Groceries Code Adjudicator Bill [Lords]

Huw Irranca-Davies Excerpts

Monday 19th November 2012 Commons Chamber

[Mr Spencer]

I shall be talking about possible improvements. I think that there is a fair amount of cross-party agreement on the way in which the Bill can be improved. However, I also want to talk about some of the good practice that we see out there. We have heard a great deal of criticism of supermarkets and the way in which things work, but there are plenty of examples of supermarkets and farmers working closely together to improve the supply chain, add wealth to both businesses, and bring employment to rural areas. I think we should recognise that there is more to be celebrated than there is to be criticised, although we need to ensure that when things go wrong, there is a way of stepping in to sort them out.

When I embarked on my business career, my grandfather told me that the definition of a good deal was “a bit for me, a bit for you, and then another deal”. I think that we have reached a stage at which the supermarket sometimes wields too much power in the relationship, to the extent that I almost feel obliged to make it absolutely clear that some of the practices that I intend to highlight bear no resemblance to the activities of any of my constituents. There is a genuine fear out there of blacklisting and being removed from the stocking lists of supermarkets, such is their power.

I think it worth examining the practices that have gone on in the agriculture industry and its relationship with supermarkets. The first that springs to mind, which no one has mentioned so far today, is the operation of payment terms, which the supermarkets have stretched to a point at which big business is being financed by little business. That applies not only to agriculture, but to many other UK industries in which little suppliers are delivering products to big suppliers. The big suppliers do not pay for more than 90 days, and the smaller producers are forced to borrow from their banks in order —in effect—to lend the money to them.

One of the most shocking practices, to which other Members have referred, is the practice of rejecting loads of products when the price of the market goes through the roof, when there is over-supply, or when the weather changes, as in the case of the strawberry industry. There is real abuse of the system when supermarkets are able to reject a load that is perishable and cannot be returned without giving any recompense to the primary producer.

I am told that when a contract is being negotiated with a supermarket, the first line of the negotiation relates not to the retail price, the production price or even the wholesale price, but to the margin that returns to the supermarket. The primary producer must guarantee that margin. That cannot possibly apply to any other relationship between supply and retail. Whether the product is cauliflowers, carrots, plimsolls or widgets, if the supermarket decides to arrange a promotion and reduce its retail value, the primary producer will lose out while the margin of the supermarket will be protected and never squeezed.

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

Does the hon. Gentleman agree that those margins are seen not only in the direct relationship between producers and major retailers, perhaps on contract terms, but throughout the supply chain? Sometimes a retailer will say “Well, it’s nothing to do with us, guv”, but somewhere along the line an intermediary will be saying, “We want those margins.”

[Mr Spencer]

That is a valuable point. There have been a number of references to the dairy industry, and to small dairy farmers all over the United Kingdom. It should be borne in mind that very few small dairy farmers deal directly with the supermarkets. They nearly always negotiate through a dairy producer, someone who is making cheese or yoghurt, or even a bottling plant. The hon. Gentleman has made an important point, and we shall probably need to consider it once we have sorted out the Bill.

Another important topic is that of promotions. Many consumers will no doubt think that “buy one, get one free” offers and other promotions show supermarkets’ generosity, as they must be shrinking their margins. The truth, however, is that it is the primary producers who pick up the tab for the reduced price of the product, and they are often also asked to increase the supply of that product.

Earlier in the year a series of adverts ran on TV promoting asparagus at half price. The weather had been so shocking that I do not think there can have been a single blade of English asparagus on the market at that time. I almost shuddered for our asparagus producers. Many of them had obviously signed a contract to supply a supermarket, and an advertising spot had been booked six months in advance, without regard to the weather. When that time slot in the calendar came, the adverts rolled out and asparagus producers were probably having to buy asparagus from Mexico or Spain to meet their contracts to supply that promotion. There is no flexibility in the system, or common sense from some supermarket buyers.

The worst practice, however, is backdating. A primary producer can supply a supermarket for two years, let us say, and then the supermarket can suddenly say to that producer, “By the way, we’re backdating the price of all that product you’ve supplied to us for the last 12 months, and you owe us £50,000.” That primary producer is then faced with the prospect of either finding that money from somewhere—borrowing it or taking it out of their bank account—or reneging on the contract and never being dealt with again. That truly is an abuse of power. I hope the grocery ombudsman will be able to stop such practices.

Key issues are what tools will be available to the ombudsman and how he will make sure the code of practice is adhered to. That brings us to schedule 3 and the subject that has been dominating the debate: if the adjudicator cannot fine supermarkets, will he have sharp enough teeth to ensure that the code is adhered to? I do not ask the Minister to commit to anything in his winding-up speech, but I ask him to assure us that he will have an open mind and will consider the Committee’s deliberations, and be willing to make an amendment if he feels that that is the right thing to do.

I reiterate that there is much more good than bad in this Bill and it represents a great step forward. With the will of the House and a fair wind, I think we can get to the right place for the primary producers, and also for our consumers, who want good quality food in our supermarkets at the right price, and, crucially, at a price that is sustainable.

Small dairy farmers begin the process of producing milk by choosing an animal to breed. They then breed that cow, which takes nine months, bring that heifer to full production, which takes two years, and then, finally, they get milk from that animal. It takes four years of hard work and investment to get to the point of supplying any milk, therefore. In that time, supermarkets can change their contract on an hourly basis. The whole of the risk is with the primary producer, and at present there are occasions when the whole of the reward is with the retailer. I sincerely hope that we can start to redress the balance in that relationship, to the benefit of supermarkets, primary producers and consumers.

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

It is a great pleasure to follow my hon. Friend the Member for Hayes and Harlington (John McDonnell) and his appeal for listening, for unanimity and for constructive work in Committee. This very good debate has revealed common themes and shared aims on both sides of the House. It has also shown that there is a real will, which we share, to get the Bill on to the statute book as soon as possible in a form that is fit and proper and that will enable it to do the job that we and Ministers want it to do. We do not want to miss this golden opportunity to get this absolutely right.

I have a radical suggestion. Perhaps we should dispense with the need to find names for a Committee, and simply keep on sitting here now until we have put the Bill to bed. With such high levels of experience in the Chamber today, and such clarity on what is required of the Bill, we ought to strike while the iron is hot. I am not sure whether all right hon. and hon. Members would welcome my suggestion, but I shall go on to pull out some of the themes that have been raised in the debate. We often struggle to discern any themes coming out of a debate, as Members put forward different—sometimes very different—viewpoints, and it can be impossible to pull any sort of consensus out of the morass. Today, however, there has been utter clarity, complete consistency and even—dare I say it?—a striking degree of unanimity.

That unanimity centres on two specific issues. First, real congratulations have been offered to the Ministers on bringing forward the Bill, and I offer the ministerial team my own congratulations as well. There has been some criticism over delays, some of which has been knocked back to us for causing delays while we were in government, but the fact is that we are now here and we need to get this right. That is one area of consensus: we all want to see the Bill reach the statute book as soon as possible.

The second area on which there is consensus is that the Bill is not yet fully formed. It is not far off, but it is not fully formed. To extend the metaphor that many others have used today, it is something of a pup that is showing great potential, but it is not yet a watchdog. It is all bark—in the naming and shaming—but there is little bite. As the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson) suggested earlier, it is something of a fluffy and likeable little toy, rather than a trusty hound that can bare its teeth when needed and give the occasional nasty nip to the sensitive parts of a miscreant.

Let me turn to the one matter on which I have heard not one dissenting voice throughout the whole debate from any Member in any party, except during the opening remarks. I hope that the Ministers will be open to what they have heard about fines, because there was a remarkable level of consistency and agreement around the Chamber on that point. The Under-Secretary opened the debate with some well-balanced comments, saying that the arguments were finely balanced. She went on to say that financial penalties should initially be a reserve power. I do not think that the arguments are that finely balanced; I believe that there is compelling evidence to the contrary, and I shall say more about that in a moment. If they are so finely balanced, however, I would urge her to listen to the voices that we have heard in the House today. One after another, Labour, Conservative, Liberal Democrat and Unionist colleagues from across the water have stood up to say, “Put those fines on the face of the Bill.” Putting them somewhere else in the back pocket or leaving them at home to get them when they are needed means that the message going out to major retailers will be quite different.

Quite honestly—my hon. Friend the Member for Edinburgh South (Ian Murray) and I have discussed this—should we ever soon be back in government, we would not want to have to go to look for the tools that have been carefully hidden somewhere; we would want them to be right in our hands so that we can use them if they are required—not as a first resort and perhaps not at all, but we want them there as an option. That brings me to the first point about the question being finely balanced. We need all the tools in the toolbox from the off—not one tool left at home or not even yet purchased from the shop, because a reserve power is one that risks not being used.

Secondly, naming and shaming can indeed be powerful on occasions, but it is not always the most appropriate tool for the job. If it is the only tool available, I guarantee to Ministers that it will fail. One after the other, Members of all parties have raised instances where name and shame has been completely ineffective. Name and shame was not a rip-roaring success this spring and summer in respect of the dairy crisis. [Interruption.] The Minister says it was, but no; I can tell him that it played a part, but it was not effective. There was plenty of naming and shaming from February, March and April onwards. It was in the newspapers and in our postbags—day in, day out—so we knew who was being named and shamed, but they did not move, adjust or go backwards. What made the difference was not the pure act of naming and shaming, but protests—protests that were painful and unwanted, such as blockading dairies. Thousands of farmers confronted a Minister across the road from here. He was doing his job by facing up to it, but he was confronted by angry farmers demanding action. The Minister then went away and banged heads together. It was not naming and shaming in the local papers or even naming and shaming every day on the front pages of The Daily Telegraph or the Daily Mail that made a difference. What worked was farmers coming together to say, “This is not working; we have got to do more”. We should not have to resort to that, which is why I say in all honesty to Ministers, “Please do not rely on the single tool of naming and shaming. The message going out to the retailers is that you are not serious. You must have the tool in the back pocket ready to use in case it is needed.”

The third aspect is the need to put the power to fine on the face of the Bill. This is supported not only by Members on both sides of the House, as we have said, and by many in the other place who debated the issue and argued strongly for it. I shall not read them all out, but the need for the power to fine is also supported by War on Want, Traidcraft, the world development unit, the Country Land and Business Association, the National Farmers Union, NFU Scotland, the Farmers Union of Wales, the Ulster Farmers Union, the Association of Convenience Stores—the voice of local shops—Fair Deal Food, Action Aid, Banana Link, CAFOD—the Catholic Agency for Overseas Development—the Campaign to Protect Rural England, the Church of England and the Women’s Institute. For goodness’ sake, work with us on this one. We will help Ministers to become heroes if they listen to those voices, as they cannot all be wrong, even if I am. Those organisations represent people right across the supply chain. They include the Federation of Small Businesses for goodness’ sake; it is everybody.

