case that an EU emissions reduction target of 30% (compared to 1990 levels) was the right place to be in 2020.

Agriculture and Fisheries Council

Caroline Spelman Excerpts

Friday 20th January 2012 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

The next Agriculture and Fisheries Council is on Monday 23 January in Brussels. My right hon. Friend the Minister of State, Department for Environment, Food and Rural Affairs, the Minister with responsibility for Agriculture and Food will represent the UK. Stewart Stevenson MSP and Alun Davies AM will also attend.

In the morning, following a presentation of the Danish presidency’s programme for the next six months, the Commission will present their animal welfare strategy, published this week.

In the afternoon there will be a discussion on the single common market organisation (CMC) Regulation as part of the CAP reform package. This item will cover market intervention measures, role of producers’ organisations, crisis management and competition policy.

At lunch the Commission (José Manuel Barroso—president of the Commission and Dacian Ciolos—Agriculture Commissioner) will be hosting an event launching celebrations of the 50th anniversary of the CAP.

Bovine TB

Caroline Spelman Excerpts

Thursday 19th January 2012 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

In December I announced that the Government would allow controlled culling of badgers, carried out by groups of farmers and landowners, as part of a science-led and carefully managed policy of badger control to tackle TB in cattle. The policy would be piloted in two areas to test our assumptions about the effectiveness, humaneness and safety of controlled shooting.

I also announced that to select the pilot areas, I was inviting the farming industry to come forward with a shortlist of areas from which DEFRA would prioritise two to submit full applications for licences to control badgers.

I can now confirm that I have asked groups in two carefully selected areas, West Gloucestershire and West Somerset, to submit applications to Natural England.

Natural England will assess the applications against the strict licensing criteria and decide whether or not to grant licences. If either of the two areas fail to meet the licensing requirements, another area from the industry’s shortlist will be invited to apply.

I understand that residents in these areas may have views on the proposal to cull badgers and, as part of its assessment, Natural England will provide the public with an opportunity to comment on the applications.

However, those undertaking licensed activity, and those living and working within the application area, must be protected. Therefore, we do not propose to make available any further information at this stage about the exact location of the pilot areas.

We expect Natural England’s decision on whether or not to grant licences to these two areas to be made in the spring.

An independent panel of experts will oversee the monitoring and evaluation of the pilot areas and report back to Government.

Following conclusion of the first annual six-week cull in the pilot areas, from what we observe and what we learn, and taking into account the evaluation by the independent panel of experts, we will then take a decision on whether further licences should be granted.

Professor Christopher Wathes has been appointed chair of the independent panel of experts. Professor Wathes is a professor of animal welfare at the Royal Veterinary College and the current chair of the Farm Animal Welfare Committee. Other members of the panel will be appointed shortly.

I know that there is great strength of feeling on badger culling, but I also know that we need to take action now before the situation deteriorates even further. We need to tackle all transmission routes of TB using all the available tools.

Oral Answers to Questions

Caroline Spelman Excerpts

Thursday 19th January 2012 Commons Chamber

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

Innovation is essential to enhancing the competitiveness and resilience of UK agriculture, and we welcome the emphasis in the new common agricultural policy reform proposals on stimulating innovation. In March, in partnership with the Technology Strategy Board we are holding an innovation for growth summit with the agri-food sector. The summit will raise awareness of the potential for growth, and it includes a competition with £500,000 in prizes for small and medium-sized enterprises to develop their innovative ideas. As we speak, the invitations are going out.

[George Freeman]

I thank the Secretary of State for that answer. Does she agree that, as we as a nation look for ways to develop a sustainable recovery and to support sustainable development throughout the world, British agriculture, science and technology have a key role to play as exports, not least through centres such as the Norwich research park in my own county of Norfolk? Does she also agree that we need somehow to create a web that links up our centres of excellence, currently fragmented throughout the UK, to create a portal for global industry to interact with our science?

[Mrs Spelman]

I completely agree, and I esteem highly the research capacity in my hon. Friend’s constituency. The Government’s investment of £400 million per annum is co-ordinated throughout the Government, under the UK cross-Government food research and innovation strategy, which is published by the Government Office for Science. The cross-Government and research councils’ programme on global food security will also be a key vehicle for driving that agenda forward.

[Ian Paisley (North Antrim) (DUP)]

Does the Secretary of State agree that one of the best ways to enhance competitiveness is to encourage the export of our product beyond the borders of the European Community? Will she outline to the House the Department’s policies, practices and strategy to encourage the export of our food product to Asia, Russia and China?

