Brexit: Agriculture and Farm Animal Welfare (European Union Committee Report)

Duke of Somerset Excerpts

Tuesday 17th October 2017 Lords Chamber

[The Duke of Somerset (CB)]

My Lords, I welcome these two reports to the general series of Brexit debates, and declare my interest as a farmer in receipt of EU basic payments and as a landlord of other farms. The main theme running through both reports is the economic woe that would result from a hard Brexit, where WTO rules would prevail in the absence of trade and customs deals.

By way of background, UK farmers currently export at least 60% of their output to the EU. As the 18th speaker, I make no apologies for repeating some of the points that have already been made because they are very important. Our costs of production are far higher than our future competitors’, be it sheepmeat from New Zealand or beef from Brazil. Thus it would be a terrifying scenario were UK producers to face a likely 50% tariff tax into Europe, plus the customs checks, at the same time as they faced open doors to imports from the rest of the world at low or nil tariffs. A vivid example of this could be sheepmeat, which would look like this: New Zealand lamb imports, with no tariffs applied, arrive at about £2 a kilogram, as against UK lamb costs to the EU of nearly £6 a kilogram when the 50% tariff is applied. This will make no sense.

However, the Government have told us that they intend to maintain the current payments of subsidy to the end of this Parliament. But in terms of medium-term—let alone long-term—planning, which farming and certainly forestry need, this is not very reassuring. The Government talk of negotiating a deal as their preference, together with a changed subsidy basis at home, but daily we see the complexity of this, with the stalling of the talks in Brussels and opposition even to the reform Bill along the Corridor. Just look at the controversy over things such as third-country rules, rules of origin, the division of current quotas, or most favoured nation clauses. These are all challenging hurdles that we have to overcome.

Presumably we would like to see our citizens benefit from Brexit but the cost of food is rising and it is bound to do so. I hope that we will not abandon our animal welfare standards or our quality assurances but these will be extremely difficult to maintain in the face of free imports of beef from the US food lots or dubious chicken practices. One might say that the market will choose but when we buy our sandwiches or visit a food outlet, it will be nearly impossible to know the origin of the meat, especially as current food labelling can easily mislead. We also know that 85% of shoppers make their choice on price.

These standards add to our production costs, and the danger of a race to the bottom is well made in the reports —as is another major problem: our heavy dependence on EU labour. As in many other industries, our vets, our fruit and vegetable pickers and our milkers—as a few examples—are now mostly non-British. How is this to be addressed when we are unable to get the basic agreements as to the rights of our citizens living in Europe and vice versa? The House has frequently highlighted this problem, and it is vital that workers and employers have certainty now as to where they will stand at Brexit.

The question of definition between skilled and unskilled labour and the effect of this on visa approvals is paramount. Just because a worker cannot produce a paper qualification does not mean that he is unskilled. The recent fall in the value of sterling means a 20% reduction in wage values and it is not helping the retention of EU staff, so a recruitment shortage is already apparent. Perhaps the Minister will confirm that an assessment of needs will take priority over simple skill distinctions. I know that I am painting a gloomy picture, but I believe that it is realistic and typical of the disaster that Brexit will be for our country. We have—just—voted to leave, but we did not vote to become poorer.

Defra is planning its next 25-year environmental strategy and would like to shift support further in that direction. That is fine if basic farming can survive and contribute towards desirable projects, such as the maintenance of traditional features, soil and water quality and wildlife—even sheep grazing in marginal uplands. We have been hearing about the value of natural capital. Ecosystems that slow water, biodiversity that encourages raptors and environmental assets such as timber production for housing and carbon capture are excellent, but they all require a healthy rural economy to work.

Will the Government encourage the rollout of GM crops? GM could increase yields by 1 tonne per hectare, which would pay arable farmers for the complete loss of their current subsidy. Without knowing it, we are already eating quite a lot of GM food. However, 60% of UK land use is for grass. Livestock is the sector most reliant on subsidy, at well over 100%, whereas dairy is the least reliant: only 1p to 2p per litre is represented by subsidy. Thus, there will be some big changes to our rural landscape, and there is not much in these two reports to encourage anyone to welcome March 2019.

One possible exception is the chance to simplify and humanise bureaucratic administration and inspection. However, given our tendency to gold-plate EU regulations, I rather doubt it. I am sure the Minister will put a positive spin on the situation. But unless the Prime Minister herself can be shown the pitfalls of hard Brexit, our countryside and industry will be ill served.