I will not read out the early-day motion that the Minister signed once upon a time. [Hon. Members: “Go on!”] No, I will not; it would be unfair. I know, however, that in his heart of hearts, the Minister believes that this is the right course of action, as we have had this discussion before in debating chambers. When we talk about teeth, it does not mean the beast in front of us at the moment. It means having those penalties on the face of the Bill.

Let me move on to the excellent contributions to the debate, as I think the case for having financial penalties is overwhelming, clear, compelling and unarguable. We began with the contribution by my shadow ministerial colleague, my hon. Friend the Member for Edinburgh South (Ian Murray). It was an excellent opening to the debate. In welcoming the Bill, he was consensual, but his speech was also challenging where it needed to be, which is what we as the Opposition should do.

The hon. Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, delivered a powerful and, as usual, forensic analysis of the Bill. Like all of us she welcomed it, but she also drew attention to shortcomings which I hope we shall be able to explore in detail in Committee.

My hon. Friend the Member for Clwyd South (Susan Elan Jones) pointed out that if we got the Bill right, it would be good for consumers. The Minister will agree with her observation that it would promote best practice and fairness throughout the management of the supply chain, would allow for investment in the boosting of productivity and innovation, and, in so doing, would provide an opportunity to reduce costs for both producers and consumers.

We heard an excellent speech from the hon. Member for Camborne and Redruth (George Eustice), who has spoken about this and similar issues in other debates. Today, he spoke eloquently and with great experience about the need for the Bill to be strengthened. He has made that point consistently, not least when interviewed by the Daily Mail for an article published on 16 November. I commend him on that, although the Daily Mail is not my regularly reading material.

The headline above that article was

“Supermarkets that bully small suppliers will NOT face fines after ministers cave in to pressure”,

but I do not believe that Ministers are caving in to pressure. I believe that they want to do the right thing, and to listen to what the hon. Gentleman and others have said today. I hope that they are open to his argument, and that the Government Whips will enable him to serve on the Committee, where his experience and insight will be welcomed. I loved his observation that naming and shaming was the preferred stand-alone option of the British Retail Consortium. He wondered, as we did, why that might be.

The hon. Member for North Antrim (Ian Paisley) spoke powerfully—as he always does—for food production and processing industries throughout Northern Ireland. He called for the payment of a living wage in agriculture, and we thoroughly agree with him about that, as we do about much else that he said. He noted the strong support of the Ulster Farmers Union, and the individual support of its president, Harry Sinclair, for a significant strengthening of the Bill. He said that if the price-fixing by major supermarkets was occurring because they were a cartel, they should be—I think that these were his words—kicked where it hurts, which I am sure, in his mind, is right in the adjudicator’s office.

The hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) said that the position of Government Members on regulation was often misquoted, and that they were not against regulation but in favour of better regulation. That, he said, was exactly what was required in this instance. Poor regulation was the problem, he said, but the Bill represented good regulation and—again—should be strengthened. The ability to make a living in the countryside must be preserved, and that included the living made by the small farmers in his area. He said that he had received only one piece of correspondence saying no to fines, but dozens expressing the opposite view, so why should fines not be levied?

My hon. Friend the Member for West Bromwich West (Mr Bailey), the Chair of the Business, Innovation and Skills Committee, welcomed the Bill and the fact that the Government had adopted about 80% of the Committee’s recommendations. However, he focused on the shortcomings of the Bill and the need for it to be strengthened further. He clearly felt that naming and shaming on its own, without additional penalties in the Bill, would be insufficient.

The hon. Member for St Ives (Andrew George), who has done so much in supporting the Bill’s progress and in marshalling a grand coalition of partner organisations throughout the supply chain both in the United Kingdom and internationally, rightly acknowledged those organisations in a roll of honour, but also acknowledged the many parliamentarians in all parts of the House who have brought us to this point. I think that that consensus-led approach should continue in Committee, but that we should aim not simply to let the Bill roll forward and accept whatever is presented, but to improve it so that we get it right this time.

My hon. Friend the Member for Ynys Môn (Albert Owen) had a private Member’s Bill that tried to introduce precisely this position, and he reminded us that his preference, as expressed in his Bill, is for the term “ombudsman” rather than “adjudicator”. He welcomed the Bill, but bemoaned the delay. He alleges that was fashioned by Government Whips; I am sure that is not true. He called for penalties to be stated in the Bill and for Ministers to name and shame those who have lobbied against strengthening its provisions. The Minister who opened the debate declined to try out the excellent mechanism of naming and shaming, however. The Minister who will conclude the debate can take the opportunity to try that out, and we will then see tomorrow morning whether it has any effect. Who is against strengthening the Bill? What are the names of those who oppose strengthening it? I would like to know, as I am not getting any letters to that effect. Instead, I am receiving calls from a wide coalition of people, including Members of this House, for us to work together and strengthen the provisions. I am convinced the Minister who will conclude the debate wants that as well, and I am trying to help him. Indeed, I am trying to help both Ministers.

My hon. Friend the Member for Ynys Môn highlighted the possibility of the entire supply chain being open to investigation and possible sanctions, and asked how we would handle that. Will the Bill result in that happening? After all, these issues involve not only the relationship between the big retailers and the individual producers, but a wide and complex distribution network across the supply chain.

I chatted briefly at the side of the Chamber with my hon. Friend about this evening’s very disappointing breaking news about Vion, and another hon. Member has raised that, too. It is a major employer and economic force in many constituencies, including that of my hon. Friend. I hope the Minister will be able to give us some assurances as to what role the Government can play in trying to protect these jobs at Vion and the economic benefits they bring to many constituencies.

The hon. Member for Carlisle (John Stevenson) chairs the all-party group on food and drink manufacturing. He saw the Bill as a positive encouragement for the supply chain, recognising good practice—of which there is, indeed, a lot. He made a forensic contribution. Interestingly, I noted that he supported the proposal that penalties should be stated in the Bill, and he agreed that the adjudicator should report on its success in respect of the code and whether changes to its scope and remit might be needed. I hope the hon. Gentleman finds himself serving on the Committee—although I do not know whether he shares that aspiration.

My hon. Friend the Member for Bristol East (Kerry McCarthy) reminded us about the new farming Minister’s previous stalwart support for an adjudicator with real teeth. The farming Minister, who will conclude this debate, was right then, as I have told him before, and he can help us strengthen the Bill to get the right policy now as well. My hon. Friend also talked about the important issues of food waste and food poverty, and explained how those topics tie in with the Bill. She made a worthy contribution.

The hon. Member for York Outer (Julian Sturdy) said the Bill would be undermined if the adjudicator lacked the teeth it needed, and he described it as a referee without a whistle or a red card in his—or, I should point out, her—pocket. He is absolutely right. He said an adjudicator will have little impact without the metaphorical red card in its metaphorical pocket, and he rightly raised the spectre of the dairy crisis. He encouraged Ministers to show strength and to strengthen the Bill.

The hon. Member for South Down (Ms Ritchie) said that the Bill needed to produce lasting reform, and that it must redress the imbalance in the supply chain so that there is long-term sustainability and a real economic boost throughout the supply chain. She called for statutory teeth as being a necessity. She spoke, too, of the need for robust powers of investigation and enforcement, and the ability to receive representations without fear of reprisal. Indeed, the issue of anonymity and people being able to come forward without fear of reprisal was another common theme. The hon. Lady also commended the idea of fines for serious breaches of the code. She said naming and shaming alone was not good enough because it was not strong enough. She called for an emboldened Government who will strengthen the Bill.

The hon. Member for Ceredigion (Mr Williams) has great experience in one of the great farming areas of Wales, and he raised the Ceredigion test, asking whether the Bill was robust enough. His answer was, “We like the fact the Bill is here, but it doesn’t yet pass the Ceredigion test.” I suggest to him that if we work together, we can make it pass that test. He cited the Women’s Institute’s support for strengthening the Bill; it is about not just jam and Jerusalem, but adjudication.

The hon. Gentleman made a good point about accessibility and the adjudicator’s remit, and I look forward to amendments being tabled on the subject in Committee. He called for “Chwarae Teg”—fair play. My hon. Friend the Member for Llanelli (Nia Griffith) said that supermarkets had nothing to fear from a levelling of the playing field, and she rightly criticised the retrospective varying of supply agreements. What is that all about? It is the idea that a retailer or an intermediary can go back to a producer and say, “I’m sorry, you have to find some cost-cutting measures after the event.”

The hon. Members for Sherwood (Mr Spencer) and for Banff and Buchan (Dr Whiteford) are particularly affected by the Vion decision, and I hope that the Minister will respond on that. I am afraid that I do not have time to respond to all the comments that were made. The hon. Member for Tiverton and Honiton (Neil Parish) welcomed the Bill, as did my hon. Friend the Member for Glasgow North East (Mr Bain). My hon. Friend the Member for Hayes and Harlington (John McDonnell) spoke up for people working in these sectors. The common theme that emerged time and time again was a welcome for the Bill but the fact that it would not be quite right until we strengthened it.

The Bill is good, but it is not yet quite good enough. It has cross-party support to get it on the statute book as soon as possible but, as we have heard, it needs cross-party support to go further and give it real teeth. It was rightly noted in the other place that Labour’s fingerprints are all over the Bill, but so are the fingerprints of hon. Members who serve on the Select Committees on Business, Innovation and Skills and on Environment, Food and Rural Affairs, as well as the fingerprints of Back-Bench champions such as the hon. Member for St Ives, my hon. Friend the Member for Ynys Môn and many others. I say to Ministers and to all hon. Members, not least those who might serve on the Bill Committee, let us take the opportunity to make this not just a good Bill but a great Bill, and work together to make it so.

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[Mr Heath]

I understand the hon. Gentleman’s point, and that is clearly something we can discuss.

The hon. Member for Banff and Buchan (Dr Whiteford) mentioned the very bad news about Vion UK, which I understand will affect not only her constituents in Strath of Brydock, but many others in Livingston, Portlethen and Broxburn, and my hon. Friend the Member for Brecon and Radnorshire mentioned the situation in St Merryn in Merthyr Tydfil. I can certainly give an assurance today that we will happily engage with colleagues in the devolved Administrations—most of those jobs are situated in Scotland or Wales—to see whether there is anything we can do to assist them in dealing with what will be a very significant event in the local economy. If there is anything we can do, I can give an assurance that we will do our best.

My hon. Friend the Member for Brecon and Radnorshire also talked about—

[Huw Irranca-Davies]

I would not want the hon. Gentleman to miss the opportunity to respond to the 20 Members who spoke in succession about strengthening the Bill by introducing fines, which was also referred to the hon. Member for Thirsk and Malton (Miss McIntosh), who chairs the Environment, Food and Rural Affairs Committee.