[Mrs Spelman]

When we took office, we made it a priority from the outset to encourage the food and farming industry to produce more food sustainably and to think in terms of opportunities in emerging markets. Later this month, we will publish in an export action plan the results of our work with the agri-food industry in the intervening months, but there is absolutely no doubt that the emerging markets of Brazil, China, India and Russia, many of which Ministers have now visited, offer our food and drink industry the huge potential to grow its business.

[Roger Williams (Brecon and Radnorshire) (LD)]

The UK is already a successful exporter of meat and meat products, and that is a fantastic way of increasing employment in farming and food processing. I have recently returned from Kazakhstan, where there is a huge and unmet demand for meat and meat products. What is DEFRA doing to ensure that all potential exporters are supported, and that we promote the quality of British meat throughout the world?

[Mrs Spelman]

As I said in my previous answer, we have made that issue a priority since the very beginning. The important point is that the “Made in Britain” label on our food and drink sends to consumers throughout the world a very strong signal of high-quality food produced to very high standards of animal welfare, which our consumers expect and we promote, and of food safety, as the systems that we have built are very strong. Indeed, we should consider exporting not just our food but our systems to emerging economies.

[Mel Stride (Central Devon) (Con)]

3. What progress her Department has made on payments to farmers under the single farm payment scheme.

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[Annette Brooke (Mid Dorset and North Poole) (LD)]

4. What steps she is taking to tackle littering and fly-tipping.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

Changing behaviour is the key on such environmental issues. That is why the Government support the national fly-tipping prevention group and initiatives such as Keep Britain Tidy’s “Love Where You Live” campaign, which I launched with Kirstie Allsopp last autumn. We are cracking down on fly-tippers by introducing powers to seize the vehicles of suspected offenders and are working with the court authorities on increased sentencing.

[Annette Brooke]

I thank the Secretary of State for her answer. I congratulate all those involved in community litter picks, including those at Canford Heath in my constituency. Litter alongside the busy roads that link our communities is a blot on the landscape. What more will she do to empower local councils to take effective action against people in vehicles who are responsible for such littering?

[Mrs Spelman]

I freely acknowledge that that is a problem. When I jog around the lanes where I live in the countryside, it appals me to see what has been dropped casually out of car windows. It is systematically cleared by the council, but within a very short period it is back. This is about changing behaviour. We have to start in schools by educating children and taking them with us on litter picks, because it then dawns on them what a nuisance this is. In addition, an interesting opportunity is presented by a private Bill that is going through Parliament, which will enable London borough councils to tackle the problem of littering from vehicles by making it a civil offence. We should look at the efficacy of that measure to see what wider lessons we can learn.

[Yvonne Fovargue (Makerfield) (Lab)]

The Secretary of State has mentioned her support for Keep Britain Tidy, yet her Department has cut its grant to that organisation, causing it to lose 50% of its staff. What impact does she believe that will have on littering campaigns?

[Mrs Spelman]

Such questions from the Opposition always skirt the reality that we are dealing with a deficit we inherited from the previous Government. As shadow Ministers have said, they would have to make cuts too. This is not easy. As I said at the outset, I applaud Keep Britain Tidy’s initiatives. The point is that we need to tackle this together. This is a classic area where the big society can make a difference. I have put my money where my mouth is by helping to launch the “Love Where You Live” campaign. I suggest to hon. Members that that is a campaign we can all get involved in.

[Andrew Stephenson (Pendle) (Con)]

5. What assessment she has made of the benefits to rural areas of rural tourism; and what support she is providing to rural communities to help them secure such benefits.

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[Mr Tom Harris (Glasgow South) (Lab)]

7. What steps she is taking to promote jobs and growth in the food production and environmental industries.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

In the rural strand of the growth review that we published alongside the autumn statement, we announced an export action plan which, as I indicated earlier, will be out later this month, and an innovation summit to support the agri-food industry. We also announced a new £15 million loan fund for community renewables, a £15 million fund for rural growth networks and support for mid-sized businesses to access £6 billion a year of savings available from resource efficiency.

[Mr Harris]

I think the whole House has a perfect right to know what I had for breakfast this morning. I started with sausages, bacon and egg—only one, of course, because I am on a health kick. In tucking in, I was reassured by the fact that 90% of all the food purchased by the House is sourced in the United Kingdom, encouraging British growth and British jobs. Will the Secretary of State tell the House not what she had for breakfast—too much information already—but what proportion of food purchased by her own Department is sourced in the United Kingdom?

