Oral Answers to Questions

George Eustice Excerpts

Thursday 28th April 2022 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

2. What assessment his Department has made of the impact of food price rises on household budgets.

[The Secretary of State for Environment, Food and Rural Affairs (George Eustice)]

Since we last gathered for DEFRA oral questions, our noble Friend Lord Plumb has, sadly, passed away. He was a titan of the agriculture industry, and National Farmers Union president throughout most of the 1970s, during a period of great change. He then went on to be President of the European Parliament. I know that the thoughts of all those in the House will be with his family.

Agricultural commodity prices fluctuate in any given year based on factors including energy costs and exchange rates. High energy costs exacerbated by events in Ukraine mean that there is going to be pressure on food prices as a result of increased input costs. The Government monitor household spending on food. Between 2008 and 2016, the proportion of household income spent on food by the poorest 20% of households was about 16%. It then dipped to under 15%, but we can expect that proportion to rise.

[Mr Speaker]

Order. We only have until 10 am for these questions, so we have to help each other.

[Jessica Morden]

Family-run farms such as Castle farm in my constituency are really being hit hard by the cost of feed, fuel and fertiliser, which in turn impacts on the cost of things such as eggs, as reported by BBC Wales today, and just adds to the soaring food prices that are hitting families so hard. Why are the Government not doing more, especially when the supermarkets are now cutting prices?

[George Eustice]

The Government are taking action. We have made available an additional £500 million to help households with increased pressure on household budgets. We are also taking measures, for instance, to remove tariffs on maize to try to reduce the costs of animal feeds. The hon. Member is right that the supermarkets will absorb some of these costs, but probably not all.

[Chris Loder (West Dorset) (Con)]

What is my right hon. Friend doing to give the Groceries Code Adjudicator some more teeth to make sure that supermarkets do not inappropriately take advantage of the difficulties that we see with food prices? As he will well know, a lot of farmers face great pressure from supermarkets, and some would argue that they actually control the prices that farmers get when that is not really how it should be.

[George Eustice]

The supermarket adjudicator has, in recent years, made good progress in bringing transparency to the way relationships work between suppliers and the supermarkets. In addition, through the Agriculture Act 2020, we have introduced new powers so that in future we will be able to regulate and improve the transparency and fairness of contracts between farmers and processors.

[Mr Speaker]

I call shadow Secretary of State Jim McMahon.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

Britain is besieged by a cost of living crisis. Tax hikes and rocketing bills are making life harder for working people. We know that 4.7 million adults and 2.5 million children live in food poverty, 2.1 million food parcels were issued last year, and 1 million people will not eat at all today. Looking back on his nine years in the Department, what would the Secretary of State have done differently to improve rather than weaken the food security here in the UK?

[George Eustice]

Our food security, based on the amount of production we have in this country as a proportion of our consumption, has remained remarkably stable, at around 75%, for the past 22 years. Since we have left the European Union, we have had the ability to increase investment in farms and make available more grants for that, which we have done, and we have also introduced measures to improve transparency and fairness in the supply chain.

[Jim McMahon]

The Secretary of State knows that the cost of food will get much higher as farmers and producers grapple with increased costs and Government-inflicted labour shortages. As the Minister responsible for food security, will he urgently convene a cross-Government summit with the food industry, devolved and local government and charities to finally get ahead of the crisis—or are the Government once again just out for themselves, out of touch, and completely out of ideas?

[George Eustice]

I have already had many such meetings with the food industry and the agricultural industry about the current situation and the pressures on those input costs. The next meeting of the UK Agricultural Partnership in Scotland will focus specifically on the issue of food security.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

The shadow Secretary of State will be pleased to hear that Cabinet Secretary Mairi Gougeon has called for a four-nation summit, and I believe the UK Government have agreed to that, so I am pleased that that will see some progress.

National Farmers Union of Scotland president Martin Kennedy has said that the UK is on the verge of food security concerns not seen since world war two due to covid, Brexit and the war in Ukraine, with feed, food and fertiliser costs and labour shortages drastically affecting the farming and food production sectors. London School of Economics analysis shows that Brexit alone raised food prices by 6% in the past year or so. The Office for Budget Responsibility forecasts Brexit losses to be more than £1,250 per person, and 178 times bigger than trade deal gains, which, combined, are worth less than 50p per person. What support packages is the Secretary of State considering for the farming and food production sectors to ensure that their extra costs will not also be passed on to consumers?

[George Eustice]

The hon. Lady is right: I have spoken to Mairi Gougeon of the Scottish Government, and we are going to have the next meeting of the UK Agricultural Partnership at the James Hutton Institute, which approached me to host that event, and we look forward to it. On her wider points, the truth is that after the 2016 referendum household spending on food actually went down, but food prices have always been governed principally by the price of energy and by exchange rates.