[Mr Heath]

I was about to move on to that, and it is a great shame that the hon. Gentleman took up some of the time I was going to devote to it.

Common Agricultural Policy

Huw Irranca-Davies Excerpts

Thursday 1st November 2012 Westminster Hall

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

Welcome to the proceedings, Mr Chope. It is a great honour and a pleasure to serve under your chairmanship. On behalf of the Select Committee on Environment, Food and Rural Affairs, I am delighted to have secured this timely debate. Before I go any further, I draw colleagues’ attention to my modest entry in the Register of Members’ Financial Interests, which is pertinent to this debate.

We are discussing our first report of this Session, which I commend to the House, on greening the common agricultural policy, and the Government response. Our debate is timely for a number of reasons. The next round of CAP reforms will build on those achieved by Commissioner MacSharry and Commissioner Fischler, and now on the proposals launched by Commissioner Ciolos. The European Commission package introduces numerous greening measures with which farmers will be asked to comply. One of the first conclusions of the Committee was that there is insufficient detail for us to do an in-depth analysis, although we managed as best we could. Some of the problems that I will discuss include potential problems of cross-compliance, the possibility that the proposals might overcomplicate rather than simplify the CAP, and our main concern that it should not be a one-size-fits-all policy.

The backdrop includes the unprecedented weather conditions faced by UK farmers this year. We started with a drought that then became the wettest drought, followed by a late harvest in which many crops rotted in the ground, and our current potato crop is virtually impossible to harvest. I recognise that not only the farmers in my community, but those across Britain and the whole of Europe, have suffered. That will affect falling farm incomes.

I am delighted to see the Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Somerton and Frome (Mr Heath), in his place, and I welcome him to his new position. The Department for Environment, Food and Rural Affairs will not publish farm incomes until January. I shall certainly watch them closely to see what the impact has been. One study on the area of northern England in which I grew up—I am sure that it is not dissimilar to the area that I now live in and represent—shows that hill farmers’ incomes have fallen to £8,000, which is unsustainable.

Two challenges form the backdrop for the next round of CAP reform: food security and climate change. Those twin challenges were identified by the outgoing Labour Administration. The Committee conclusions state that we believe that the Commission should allow member states to tailor environmental measures to their local environmental and agricultural conditions. I commend successive British Governments’ approach; we have a raft of agri-environmental measures that place our farmers ahead of many other European farmers. I believe that our agri-environmental schemes, among the best in Europe, deliver meaningful year-on-year environmental benefits. The Committee concluded that those benefits must not be watered down or diminished by the Commission’s greening proposals.

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

I commend the hon. Lady on her introductory remarks to this debate. It is a good opportunity. I agree entirely with her comments about flexibility. We support the Minister in seeking to achieve that flexibility for UK farming, but farmers in other EU nations should not be allowed any sort of opt-out. That would add further inequality to the playing field that we are trying to level.

[Miss McIntosh]

I absolutely take the hon. Gentleman’s point. It is essential that farmers in other European countries should catch us up. I will come to in-depth issues such as modulation in a moment.

I hope that the Minister will tell us where we are procedurally. I had the opportunity to visit Brussels last month, and I understand that MEPs have tabled about 7,000 amendments to the Commission proposals to reform the CAP. The agriculture committee in the European Parliament now has co-decision. It is vital that all of us with an interest snuggle up to MEPs of all nationalities and try to influence them to use that new power responsibly.

The European Parliament agriculture committee has set itself a deadline of the end of November for negotiating and voting on compromise amendments. Given the challenges that we face nationally—due to weather, falling incomes, rising fuel and feed costs—and globally, we must increase production significantly. We are asking farmers to do so by using both land and chemicals more responsibly, and by using less water.

Will the Minister consider the budget and procedure? The EU budget as part of the multi-annual financial framework proposes—I hope I am not being too controversial; I think we all agree that we must reduce overall expenditure on the CAP—that spending on the CAP will fall from 37% of the total EU budget in 2014 to 27% by 2020. It will still total €38.3 billion. I had understood that structural funds would undergo wholesale reform and would fall, but they are set to rise by 18% by 2020, to a total of €76.6 billion.

What will the impact be if we do not secure a freeze but move to annual budgets? What will the implications be for reaching agreement on the farm reforms if the debate on the multi-annual financial framework is delayed from November to December? The message that I am hearing loudly and clearly from farmers in my constituency—I am sure this is shared across the country—is that they need an element of certainty. They need to know what the reforms will be and they need sufficient time to implement them. Lead-in time is crucial.

The UK food system faces other problems. As I mentioned, prices are rising. I am told that food price inflation is running at 4%, but farm incomes are falling. We must grasp that.

Will the Minister say more about what will happen to the rural development programme for England? Is that programme bound up with the negotiations? Again, will farmers have an element of certainty?

I recognise that we have a new Minister and a new Secretary of State, but it would be helpful if the Minister set out the UK’s negotiating position. What discussions have been held with the devolved Administrations? Who are our main allies in the Council of Ministers and, just as importantly, the European Parliament? Will he update hon. Members on Commissioner Ciolos’s response to the original proposals and the British negotiating position? Does the Minister agree with the Select Committee’s view, which we set out clearly in our report, that the Commission

“should set the high-level objectives for the CAP and provide for flexibility of approach through delegating the details to Member States while ensuring that there are…safeguards to protect the competitive position of UK farmers”?

Does the Minister agree that the CAP is complex and burdensome? Will he agree to press for further simplification of the CAP? Does he share our concern that the proposals on ecological focus areas and the definition of “smaller farmer” will lead to farmers having a less clear understanding of the conditions with which they have to comply? Will he ensure that the policy is implemented and provides value for money for the British taxpayer?

What is the Minister’s response to the Danish bid for a rebate? Returning to the budget, will he confirm that the implications of the loss of the British rebate in the Blair negotiations are severe? The rebate was lost on the non-agricultural element, which, in the scenario I set out earlier, is due to increase, and the rebate that we kept is only on agricultural spending, which is due to decrease from 37% to 27%. The implications for farmers are very serious.

Will the Minister further ensure that the reforms to the CAP are coherent with the UK’s existing agri-environment schemes? Any greening requirement should take account of environmentally beneficial activities undertaken by a farmer under an agri-environment scheme.

To protect the competitive position of UK farmers, the Select Committee would say that modulation has gone far enough. In powerful evidence to the Committee, the national farming unions said that English farmers are already subject to a higher modulation rate, whereas continental farmers enjoy a higher direct payment rate. Obviously, if we are modulating to a 19% rate in England and 11% to 14% in the devolved Administrations, whereas most other EU countries are modulating only to 10%, the implications of the Government’s proposal to transfer money between pillar one—direct payments—and pillar two are extremely serious. Farmers told us in a previous inquiry that the higher rate of modulation creates unfair competition, and they advocated either equal rates or no modulation. DEFRA seems to argue that higher rates of modulation are needed in England to fund environmental stewardship schemes. How can the Minister convince hon. Members that, by doing that, we are not disadvantaging our farmers?

One of my main concerns is about the Government’s response to the CAP report, particularly to recommendation 28 that

“farmers currently in agri-environment schemes will receive no penalty for leaving…should either the design of or payments under those schemes alter as a result of ‘greening’.”

The Government response states:

“However, there is no legal basis for allowing farmers wishing to withdraw from their agreements ahead of the new programme (and before the five or ten years of their agreements has expired) and they would be required to return all payments received during the life of their agreements, plus interest, in the normal way.”

That seems flatly to contradict the Minister’s predecessor, my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice), who told the Committee that no farmer will suffer a penalty from the new greening measures if they have entered a new 10-year scheme. That is a real and present problem, because our farmers are under great pressure to sign up to new agri-environment schemes.

[Huw Irranca-Davies]

The hon. Lady is pursuing an important point, and I would be concerned if there was some contradiction, but does she agree that if protection is afforded by the Minister in the EU negotiations for those farmers who are in agreements, to ensure that they do not lose out and are not penalised, reciprocally we should expect them to continue in those agreements as long as they are not penalised? That is signally different from possible future schemes. We want people to continue in agri-environment schemes for the wider public good.

[Miss McIntosh]

That is the case, but farmers who are coming to the end of a 10-year agreement now face the prospect of receiving no agri-environmental moneys. What should we recommend to each individual farmer who comes to our surgery or whom we meet at auction marts on a regular basis? What is our advice to them? Will the Minister give a commitment that they will not be penalised? My recommendation is not that they exit a scheme that is still running, but my request is for confirmation that if they enter a new 10-year scheme, which I understand the Government are encouraging them to do—farmers would currently benefit from existing EU agricultural moneys—they will not be penalised. That is precisely the response that the previous Minister gave. I am afraid that the Government’s response set off alarm bells.

There are a number of other issues that I, and I am sure the Select Committee, wish to flag up. We need to ensure that the reforms do not damage food security and that we do not, as a result of the greening reforms, take land out of food production. I do not think that is the Government’s wish, but it could be the consequence of the Commission’s reforms. We want assurance that this country’s agricultural sector will remain competitive and viable so that our farmers do not lose out to competition from devolved areas of the UK or other EU countries.

Will DEFRA set out more clearly how it will reduce reliance on direct payments, and outline the tools it needs to do so? I have absolute confidence in the ability of the British farmer to go out, match and compete with the best in Europe and the world, but if we are taking our farmers out of direct payments, we want an assurance that other EU farmers are also coming out of direct payments and that there is that elusive level playing field.

If the Minister can give us new ideas on how to make UK farming more competitive, that will be welcome. I hope he will reject the Commission’s one-size-fits-all policy. The Committee favours greater flexibility for member states to develop measures that are better tailored to local environmental and agricultural circumstances, and we believe that any greening policy should enable that to happen. We also advocate that the Commission limit itself to setting out the high-level objectives, thereby allowing member states to implement how they will apply on the ground in each country. We also make the plea that DEFRA must stop gold-plating the regulations—something first identified by my noble Friend Lord Heseltine. I commend the work that DEFRA has done through the Macdonald taskforce. We watch with interest to see precisely which regulations will be removed or renegotiated. However, when the new proposals come before the House to be implemented at the end of the process, we must not gold-plate them. We must have a categorical assurance from the Government—from the Minister today—that that will not happen.

We set out our concerns relating to crop diversification and the Government responded, so I think they are alert to them. There were also issues relating to the retention of permanent pasture and ecological focus areas. I have a particular concern, which is shared by those who represent upland farmers and reflected in the Committee’s conclusions, about the role of tenant farmers in agriculture. Will the Minister ensure that any negative impact of CAP reform does not disproportionately affect them? I welcome the Government’s response, which states that the definition should relate to active farming of land, rather than the type of organisation. I mentioned the potential exit. I urge the Government to take the opportunity to explain how the exit strategy will work for those farmers who are signing up to new agreements.