[Mrs Spelman]

I am sure the hon. Gentleman understands that World Trade Organisation rules mean that we can require purchasing to British standards in Government procurement, but we cannot require produce to be British. We adhere to those rules, and we actively promote Government buying standards involving all Departments sourcing food that is produced to British standards in order to promote those standards. In my own Department, the figure is 18%.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Many people are employed in rural areas, particularly the uplands, in livestock production. Does the Secretary of State share my concern about the conflicting messages from her Department and the Department of Health about the eating of meat, which could potentially have very damaging consequences for jobs and growth in rural areas?

[Mrs Spelman]

Clearly nutrition is a lead for the Department of Health, but it is quite clear that meat forms part of a balanced diet. I am very proud of the fact that producers in this country produce meat to the highest standards of animal welfare, food and hygiene anywhere in the world. As we have just discussed, we actively promote the consumption of food that is produced to those very high standards within Government and among the wider public.

[Mary Creagh (Wakefield) (Lab)]

Labour believes that public procurement should be reformed to play its part in our economic recovery and to support jobs, skills and apprenticeships here in the UK. The Government spend £2 billion a year on food and are well placed to support British farmers and food businesses by buying British. I heard what the Secretary of State said and was unclear about the percentage that is sourced from UK producers, but her latest figures show that the Department bought less than a third of its food from UK producers in 2011. Why is that, and what does she intend to do about it?

[Mrs Spelman]

As we have discussed, the situation has not changed since the hon. Lady’s party was in office. The difference is that the Government have placed a requirement on all Departments to procure food to British standards. As a shadow Secretary of State, she cannot encourage the Government of the day to breach WTO rules by calling for British products. That is the distinction. We want to encourage the industry to produce more food to the high standards that we require and to encourage Government Departments and the wider public to consume food that is produced to that very high standard.

[Mary Creagh]

The Secretary of State is confused. DEFRA Ministers are simply failing to deliver jobs and growth in the UK food industry, which is the country’s largest manufacturing sector. We have seen how unfair competition from abroad for egg producers has been allowed—DEFRA is supine. My hon. Friend the Member for Ogmore (Huw Irranca-Davies), the shadow food Minister, has asked many questions, yet No. 10 has not revealed how much of its food is sourced from the UK. There is confusion across Government: some Departments reply on what British produce they bought, and some reply on food that is sourced to UK standards. Will she have a word and ensure that the next time guests sit down for dinner with the Prime Minister, the food they enjoy is 100% UK-sourced and that it supports jobs in this country?

[Mrs Spelman]

There is no confusion at all here. Government buying standards are mandatory across all Departments. They require food to be procured to British standards. That is compatible not only with WTO rules but with the rules that cover the operation of the EU internal market—the very basic framework that any Secretary of State or shadow Secretary of State should understand.

The hon. Lady also completely overlooks the importance of our drive on exports. I remind her that in the last year alone, there has been an 11.4% increase in food and drink exports from this country to the wider world.

[Mr Speaker]

Order. I am extremely grateful to the Secretary of State, but questions and answers are, frankly, too long. I am sure we will have a short—that is, single sentence—question from the hon. Member for St Ives (Andrew George).

[Andrew George (St Ives) (LD)]

I shall do my best, Mr Speaker.

If British farmers are to compete on the world market, support systems must not simply allow British farmers to avoid creating the ranch-and-prairie environmental deserts that we clearly do not want. Does my right hon. Friend the Secretary of State believe that the common agricultural policy reforms are currently moving things in the right direction?

[Mrs Spelman]

Within the CAP proposals, there is an endeavour to balance the need to promote animal welfare and protection of the environment in parallel with producing food sustainably, but the important thing in concluding trade deals with non-EU countries—2012 ought to the be the year of UK trade deals as emerging markets offer great potential to our industry—is to have the higher standards to which British food is produced recognised in the wider world and at global level.

[Rehman Chishti (Gillingham and Rainham) (Con)]

8. What steps her Department has taken to reduce the volume of waste going to landfill.

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[Gavin Barwell (Croydon Central) (Con)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

My Department takes responsibility for safeguarding the environment, supporting farmers and strengthening the green economy. Essential to each of those is water supply. In that context, my Ministers and I will focus extensively on water resources over the coming year, seeking to avoid unnecessary supply restrictions. Last month, I issued a drought order to South East Water to protect supplies to customers in Sussex. Next month, we shall hold the next in a series of drought summits, and thereafter the Environment Agency will update the drought prospects report. With luck, holding a drought summit tends to bring on the rain. I saw that it rained this morning; we need a lot more of that.