[Robert Largan (High Peak) (Con)]

3. What steps he is taking to strengthen flood defences.

--- Later in debate ---

[Richard Thomson (Gordon) (SNP)]

7. What recent assessment his Department has made of the impact of Russia’s invasion of Ukraine on food security in the UK.

[The Secretary of State for Environment, Food and Rural Affairs (George Eustice)]

Ukraine is a significant global producer of many agricultural commodities, such as wheat and sunflower oil. The UK is largely self-sufficient in wheat production and imports a small amount, predominantly from Canada. However, the Russian invasion of Ukraine has had a significant impact on commodity prices. We are taking steps to assist the food industry in using alternatives to sunflower oil and working with like-minded countries around the world to ensure markets remain open and trade flows continue.

[Richard Thomson]

The conflict in Ukraine shows the fragility of many of our supply lines, and it has certainly increased the cost of many inputs and is disrupting the sector considerably. In order to minimise these effects, will the Secretary of State look again with his colleagues at having a more flexible immigration strategy and at uniting again on our sanitary and phytosanitary approach with the European Union, and take steps to make sure we are putting our food security on the same level as our energy security?

[George Eustice]

We do recognise the importance of food security; under the Agriculture Act 2020 we introduced a new requirement that every three years the Government must publish an assessment of our food security, and we monitor that closely. On the wider point, the reality is that food prices and international commodity prices have always been linked very closely to the price of energy, and the sharp spike in gas prices is inevitably going to have an impact, but overall we are still self-sufficient for about 75% of the foods we consume.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

8. What recent discussions he has had with his Faroese counterpart on access for Russian fishing vessels to shared UK-Faroese fishing grounds.

--- Later in debate ---

[Bim Afolami (Hitchin and Harpenden) (Con)]

T1.   If he will make a statement on his departmental responsibilities.

[The Secretary of State for Environment, Food and Rural Affairs (George Eustice)]

The Russian invasion of Ukraine has caused shocks to international commodity markets. Over the last few days, I have been in the United States to meet political leaders and the US farming industry to discuss the challenges that they face and the global situation. There are many similarities in our concerns, particularly about rising fertiliser costs and labour availability. This week, the UK issued a joint statement with the US on the importance of keeping markets open so that we can move wheat and other essential commodities to nations that were previously reliant on Ukraine for their supply.

[Bim Afolami]

I strongly support the Government and the Department in their introduction of biodiversity net gain, which could be transformative across the east and south-east of England in particular. Will the Secretary of State commit to ensuring that biodiversity net gain becomes mandatory on all construction sites in England by the end of 2023?

[George Eustice]

My hon. Friend is right about the importance of biodiversity net gain. It will ensure that we can get the housing development that we need while protecting nature and building back greener. We have committed to a two-year transitional period to ensure that biodiversity net gain is introduced in that timeframe.

[Mr Speaker]

We come to the shadow Minister, Ruth Jones.

--- Later in debate ---

[Dave Doogan (Angus) (SNP)]

Input costs in agriculture are at a tremendous high, including for feed, fuel, fertiliser, energy and wages. On that last point, the Home Office’s pernicious surcharge on growers of £10.10 an hour has no basis in reality. Will the Secretary of State explain what the Home Office is thinking, and will he come to speak to my local growers to see how they can make their way through this unnecessarily difficult situation?

[George Eustice]

In introducing the seasonal agriculture workers scheme, we were very keen for it not to undermine the domestic labour market and prevent people from joining it. We wanted to give industry access to labour, but not to cheap labour. That is why we followed the Migration Advisory Committee’s recommendation to have a slightly higher minimum wage for those coming in under the scheme.

[Robin Millar (Aberconwy) (Con)]

In Wales and Aberconwy, farmers have told me of their concerns that an unintended consequence of encouraging tree planting is, specifically, the creation of a new asset class by carbon capture incentives, which encourage the purchase and forestation of viable upland farms. Will my right hon. Friend reassure them that he has that under control?

[George Eustice]

I reassure my hon. Friend that we are well aware of that challenge. My noble Friend Lord Benyon is leading a piece of work on the green market, including looking at where we should allow private capital to support the development of new forestry.

[Wera Hobhouse (Bath) (LD)]

Further to the questions about sewage, there are fears that dogs swimming in rivers will be poisoned by sewage. Will the Secretary of State make it mandatory for water companies to report on the number of dogs and animals poisoned in their rivers and name and shame the worst offenders?