On the definition of public good, I have to mention—colleagues would be disappointed if I did not—the project in my own area, the Pickering pilot scheme, which enjoys funding from a number of sources. If the scheme works, it could be rolled out across the rest of the country. I therefore hope that the Minister will look favourably on that type of project, under the definition of public good, and that the negotiations will allow that to happen.

The reforms greening the CAP have to balance the twin challenges of food security and climate change. The absolute bottom line is that greening the CAP should not damage the competitive position of UK farmers. I hope the Minister will respond positively to the debate, clarify the Government’s response to our report on the issues I have mentioned, update the House on the proposed timetable, and give us an assurance that the CAP will be agreed before the end of the Irish presidency, allowing enough time for our farmers to prepare and have the certainty of knowing when the reforms will be implemented.

DEFRA has a big agenda: CAP reforms, common fisheries policy reform, bovine TB, dairy package and so on—I will not list them all. However, EU plans to impose new environmental regulations must not damage the very good work that our farmers have undertaken to green our land. I hope the message will go out that we are very European and very green, and that we will not allow the Commission proposals to damage the work that our farmers have done. There should not be a one-size-fits-all policy. We cannot expect farmers from Finland through Britain to Sicily to be tied down by rules that are too prescriptive. We hope that the Department will not compound that with gold-plating. I commend our report to the House.

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[Neil Parish (Tiverton and Honiton) (Con)]

It is a pleasure to serve under your chairmanship, Mr Chope. I thank my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), the Chair of the Select Committee, for securing the debate.

First, I want to say that I am probably a very sad case, because I spent 10 years in the European Parliament, and all that time was spent on the agriculture committee, which I chaired from January 2007 to June 2009. I am actually waiting for the men in white coats to come and get me; I am sure they will, before too long. The only thing that gives me some recompense is the knowledge that I will probably not be the only one who is taken away. It is a good idea to debate greening the common agricultural policy. Like the Chair of the Committee, I want to start with some history—how we have come to the place we are in—and the issue of the mythical level playing field that farmers always seek, but that often seems further and further away.

We not only do not have a level playing field across the 27 member states of the European Union, but do not have a level playing field in the United Kingdom, because we have three different agricultural policies. The policy in England is to spread payments across the land and is not so historically based on the number of cattle and sheep kept, whereas in Wales and Scotland payments are made entirely on the basis of historical payments made to farmers between 2000 and 2001-02. There is no doubt but that we must look again at some of the systems of payment, because it is ridiculous to base an agricultural policy from 2014-15 to 2020 on payments made to farmers in 2001-02.

Another issue, which is probably more European, is that Estonia receives €70 per hectare and Greece €500 per hectare, so there will have to be a little bit of levelling of those payments. When in the European Parliament, I was not always admired by the French and Germans when I said, “In 2004, when the new member states came in, they were not equal, but by the time we get to 2014-15 and later, they ought to be much more equal.” Those payments will have to be levelled, like it or not, across the EU. The one good thing for British farmers is that we are somewhere in the middle of the payment table, between Estonia and Greece, so should not be affected too badly by some sort of levelling. If there is to be any form of common policy, the level of payment across Europe needs to be considered.

The CAP was started in 1962 by five member states to produce food after the war, and it was successful in producing food until the 1980s, when there was a lot of food in the world and Europe was subsidising it. When there was too much food in Europe, we put it on the developing world’s markets, destroying their markets. Something had to be done about that. We were subsiding Greek tobacco, for instance. One can argue about whether it is right or wrong to subsidise food and food production, but to use good taxpayers’ money to subsidise tobacco takes a little bit of working out, especially when one third of the tobacco grown in Greece was burnt in heaps on the ground, one third was reasonable quality and the other third was dumped on developing-world markets, leading to Zimbabwe and other countries having trouble with this dodgy tobacco.

We have to face up to the fact that it is no good producing food for the sake of it. The idea of CAP reforms was to move towards an environmental, land-based payment. That is being done to some degree. It is also useful from a world trade point of view, because payments are put into the so-called green box and are not directly linked to production, and so can technically be made to farmers without distorting the international market for food. That also means that we are not directly subsidising the number of cattle or the number of hectares—in real money, acres—of corn, and so on, to produce more food.

We have rightly moved in that direction, but as we move into 2012-13 and onwards, we should recognise that we are living in a different world. The Labour Government, slightly belatedly, worked out that there was a need for food and food production. I attended a Morrisons breakfast the other morning. We were talking about the affordability of food. There is no doubt—I do not level the charge at Morrisons in particular—that certain big buyers over the years have looked around the world to buy reasonably cheap food. However, now there are not vast amounts of cheap food to be had out in the world. China was eating 500,000 tonnes of beef 40 years ago, but is now eating 5 million tonnes of beef. The United Kingdom produced 1 million tonnes, but China is now eating five times the amount of beef that we produce. The beef produced in Brazil, Argentina and other countries that produce lots of beef is not necessarily finding its way on to our markets; it is finding its way into China. Therefore, food and raw material prices are higher.

Although the CAP must be greened, it also has to reflect the fact that we need food that is produced at an economic price that our consumers can afford. I am a farmer—I declare an interest—and farmers would like the prices that they are paid for food to be higher. Of course, consumers are having to pay more. We should ensure that enough of the money that the consumer pays the retailer for his or her food gets back into the producer’s—the farmer’s—pocket. Although that is not necessarily part of CAP greening, it is relevant to agriculture and farmers’ incomes.

[Huw Irranca-Davies]

The hon. Gentleman makes an important point about food prices. Does he agree that, although people always say that farmers receive subsidies, as if those are going straight into their back pocket, the truth is that in a lot of cases farm subsidies in recent decades have subsidised a cheap-food policy? Household expenditure on food has been falling for many decades, and that has reversed only recently.

[Neil Parish]

The hon. Gentleman makes an interesting point. The payments coming to farmers have encouraged them to produce food—in many ways quite rightly—and helped to keep the price of food down for the consumer. It is only now, in recent times, with 7 billion people and rising in the world, that more food has been needed, and its price is going up.

In recent times, the prices of fertiliser, fuel and all those inputs that are needed to produce food have doubled. Therefore, the key is to consider an agricultural policy that is not only green, but looks to ensure that food that can be produced sustainably, is supported. This point has been made many times before, but if we look at our upland and hill farming, why are our hills so green and pleasant? Because they are farmed, and because there is stock on those hills. We need to consider that in respect of the CAP, because again—I am probably a little bit more controversial than some in this regard—it is no good just making a general payment across all farmers in future; we must look at the way that those payments are made.

Does the East Anglian farmer on the fens, who can produce 4 or 5 tonnes of wheat per hectare, necessarily need the same payment as the farmer struggling on the hills? Is it not time that we found a way for the farmer in East Anglia, who could carry on producing good wheat, to trade his environmental payments with somebody farming on the hills? In Britain there is not a shortage of land used for conservation and agri-environment schemes; nearly two thirds of the land is in one scheme or another.

[Huw Irranca-Davies]

I attended the same breakfast as the hon. Gentleman; it was a good discussion. On the important point that he is making, is there a case for the Minister engaging in that? In respect of high levels of CAP payment, particularly to the large agri-industrialist arable farmers towards the top end, there may be a case to be made for ensuring that the additional money from taxpayers is used for increased innovation, research and development, and more targeted and accurate farming, so that the productivity, not just production levels, on such farms is massively increased as a result of using taxpayers’ money.

[Neil Parish]

The shadow Minister is exactly right, and he leads me down a path towards making a point on which not all will agree with me, which is that the one thing that is being denied to European and British farmers is biotechnology and science. No other industry in this country is hampered by not being able to use the best science. A blight-resistant potato used for starch production is in existence. Eventually, we will have a blight-resistant potato fit for human consumption; will we then deny ourselves the use of it? Many in the House are better historians than me, but was it not potato blight that caused the potato famine in Ireland? Solving the problem of having to spray potatoes 20 times a year—probably more this year, because of the terrible weather conditions—would be a great bonus. Similarly, as always promised, we might soon have nitrogen-enhancing wheats and oilseed rapes. Will Europe deny itself those, too?

As a Government, we need to be a little more proactive in discussing biotechnology. It is not for the Monsantos and Syngentas to promote it, but perhaps for our universities and others, so that we can tell people about the possible green bonus from crops that need to be sprayed less and that use less artificial fertiliser—all part of science and technology.

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[Kerry McCarthy (Bristol East) (Lab)]

As ever, it is a pleasure to serve under your chairmanship, Mr Chope. I want to focus on the concerns being raised by environmental organisations about this issue, and particularly on the views expressed by the Royal Society for the Protection of Birds, the Campaign to Protect Rural England, and the Wildlife and Countryside Link. It is important to note that although this matter is immensely important to our farmers, it is not only about them, as everyone should have a stake in the countryside, whether they own land, make money from it, work on it, or not.

[Huw Irranca-Davies]

May I commend my hon. Friend, Mr Chope, on introducing to the debate the concept of a one-nation CAP reform?

[Kerry McCarthy]

I thought for a moment that my hon. Friend was congratulating you, Mr Chope, on introducing that concept, and I wondered whether I had missed something. Yes—a one-nation CAP reform. That is our slogan for today.

If the concerns raised by environmental organisations are not addressed, there is a danger that the CAP, which has demonstrably made some progress over the past 20 years—albeit painfully and slowly at times—could, as part of a process intended to improve its environmental performance, perversely be taken backwards. I am glad to say that there is general agreement on the need to green the CAP, which I regard as absolutely necessary if we are to achieve three objectives: first, to support more long-term sustainable food production; secondly, to address the ever-increasing challenge of global food security; and, thirdly, to meet our environmental goals, which range from halting and reversing biodiversity declines by 2020, to meeting our climate change targets.

Greening of pillar one payments must happen and, at the same time, pillar two must be fully protected or ideally, increased. The added justification for those changes is, in the words of the RSPB’s evidence to the Committee’s inquiry, to

“legitimise expenditure of €300 billion over the next seven years.”

That is a huge sum of money. We know from yesterday’s debate on the EU budget just how much concern there is in this place, and among the wider public, about EU spending, of which the CAP is the largest single component. I agree with the Committee’s conclusion that it is a concern that greening may be seen by the Commission as a way of justifying the significant public expense of its policy on direct payments, rather than a way of delivering environmental improvements across the EU. I hope that the Minister will devote some time to that concern in his response.

There is also concern, as there is in relation to other areas of Government policy, that this could become an exercise in so-called greenwashing—greening in name, but not in outcome. Greening must be designed and implemented in a way that secures genuine environmental improvements at farm level and across all member states. There are worrying signals that the member states want to maintain the status quo but to repackage the status quo as green when it is clearly not. The Luxembourg paper contains some strong examples of that. The measures suggested by 16 member states in that working paper, published in April, are even worse in delivering environmental outcomes. In particular, the section on farmers who are “green by definition” has raised concerns. Arguing that a farm is automatically green just because a certain proportion of it is grass is nonsensical, as there is huge variation.