[Gavin Barwell]

Three months ago, my local authority, Croydon, introduced a food waste recycling service, which is on course to divert nearly 12,000 tonnes of household waste from landfill. Will the Secretary of State congratulate Croydon on its work, and will she tell us what the Government can do further to develop the market for other recyclables?

[Mrs Spelman]

I congratulate Croydon council on that new development. We certainly see the opportunity for local authorities up and down the land to introduce a waste food collection scheme that feeds into anaerobic digestion and, in turn, produces a renewable source of energy. Croydon council predicts that it will help the borough to increase its recycling rate from 32% to 46%, which, therefore, has the full support of the Government.

[Chris Evans (Islwyn) (Lab/Co-op)]

T2. In November 2010, I was one of the 5,000 people attacked by a dog since the consultation on dangerous dogs closed in June 2010. For fear of being called to order by you, Mr Speaker, I will not raise my middle finger to the Minister to show him the 1-inch scar left following the attack, but will he bring forward the proposals on dangerous dogs before the February recess?

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[Kate Green (Stretford and Urmston) (Lab)]

T5. Following the Government’s admission that the UK remains in breach of EU pollution legislation, can the Secretary of State tell campaigners such as the Breathe Clean Air Group in my constituency what steps she is taking to address concerns about the impact of biomass emissions on air quality?

[Mrs Spelman]

We have worked hard with the Commission on air quality. We have brought a number of suggestions to the Commission about how we might help to improve air quality, particularly in urban areas, working closely with the Mayor of London, and also with other cities and their local authorities. The question of biomass emissions is part of that, but with technology advancing, it is possible to have a closed loop fermentation process, thereby minimising the impact of any emissions into the atmosphere.

[Rehman Chishti (Gillingham and Rainham) (Con)]

T4. What is DEFRA doing to ensure that the British horticultural industry is not disadvantaged by the Rural Payments Agency suspending 17 producer organisations from the European fresh fruit and vegetable scheme?

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[Mrs Spelman]

I did indeed come straight back from a ministerial preparatory conference in Delhi, step off the plane and brief two large groups—the business community and the NGO community—at round-tables, the reason being that the Brazilian hosts intend in the days preceding the ministerial segment for business and for civil society to have a specific convention on sustainable development 20 years on from the original summit. We are seeing some early proposals from the Colombians on sustainable goals. In the run-up to Rio, we should reconvene the round-tables when there is something a bit more specific on the table, and work closely with both groups, the important thing being to get a good UK attendance.

[Henry Smith (Crawley) (Con)]

T7. The Food Standards Agency recently announced proposals for changes to the meat hygiene charging system, and I would be grateful to hear my hon. Friend’s views on them.

Agriculture and Fisheries Council (Agenda)

Caroline Spelman Excerpts

Thursday 15th December 2011 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

The next Agriculture and Fisheries Council is on Thursday 15 and Friday 16 December, in Brussels. I shall represent the UK on agriculture matters on Thursday and the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon) will be representing the United Kingdom on the fisheries items throughout the Council. Richard Lochhead MSP, Michelle O’Neill MLA and Alun Davies AM will also attend.

There are three fisheries and three agriculture items on the agenda. Discussions will take place on the following:

TACs and fishing quotas for 2012—The annual December negotiation package of fishing opportunities in the Atlantic and North sea for 2012.

TACs and quotas for fishing in the Black sea in 2012—Similar negotiations for stocks in the Black sea.

European Maritime and Fisheries Fund—The Commission will present the funding part of the CFP reform package which provides for a new instrument to replace the EFF and to integrate into it spending on the new EU integrated maritime policy.

CAP reform rural development proposal—A public debate focusing on the rural development proposal.

GM approvals—Council vote on approvals for use as food and feed of four GM varieties (three maize and one cotton).

Agricultural products promotions policy—Consideration of Council conclusions commenting on the green paper on promotion measures.

There are currently five points notified under any other business:

Commission presentation of a proposed regulation on sanctions against countries allowing non-sustainable fishing.

Cypriot item on aid for processed citrus fruit.

Protection of animals during transport—Commission report on implementation of the animal transport rules.

Codex Alimentarius—A presidency report back on the recent meeting of this UN body for international food standards.

Hungarian item on a technical aspect of the authorisation of GM products.

Finally, there is a ministerial lunch on Thursday 15 December to discuss certain aspects of rural development, including promoting innovation and risk management measures.