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[George Eustice]

That is right. The environmental stewardship schemes in pillar two are much more proactive about encouraging wildlife and improving biodiversity, whereas the problem with set-aside is that it becomes something that has to be done and everyone finds all sorts of ways around the rules so that, for instance, they can graze a particular type of goat on the land and get away with it. There is an issue with the bureaucratic system of set-aside.

My hon. Friend the Member for Tiverton and Honiton also alluded to the crop rotation requirement. Anyone who has been a farmer, as I once was, knows that crop rotation is a good thing. A farmer who farms without rotating their crops, particularly in the arable or vegetable sectors, will soon run into problems, such as crop disease, which causes a great deal more expense than any subsidy would have been worth. I question the value of insisting, in the latest proposals, that each farmholding must grow three crops. It proves that whoever came up with the idea is not a farmer; they are a bureaucrat. One could grow three brassicas—cabbage, oilseed rape and cauliflower—which would satisfy the three-crop rule, but the farmer would have clubroot disease in all those crops within two or three years.

I understand why some would regard the proposal to cap subsidies to individual farmholdings as superficially attractive; they think, “Why should we give a huge amount of money to very large farms?” However, no one has thought through the likely impact. Large farmholdings might break themselves into small farmholdings to get around the rules. There would be all sorts of avoidance problems, which would need a suite of anti-avoidance measures and people to ensure that farmers did not break up their holdings to circumvent the provisions. There would be major problems with that, so one must question what we are trying to achieve. If an objective of the CAP always has been and should be to promote food security and competitive farming, why would we want a policy designed to undermine the most productive and efficient farms in Europe and reward the least efficient? Although I understand why some would find the proposal superficially attractive, it is a mistake.

[Huw Irranca-Davies]

What are the hon. Gentleman’s thoughts on the proposal I floated earlier? Farms receiving the very high CAP payments are on the most productive land, but they need to be more productive because we face food security challenges. The very high CAP level should recognise additional investment in innovation, targeted farming, research and so on, so that it was based not purely on production volume, but on increased production.

[George Eustice]

That is an interesting proposal, which I would like to look at more closely. I have previously argued that we could develop a system in which environmental obligations became transferable in some regards. The lettuce grower on the Cambridgeshire fens, who has a model that getting the single farm payment is irrelevant to, might forgo the payment, which could instead go to a farmer on more marginal land in, let us say, Wales—I do not want to offend anyone with a Welsh background. Such schemes could therefore receive more investment.

A problem that we all recognise in the EU negotiating process, which I alluded to in my question to my hon. Friend the Member for Tiverton and Honiton, is that rather than going into negotiations saying, “What is the best possible agricultural policy we could design?” and “What is the optimum policy we could pursue?” we are always hamstrung by voices in DEFRA and the civil service that say, “You can’t do that because Denmark won’t agree. If you advance this idea France will reject it, and we will lose our allies in Poland and eastern Europe.” Everything about agricultural policy ends up being seen through the prism of an incredibly complicated 27-way negotiation, which frankly leads to a poverty of vision of what our agricultural policy could become. We instead plod along like a blinkered horse, trying to achieve what we can. It is all about the lowest common denominator, rather than genuinely successful and thoughtful policy. Pillar two is a classic case of that.

[Mr Dai Havard in the Chair]

In the last Parliament, our Committee, before I was on it, criticised the Labour Government for arguing that we should phase out pillar one and have pillar two only, because it was not achievable and undermined our negotiating position. If we do not even articulate what we believe because we are concerned that doing so will undermine our negotiating position, there is a problem.

I would like a much looser CAP in future: a common policy about common objectives. We could set common objectives for improving animal welfare, safeguarding the environment, enhancing biodiversity and promoting food security. There could be much looser policies and arrangements centrally and much more decision making and responsibility for implementation devolved to national Governments.

--- Later in debate ---

[George Eustice]

It might be, if we get to that point, but I do not want to be distracted by that now.

There is potential and it is not unrealistic, because that is the direction of the common fisheries policy. The Commission, under Commissioner Damanaki, is buying into ideas that will effectively lead to a partial repatriation —of sorts—of the management of individual waters and fisheries only to those groups of countries that share that fishing water. That is a sensible plan.

[Huw Irranca-Davies]

The hon. Gentleman has graciously given way. He tempted me in because I was the Minister who oversaw the instigation of that regionalisation of the common fisheries policy. It is a good approach, but it must be balanced against the imperative to achieve sustainability of fisheries in sea areas. In the same way, we are talking about the long-term sustainability of agriculture and getting more out from less in. There cannot simply be devolved management and let-loose chaos; it must be well planned and managed by individuals and organisations on the ground or on the seas.

[George Eustice]

I absolutely agree. In fisheries, the developments and techniques on maximum sustainable yield and how they are calculated and measured, with all their complexities, have come a long way. That should be the guiding philosophy of the common agricultural policy. The US has a statute that states that there cannot be overfishing beyond the maximum sustainable yield, and we could look at something like that at a European level. I accept what the hon. Gentleman says, but I am talking more about the implementation to deliver maximum sustainable yield in fisheries, how we could devolve management of that and how we could do the same for the common agricultural policy. We could set clear objectives to enhance animal welfare, biodiversity and environmental protection, but give individual countries much more scope to work out how best to achieve them.

I am interested in another area that has always struck me as a missed opportunity. The Committee took evidence on the natural environment White Paper proposals, which the Government launched soon after the election. Some of that evidence made it clear that putting a value on biodiversity and the natural environment was a powerful idea that had a great deal of potential. There were interesting proposals in the White Paper, but the big thing that held them back was the lack of funding to make them a reality and to make such a market a reality. A huge amount of money—the best part of 40% of the EU budget—is tied up in the common agricultural policy, but there is no really thoughtful, innovative policy in it. There are interesting ideas in the White Paper, but no money for them. Could we somehow marry the two and use some of that CAP money to make a reality of the natural environment White Paper?

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

Mr Havard, it is good to serve under your stewardship.

[Mr Dai Havard (in the Chair)]

I have been watching you.

[Huw Irranca-Davies]

I am glad. I need watching, Mr Havard. My thanks to your predecessor, who was here until a couple of minutes ago. You tried to throw me by changing chairmanship as I stood. It was a delight to serve under Mr Chope’s stewardship as well.

I welcome this debate. It is an excellent and timely chance to examine the Government’s approach in the EU negotiations, and to support and challenge it where necessary. I thoroughly commend the Environment, Food and Rural Affairs Committee, and its Chair, the hon. Member for Thirsk and Malton (Miss McIntosh), on their work. I had some lovely nights in my flat reading the Committee’s compendious volume. It was very good and had some excellent recommendations, to which the Government have responded; I read that response, too. The report has brought a good open and transparent debate to some of the key issues around the CAP, including the issue of greening the CAP, which we are debating.

I also commend the engagement of wider society in this debate—that is imperative—including the engagement, mentioned by several hon. Members, with domestic and international non-governmental organisations, farming bodies, farming leaders, farming unions, and farm workers. EU parliamentarians are playing an increasingly important role in this recent process of co-decision. The hon. Member for Thirsk and Malton urged MPs—and Ministers, I think—to, in her words, “snuggle up to MEPs”. We are indeed facing some cold winter evenings, so that might be something that we want to do, although it could lead to some racy headlines, particularly for a happily married man such as me.

The process was always going to be complex and all-consuming for those concerned with food security, domestic and international; competitiveness within the farming sector; and, of course—the focus of today’s debate—the wider environmental and public benefits that good reform can bring. There is the rub: good reform, not just any old reform.

The hon. Lady, who introduced the debate, rightly talked about the potential impacts of any delay to agreement on the multi-annual framework. That is an item that we have raised before. It would be good to get an update from the Minister on where he thinks the budgetary debates are going, because they could have an impact on CAP reform and forestall the changes that we are talking about. The hon. Lady also commented on the broad issue of achieving a level playing field, which we are always chasing. Today’s debate has flushed out not only the difficulty, but the absolute necessity, of achieving that, so that our farmers who strive for the highest standards of environmental gain and animal welfare are not at a disadvantage in so doing, compared with farmers in other EU nations. What struck me about the hon. Lady’s comments was that there is probably cross-party agreement that in the reforms we should be seeking a green and pleasant, but also productive and biodiverse land.

The hon. Member for Banff and Buchan (Dr Whiteford) pointed out that many farmers would not be viable without the support of the CAP, which tempted me to reiterate a comment that I made earlier this year: happy 50th birthday to the common agricultural policy! I do not think that many hon. Members will join me in saying that, but there is an element of truth in the statement that one of the unavoidable outcomes of the CAP over the past five decades has been an element of price stability and avoidance of price volatility. As we move towards a more competitive CAP with fewer barriers to trade that opens out internationally, the challenge will be different.

Successive Governments have made it clear that they need to move away from food production subsidy to more competitive farming and fewer trade barriers. Indeed, the hon. Lady spoke up extremely well for diversity within farming—a critical issue not only within CAP reform, but in wider domestic reforms that the Government are looking at. I entirely agree with her that we need to see the socio-economic importance of the diversity of farming. That will give us resilience, and it includes having smaller farmers alongside larger farmers, and highly productive land alongside less favoured areas. Diversity needs to be maintained and supported, not least for the public benefits that it brings.

Public benefits are not purely about the birds and the bees. I declare an interest as my wife keeps bees. They have done very well this year. I will discuss with the Minister later how they have done well, because it is to do with the preponderance of a particular non-native species in our area, which has kept them going in pollen this year.

[Mr Dai Havard (in the Chair)]

It has done a lot of other damage.

[Huw Irranca-Davies]

Indeed. The hon. Member for Tiverton and Honiton (Neil Parish) spoke with expertise, as always. He described how we got here with the CAP, and spoke about the diversity of approaches to payments in the UK. That will be a major factor for the Minister as he tries to steer a way forward. The hon. Member for Tiverton and Honiton also spoke of his worry that his infatuation with the CAP and farming meant that the men in white coats would soon be coming. I assume he is not referring to officers of the Animal Health and Veterinary Laboratories Agency. He also referred to the madness of some of the Commission’s proposals, so there seems to be a running theme in his contribution.

My hon. Friend the Member for Glasgow North East (Mr Bain) widened the debate significantly and spoke with a great deal of expertise about the increasing speculation in food markets by those who, frankly, have never set foot in a field or run a farm—other than a health farm, so that they could have their limbs massaged alongside their profit margins. There is a world of difference between commodity trading by farmers to enhance their profit margins and pure speculation, which my hon. Friend mentioned, which lines the pockets of traders to the complete disadvantage of not only farmers, but consumers, because it is undoubtedly having an effect on prices.

My hon. Friend also talked about the overriding priorities that we should be focusing on: food security, food price stability and removing trade barriers. Removing such barriers will help the competitiveness of our UK farmers and improve the viability of those in developing nations. It will help us to tackle the global food supply and shortage problems. He talked about innovation and the priorities affecting food supply chains, and their role in climate change, as well as the big social justice issues that we often miss when we talk about CAP reform. He also reminded us specifically of the market distortions of CAP, and their impact on developing nations in particular—the reason we are trying to change it and move away from it.

My hon. Friend the Member for Bristol East (Kerry McCarthy), with a little instigation from me, introduced the concept of one-nation CAP reform, for which I thank her. The basic premise is simple: CAP reform is not only to do with farmers. It is to do with wider public benefits, and taxpayers have a prominent stake in it, as do consumers, NGOs and farmers. It must be a subject that inspires debate beyond the agricultural or food-processing community and this Chamber. My hon. Friend called for genuine environmental benefits, not greenwashing. I am sure that the Minister heard her, and I hope that that call is also heard in the European Parliament. It is a valid concern and brings us back to my initial point: let us have good reform, not just any old reform. One Europe-wide organisation, BirdLife, said that the rather purist original Luxembourg proposals

“would signal the end of any legitimacy of EU direct payments to farmers”.

I think we all agree that we need to avoid that result at all costs and explain to people the wide variety of reasons why it is valid to put those funds back into farming, not least of which is the environmental and wider public benefits.

The hon. Member for Camborne and Redruth (George Eustice), the closing Back-Bench speaker after a wide range of contributions, raised the issue of green tape, as opposed to red tape, and complexity. I agree with him that we need to find ways of simplifying things. He engaged with the detail of proposals and interestingly discussed the cap on CAP payments. That raises the question, for me, of what additional benefits in public goods for the taxpayer can come from very high-level payments. They might take the form of increased productivity on the part of the largest recipients of CAP payments. There is an increasing necessity to explain to taxpayers, day by day, why their money is being used as it is. We can do that, but we need, with the Minister’s help, to explain why it is a good use of money, and what extra we get from it, as opposed to large volumes of production.

The hon. Member for Camborne and Redruth also dwelt on the potential for greater regional management and subsidiarity, which is the direction under the common fisheries policy; I think it is slightly ahead of the CAP in that respect. It took a fair deal of persuasion to get where we are on the CFP, and NGOs, alongside fisheries people, did a lot of good work to articulate the fact that the approach could work scientifically as well as commercially. I think we will win in that case, and I hope that the process continues. Perhaps, some time in the future, we can reach the point of much more ownership, regionally and locally, among the farming communities, NGOs and others, of how we take things forward. Sustainability underpins all that is happening, and the scientific evidence. The hon. Gentleman also introduced the interesting concept, which raised quizzical looks between me and the Minister, of transferable obligations. That strikes me as having some similarities with carbon trading, which has advantages, but also loopholes and disadvantages. The concept is interesting, and worthy of further consideration.

The UK has long been in the lead among the more progressive nations on CAP reform. I am thankful for the leadership shown under successive Governments, in successive negotiations, including by my right hon. Friend the Member for Leeds Central (Hilary Benn) when he was Secretary of State. At the forefront of like-minded and progressive nations, he advocated strong reform of the CAP, to bring about enduring benefits for farmers, consumers, taxpayers and the environment from bold, ambitious, green reform—good reform.

[Miss McIntosh]

I should take this opportunity to thank all the witnesses to the inquiry, which I did not do before. There is a long list, as the hon. Gentleman mentioned. On the point about negotiations under successive Governments, it is important to recognise that this is the first time that co-decision has rested with MEPs and the Council of Ministers. Like my hon. Friend the Member for Tiverton and Honiton (Neil Parish), I served in the European Parliament, for 10 years, and—this is a secret, so I know it will not go beyond this Chamber—for six months as a stagiaire with the Commission, so I have even more chance of being carried off by the boys and girls in white coats. I am concerned that we may we overlook this point: MEPs so often feel ignored and neglected, and among the 7,000 amendments there will be some sensible ones on which we can possibly do business. It is incumbent on us all to use whatever contacts we can, in the most platonic of ways.

[Huw Irranca-Davies]

The hon. Lady raises a strong point and is right. Although co-decision brings more challenges in negotiation, I welcome the fact that it is a great enhancement of democratic engagement beyond what has been referred to as the bureaucrats. It puts things into the hands of people who are democratically elected, and can speak up for their regions, including on international issues and trade. They can speak up for wildlife and farmers. We need to engage with and influence those individuals.

I was delighted that the head of the agriculture committee came to Westminster for a seminar, attended by various organisations, that brought us up to speed on the 7,000-odd amendments. He has his plate full, because he must work through the various Members who have tabled them and come up with his priorities, just as Ministers do. It is almost like adding a new but very democratic level to the previous tripartite arrangement. However, the hon. Lady is right that it gives an opportunity for a different means of influence. We should use that. Towards the end of the month, I shall be going out to meet European parliamentarians to discuss that very issue. I shall treat that as being as important as meeting the Commissioner.

We continue to believe that farmers should be supported by the Government for the public goods for which the market will not automatically reward them. As my hon. Friend the Member for Wakefield (Mary Creagh), the shadow Secretary of State for Environment, Food and Rural Affairs, has said:

“Labour wants CAP reform to encourage growth, a secure food supply and environmental benefits”.

As the Environment, Food and Rural Affairs Committee notes, those sometimes apparently contradictory aims can be difficult to reconcile, not least in the minutiae of EU negotiations, made more complex, as we have just heard, by democratic co-decision. However, we must reconcile them if we are to have good reform, not just any old reform—and especially not the old-style reform, which did not take us as far as we wanted. To do that we must have friends, and work with them, so I ask the Minister, as the hon. Member for Thirsk and Malton did, to update us on progress on the greening proposals of the more progressive, like-minded states—our friends, including the Danish and Swedish Ministers—and on the extent to which their influence is being felt among the clamour of competing voices, some of which may be arguing for a more retro approach to CAP reform, a “déjà vu all over again” approach of protectionism and old-style production subsidy. By the way, the accidental use of the imported term “déjà vu” in no way indicates any one specific nation that may advocate a less bold set of reforms.

[Mr Dai Havard (in the Chair)]

We will take note of that when we are dealing with French treaty discussions.

[Huw Irranca-Davies]

Among progressive reformers, there has long been a focus on delivering a smaller, greener CAP with a more competitive and productive farming sector, both in the UK and across the EU. Does the Minister agree that yesterday’s vote in Parliament on the question of seeking a real-terms reduction in the next multi-annual financial framework actively assists the Government in pursuing those aims? If so, perhaps he can explain why Ministers were whipped to oppose the motion. Surely yesterday we provided a clear assist to the Government, in strengthening their hand in negotiations on the overall budget, and ultimately in respect of bold CAP reform. We should not forget, with regard to greening and all other matters, that part of this long-advocated reform is intended to reduce the barriers of protectionism, not put more up. It is intended to liberalise trade, which I am sure is supported on both sides of the House.

As well as the need to increase the competitiveness and productivity of UK farming, there is a need to level the playing field across the EU. Let us not forget the need to reduce the trade barriers that disadvantage the poorest farmers in the developing world. We often talk about food security in domestic terms only, but it is also an issue for international trade and developing nations. We urgently need to support growth in agricultural production, especially in the developing world, to feed a rising and poor population.

Let me again commend the forensic work of the EFRA Committee, and then ask the Minister several specific questions on the greening elements of the CAP. First, on a consensual note, we are glad to see the Government continuing with Labour’s focus on a greener CAP, with a greater proportion spent on public goods. We note as well the Government’s commitment

“to a very significant reduction of direct support under Pillar 1 …and a CAP that moves away from market-distorting subsidies.”

We are also glad that the Government are focused on simplification. However, we share the EFRA Committee’s concerns that elements of the proposals, as currently understood, will indeed add to the complexity and the bureaucracy of delivering public goods, including environmental benefits.

The Government must continue to argue in the EU for flexibility for the UK to devise and implement greening measures, to build on what has been referred to in this debate as the great success of the past couple of decades—it is 25 years since we first introduced agri-environment schemes in the UK—and to further those environmental gains. We do not want to destroy our progress or duplicate, overcomplicate or add bureaucracy. One of the things that have not been emphasised as much as they should have been today is the fact that the EU needs to go further. Resting on our laurels, however comfortable, is not an option. Ambitious green reforms need an acknowledgement from Government and from farming leaders that there is more still to do.

I note the Government’s response to the Committee’s concerns, expressed in recommendation 8, about gold-plating greening, in which they restate their high level of ambition for greening across the EU. It is right that we should be ambitious about greening in the UK. Does the Minister agree that, despite all our progress in this area, we need to do more? We need to ensure that there is a level playing field, and that farmers in other nations are stepping up to the green mark, and not finding easy access to indirect payments that support production, thereby disadvantaging UK farmers who are doing the right thing.

The Commission’s impact assessment estimates a 15% increase in administrative burdens linked to direct payments. I hope that the Minister can tell us that he will not be returning to the UK at the end of the negotiations with additional costs and burdens for farmers. What can he tell us of his hopes to achieve simplification and lower costs, alongside the green reforms and public benefits? He understands the concerns about the crop diversification proposals, which, in the UK, could have negative consequences, whereas crop rotation could improve soil and water quality, and help climate change mitigation.

There needs to be flexibility in the ecological focus area proposals to reflect the diversity of UK farming. Perhaps we could use our imagination and modify further the proposal. One suggestion, which is already in play for the Minister, would assist farmers and the environment, and it ties in with ideas proposed by the hon. Member for Camborne and Redruth. It reduces the 7% devoted to EFA to 5% for farmers who are willing to work together to collaborate on projects such as wildlife corridors, and to co-ordinate on a spatial and regional basis to develop those things that help us with climate change adaptation. I have met with large-scale farmers, both out in the fields and here at Westminster, who are already working effectively together on environmental measures, and such an approach, I suspect, would appeal directly to them.

The permanent pasture proposals are in danger of failing to deliver the environmental benefits that they profess to seek.

[Neil Parish]

Not only is there a problem with permanent grass payments, but if we are not careful, farmers will plough up in advance grassland that they would not otherwise have ploughed up if it had not been for this ridiculous measure coming from the Commission.

[Huw Irranca-Davies]

Indeed. That is one of the many unintended consequences of devising a central system, which is why it is vital that we have the right flexibilities in place, so that we can sometimes work around this. We will support the Minister in any way that we can on this matter. I remember, at the 11th hour of a three-day CAP meeting, when we had come up with a final list of proposals, a great chap—I will not say what region he came from, to avoid the risk of embarrassing somebody—who had been involved in the negotiations from the fisheries side came up to me and said, “I cannot say this publicly, but well done, Minister. That is the best possible deal we could have had. I am now going to go away and see how we can work around it.” What we do not want is that sort of outcome. We do not want to come up with a complex list of things that people plan to work around. We would rather see the matter simplified. None the less, the hon. Gentleman makes a good point.

I mentioned the permanent pasture proposals. There is a world of difference between valuable permanent pasture that is not ploughed over regularly, which is home to semi-natural vegetation and great biodiversity, and pasture that is periodically cultivated and seeded. How does the Minister intend to negotiate the maximum public good from that proposal?

On exemptions, how does the Minister guard against the fear of double payments and maximise taxpayer benefit? Will he give us more details on the ways the Government will improve the competitiveness and productivity of UK farming while promoting further progress in greening and the achievement of wider public good? What specific measures are the Government working on now, regardless of CAP reform, that will allow both aims to be achieved simultaneously? We do not want the green food project, which has been quite well received, going the same way as the green deal in the Department of Energy and Climate Change, which has over-promised, is forecast to underachieve and is fundamentally flawed. The green food project needs to produce benefits and to bring together all the strands. I am sure that the Minister will be able to stand up and assure us that that is the case.

The Government have had some criticism from the EFRA Committee and others for the late introduction of proposals for a points system that would aid flexibility of the Commission’s proposals on a member state basis. I welcome the proposals, but wonder whether playing this card so late has diminished the chances of success in negotiations. May I also ask the Minister how, in promoting the laudable aim of achieving member state flexibility, we can guard against the use of such flexibility by some member states to dilute their greening imperatives? Does not that risk mean that the Commission will strictly have to constrain any flexibility, and what impact will that have on the Government’s ability to deliver for farmers in the UK while trying to guard against the dangers of flexibility among other EU nations? I notice that the Minister is chuckling, but he knows what I am talking about.

In short, flexibility at member state level is not just desirable but essential, but it cannot be allowed, in other nations, to add to the very real cost for UK farmers and consumers. It cannot be allowed to become a euphemism for an abdication of environmental responsibility.

The Minister has a lot on his plate, but if he tires, I am more than willing to step in and pick up where I left off. That would of course require this Government to step aside, so it may not be an option for the moment. Meanwhile, I genuinely wish him well in continuing negotiations on greening, and on all other aspects of CAP reform. Labour will support where we can, and we will challenge where we should, to achieve the outcome that is good for farmers, consumers, taxpayers and the environment—a smaller, greener CAP, and a more competitive and productive farming sector. I am talking about a one-nation approach to CAP reform where the many, not the few, gain.

[Mr Dai Havard (in the Chair)]

I call Mr David Heath to speak. He got a soundbite in as well.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)]

Thank you for calling me to speak, Mr Havard. I do not deal in soundbites; I deal in solid policy and solid negotiation. We will leave soundbites to the hon. Member for Ogmore (Huw Irranca-Davies).

It is a delight to serve under your chairmanship today, Mr Havard. I also want to say a big “thank you” to my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, first for committing her Committee to the report—the very compendious report—that it has produced, and secondly, for having the good sense to apply for the opportunity to debate it here in Westminster Hall today. It has been extremely useful for us to debate the report, not least because my official title is the Minister of State, Department for Environment, Food and Rural Affairs, so I am responsible for both agriculture and the environment, and it is nice to have a topic that clearly places both parts of my job description in the frame.

I am grateful to my hon. Friend for making it clear in her early remarks that we have these priorities of food security and climate change, and they are part of our background thinking in this sector. I am also grateful to her for drawing attention to the difficult weather conditions in the past few months, which unfortunately may continue, and to the need for certainty. Nothing would please me more than to say—through her to the farming communities, the people who are looking at this debate in terms of social policy and the people who are desperate to have answers to the environmental questions—that we have a degree of certainty, but the reality is that we do not. The negotiations that we are involved in are still very much in play and I will try to give the House the benefit of our experience, to say where we are and what our objectives are. However, I am afraid that what I will not be able to do, with any degree of certainty, is to say where we shall end up, because there is still an awful lot to play for.

I start by making it clear that the Government are very much in agreement with the majority of the EFRA Committee’s findings and with the conclusions in its report; that was also very clear in the formal Government response to the Committee’s report. If I may paraphrase, the Committee’s two key conclusions are that the UK’s existing agri-environmental schemes should not be undermined by greening, and that greening should be applied in a simple, flexible way that recognises local circumstances. As I say, we could not agree more with the Committee on either of those aspects. May I say how much I value the agri-environmental schemes that we have in this country? It is not being complacent to say that they are of a very high standard and that in many ways we achieve a higher level of outcome than many other EU member states.

Of course, I would always like us to do better and there are ways in which we can continually improve, not least by recruiting more people to higher-level stewardship schemes, but I will not say anything other than that we do a pretty good job at designing those schemes and we have done so for some time. The hon. Member for Ogmore said “Happy 50th birthday” to the common agricultural policy. I am not sure that that many people will be lighting candles in support of that contention, but I hope that more people might like to have a small celebration at the 25th anniversary of the groundbreaking agri-environmental schemes in England. I want to make it plain that we want to preserve and extend that legacy for future generations.

[Huw Irranca-Davies]

In light of the earlier comments by various hon. Members today, does the Minister agree that the success of the HLS schemes—albeit they might need to be tweaked again as time goes by—and the welcoming of that success is a result of DEFRA officials being out there on the farms, in the fields, with people, fine-tuning the schemes until the eleventh hour to get them right? Actually, the success of those schemes gives us a lesson about the need for there to be as much subsidiarity as possible within the CAP reform greening proposals. They need to be worked in the UK, for the benefit of UK farmers and the UK public.

--- Later in debate ---

[Mr Heath]

I am happy to give my hon. Friend a letter. Again—I am not trying to avoid the question—there may be some uncertainties at the moment, as we are discussing transition, a key issue, with the Commission. It is giving us all sorts of potential headaches in the administration of schemes. We have a limited time horizon, and we simply do not know at what point new arrangements will kick in and what those new arrangements will be. Until we know that, it is difficult to make longer-term plans. However, I will happily write to her and set that out if it is helpful.

[Huw Irranca-Davies]

I get the hon. Lady’s point. What we need clarity on—I understand if the Minister cannot give it today—is where the cut-off point is and at what point in the process it occurs. We need that clarity so that we and he can encourage farmers to keep signing up for existing schemes without fear that they will lose out.

[Mr Heath]

The hon. Gentleman has grasped that we need to understand from the Commission what will and will not be acceptable. We need to know how we can make a satisfactory transition. I assure him and my hon. Friend that my intentions are to maintain that continuity in a way that is fair to everybody. I am not resiling from the difficulties; I am simply saying that we are trying to find ways of ensuring that that is the case.

--- Later in debate ---

[Mr Heath]

It is certainly an awful lot better than the pronunciation of the hon. Lady’s constituency from the hon. Member for Ogmore, so I would not worry too much, Mr Havard.

The hon. Lady is right. To be absolutely clear, one of the big bones of contention in the negotiations is that we think the Commission’s direction of travel on the issue is precisely wrong, and we have to push very hard back the other way. One of my drivers for that—I am sure my counterpart in Scotland feels the same way—is that I simply want to ensure that we can implement the CAP effectively and efficiently when it is introduced. I do not want the Rural Payments Agency in England to go back to the dark days of a few years ago, when it was incapable of doing the job set for it because it was insufficiently well equipped to meet the complexities. I want to ensure that on the day when the arrangements are implemented, whatever they may be, we can deal with them. That means a long implementation time and simplicity in the construction and design of what is proposed.

[Huw Irranca-Davies]

Will the Minister return to the point that I raised about the Commission’s impact assessment suggesting that the proposals would add about 50% to the costs? He can extrapolate from that to complexity and bureaucracy as well. Is it his intention that the final outcome of the negotiations will entail no increase in complexity or costs to farmers, or will he accept some complexity if that is the only way to finalise negotiations?

[Mr Heath]

There are all sorts of competing interests. The hon. Member for Bristol East (Kerry McCarthy) is keen to ensure that member states cannot simply slide away from the commitments that they make. It is difficult to answer on what the final outcome will be. We are clear about our objectives, which are to simplify the proposals dramatically to achieve the environmental objectives, but with enough flexibility to ensure that we do not engage in complications that would jeopardise some of the things that we have in this country. We certainly do not want to increase costs. At the moment, I can give no assurance to the hon. Gentleman about the result of the negotiations. All I can give him an assurance of is our best endeavours toward that end.

[Huw Irranca-Davies]

I seek the Minister’s graciousness in giving way again only to highlight the fact that his answer sounds remarkably like the answer that the Opposition gave when we were in government, which was, “We would love to have no increase in regulation, but there just might be some, because that might be where we end up.” We took a lot of flak when we were in government over regulation and gold-plating. Sometimes there is good regulation as well.

[Mr Heath]

There is, but it must achieve the right objectives, and our concern about some of the proposals is that they increase the complexity and the regulation and do not achieve the beneficial effects. That seems axiomatically wrong, and I think the hon. Gentleman is agreeing with me.

[Huw Irranca-Davies]

Absolutely.

--- Later in debate ---

[Mr Heath]

Precisely so. Time and again people pay lip service to a “very good idea” but somehow it then does not apply to their own circumstances. We have to be wary of that and not fall into the same trap.

If we are to go down a route of some form of greening by definition—to which there is some advantage, in reducing complexity and allowing for easier systems—it has to be on the basis of something that shows the environmental benefit. I would argue, for instance, that our stewardship schemes do that. We could demonstrate beyond anyone’s reasonable doubt that our environmental schemes show a clear commitment to environmental benefits on the land within their compass. If we extend the self-definition too far, however, we get to the point at which simply having a hedge is sufficient qualification to be a greened farm. That is not an adequate definition.

Other member states share our view that this is basically the right direction for the CAP to be moving in, but that the Commission’s proposals are too blunt, too inflexible and too complex in their implementation. We have heard a few examples of that. The hon. Member for Banff and Buchan talked about the definition of “active farmer,” and my hon. Friend the Member for Tiverton and Honiton (Neil Parish) pointed out that quite a lot of Scotland is not farmed as intensively as most parts of England because of the nature of the ground. Yes, that is true, but the Scots have a case with, for instance, grazed heather, and we are helping to press that case strongly in the negotiations on behalf of the Scottish Government, with whom we have very close contacts, as we do with the other devolved Administrations.

With tenants, there is a question of who is the active farmer. It is far more important to identify the activity, rather than the status, of the person doing the farming. I hope we can move in that direction. I have already mentioned hill farming, and in the negotiations we have to be alive to the interests of less favoured areas. I said as much when I was in Cumbria recently and, not surprisingly, I received a measure of support, but we have to be conscious of the fact that there are many different types of farming, and we need to have something that, as far as possible, can accommodate those differences.

The hon. Member for Ogmore and others mentioned capping—I am sorry, but I cannot remember who provided the response. With the proposals on capping and young farmers, for instance, it is all too easy for lawyers simply to adjust the holding to fit the policy, rather than change what is happening. I am wary of that. I want to maintain the incentives, the competitiveness and all the rest. Although I can sometimes see the advantages of such proposals, I do not want the nominal ownership of an enterprise to be changed simply to create a money stream that would not otherwise be there, because that is not in the interests of efficient farming or the objectives that we have set.

[Huw Irranca-Davies]

I urge the Minister to keep his mind open, because the larger arable farmers would argue that they are already the most productive, that they invest the most in innovation and that they collaborate the most extensively. On that basis, they should be the most susceptible to an argument that, for the largest payments in the country, they should easily be able to prove that they are adding value, not purely on acreage or hectarage, but in the productivity and innovation of their farms. I urge him not to close his mind, because that is a sharp and intelligent argument for the good use of CAP payments.

[Mr Heath]

I never close my mind to anything. I am always open to a discussion, but the hon. Gentleman’s proposal is not that different—if, indeed, it is different at all—from something that the Commission proposed right at the start of the negotiations.

There are difficulties, but I am happy to have further discussions with the hon. Gentleman, because I never rule out proposals until I can see clearly that they are not in the wider interest. In return, I ask him to consider the potentially significant problems with artificially fragmenting landholdings or artificially transferring titles, which are not helpful things to encourage.

If there is a consensus among member states, it is that greening is too complex an issue on which to rush to agreement. I have already indicated that, in setting out the timetable, there are still wide differences in approach, and few support the proposals as they stand. It seems to me that there is still a lot of work to be done, and the negotiations need to continue. The one thing in the Select Committee’s report that I would take slight issue with is the implied criticism that Ministers and DEFRA have not been as active as we might be in Brussels on greening. I simply do not recognise that in the case of my right hon. Friends the Members for Meriden (Mrs Spelman) and for South East Cambridgeshire (Sir James Paice), who are the predecessors of the Secretary of State and me. They were very active in Brussels on CAP reform in general and on greening in particular. The Secretary of State and I are taking that forward and engaging at all levels. We are working with the Commission, the European Parliament and other member states.

My hon. Friend the Member for Thirsk and Malton enjoined me to cuddle up to MEPs. I do not know about cuddling up, but I do have conversations.

--- Later in debate ---

[Mr Dai Havard (in the Chair)]

I am not sure where “snuggling” and “cuddling” fit in the lexicon of Hansard.

[Huw Irranca-Davies]

The Minister should put on record to whom he was snuggling up.

[Mr Heath]

An eminent member of the European Parliament’s agriculture and rural development committee, whom I hope can advance our cause. It is important that we keep in contact because of the co-decision process that has changed the way such things move forward. It is important that we understand what is being talked about in the European Parliament, what the positions that are being adopted look like and whether we can, at the earliest stage, influence the way that those positions develop and where coalitions form to ensure that, as far as possible, our interests are served not only in the Council but in the Parliament, because ultimately we need to persuade both of what we want. Greening is on the agenda for pretty much everything that we do in Brussels on CAP reform at both ministerial and official level.

We are also working with stakeholder organisations on greening, because it is important to hear what they have to say. My message today is that achieving the right outcome will not be easy, and I am not going to pretend that it is. There are so many viewpoints to accommodate across the EU, and there is always a risk that we may not fully agree with every element of a wide-ranging package of measures. I find it reassuring that there is no discernible fundamental difference between the Select Committee and the Government on greening, but in some ways it is even more reassuring that there is no discernible difference in attitude between all the Members who have spoken in this debate and the Government or between the parties. We are clear on what the British position needs to be; the question is whether we can persuade others to adopt a similar position.

I am coming to the end of my contribution, but I want to mention agri-science, which was raised by my hon. Friend the Member for Tiverton and Honiton. In a way, agri-science is only tangentially relevant, but in another way it is fundamental. If we are talking about food security and measures that could benefit the environment within a context of higher food production, we have to embrace the best technologies to make that happen. I do not say that lightly—sometimes we have to adopt clear precautionary principles when we embrace new technologies—but the agri-science consultation launched by my Department and the Department for Business, Innovation and Skills, which has responsibility for science and technology, is important. Finding ways to get the research community and higher education properly engaged in those areas will be crucial to finding solutions in the long run.

My hon. Friend mentioned blight-resistant potatoes. I went to a research laboratory a few weeks ago and spoke to the only man in Britain who was really pleased about potato blight. That is perhaps being unkind to him, but he was researching blight-resistant potatoes and told me, “Look, everyone’s got potato blight this year—and we haven’t! I have a crop that has been shown to be resistant to potato blight.” There are things that can be done. It is not just about genetic modification or novel foods; we need to be engaged with, and make progress on, a range of areas.

Not only do we owe it to people in this country to make sure that we persist with the sustainability of our agriculture, but we owe it to people in other countries who will be facing much bigger difficulties—something mentioned by the hon. Member for Glasgow North East (Mr Bain). There are people across the world who need to be fed, and they will find it more and more difficult as the effects of climate change are realised. We are in a unique position because of what we can achieve with the quality of our research and technology. Our skills will provide some of the solutions to the questions that will increasingly be asked. I want this country to be in that position, I want the European Union to be in that position, and I hope that it is axiomatic to what we are discussing.

This has been a fascinating and positive debate. I hope I have been able to cover most of the issues raised and to indicate where we stand. At the moment, this is an incomplete and difficult negotiation. I will not be able to be certain about the outcome until the point at which we have an agreement, first on the budget and then on the CAP. However, I assure hon. Members, and the Committee in particular, that the concerns they have expressed are very much at the heart of our negotiating position. Dealing with those concerns is precisely what we are attempting to do as Ministers engaged in those discussions.

Badger Cull

Huw Irranca-Davies Excerpts

Thursday 25th October 2012 Commons Chamber

[Andrew George (St Ives) (LD)]

It is always a pleasure to follow the hon. Member for North East Somerset (Jacob Rees-Mogg), but I would like to return to a point that the hon. Member for Thirsk and Malton (Miss McIntosh) made at the start of our discussion: that the debate can easily become polarised between “team badger” and “team farmer”, when what we need is “team science” and “team TB” and to address the issue much more calmly and rationally, because outside the Chamber there has been much light as well as a certain amount of heat.

I should like to emphasise from a constituency point of view and from my farming background the need fully to understand what is driving the issue and the disease’s emotional and financial impact over decades on very committed people in west Cornwall. Many Members have this afternoon conveyed the emotions that are felt from the impact of this devastating disease.

I strongly supported the RBCT in my constituency, which involved a proactive cull on the Penrith moors, and faced down the very strong campaign against the line I was taking just over a decade ago in support of the trials because I believe in sound science being the basis by which we take forward policy to bear down on TB. In a climate where the science might encourage legislators to prevaricate, to recognise dilemmas and perhaps to see only the need for further research and not to take action, the Government should ensure that they do not make the situation worse. We say that policy making must be evidence based, but as the Government former chief scientist, Lord Robert May, said in The Observer just a couple of weeks ago, the Government risk transmuting evidence-based policy into policy-based evidence.

There are a number of knowns in the science, one of which I put to the Secretary of State at DEFRA questions today—that some of the figures from the RBCT have been exaggerated or cherry picked to justify the policy. For example, there is the argument that TB in culling areas was reduced by 30%. The research itself showed a reduction of somewhere between 12% and 16% in the net impact. Overall, this resulted in reducing only the increase in TB infection.

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

Does the hon. Gentleman agree that two of the other knowns are the recent breakthrough in the DIVA test, which could lead to it being put forward for licensing, and a 60% efficacious BCG vaccine for cattle, which could also lead to licensing, although it would require the Government to negotiate with the European Union for field trials within the UK?

[Andrew George]

There are certainly significant gathered knowns now that were not available 10 or 15 years ago. To go forward, we need to build a policy on a sound foundation—not simply on selective evidence.

In his summing up, I hope that the Minister will deal with the evidence in support of the Government’s policy. Will he recognise that the 12% to 16% reduction in incidence of infection for herds within culled areas in the randomised badger culling trial is not an absolute reduction, but a net reduction, which means only that the incidence is increasing at a lower level than it would have been without the cull. It would be helpful and reassuring if the Government were to acknowledge that.

Let us use the opportunity provided by the pause to go back and speak to the many scientists who are still saying that the Government have got this one wrong. Instead of having a war of words through the media, let us make sure that those scientists—the majority behind the ISG—are brought in. I believe that they should be involved.

Finally, I hope that the Government will accept that we should go to Europe, as was implied by the hon. Member for North East Somerset and, indeed, by the hon. Member for Ogmore (Huw Irranca-Davies) in his intervention. These matters are not, after all, pre-ordained by God; these are decisions taken by human beings in Europe. We need to take a strong case to Europe in order to sort out the regulations and advance the testing of the vaccine and the DIVA test. That should allow us to come to a solution that is generally workable and does not make the situation worse.

Agricultural Wages Board

Huw Irranca-Davies Excerpts

Tuesday 16th October 2012 Westminster Hall

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)]

On a point of order, Mr Caton. I am sorry to interrupt the hon. Gentleman so early in his speech. Just for the convenience of the House, I think that it is important to note that I have released a written ministerial statement on this subject today, opening a consultation. That being the case, and given that the statement cannot be released until 9.30 am and hon. Members will obviously be in Westminster Hall today and unable to get to the Library to see a copy, I have arranged for them to have a copy of the written ministerial statement. I can provide further copies if other Members have need of one.

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

Further to that point of order, Mr Caton. I also apologise for interrupting my hon. Friend the Member for Copeland (Mr Reed) so early in his speech. I welcome the fact that the Minister has made that statement at the beginning of proceedings today; I am literally reading the written ministerial statement as we begin, having just been handed it by him. It is welcome; we have been waiting for it for some time. However, welcome as it is, I want to ask the Minister a question. The announcement on the consultation is the fundamental part of today’s written ministerial statement, but when was that announcement originally due to be made?

[Mr Heath]

We were planning to make that announcement today; it is coincidental that this debate was called for today. However, that being the case, I thought that it was very important that all Members had full possession of the facts, rather than debating in the dark, as it were.

[Huw Irranca-Davies]

Further to that point of order, Mr Caton. I will not delay proceedings any more than I need to. I apologise again for interrupting my hon. Friend the Member for Copeland. My understanding is that the announcement on this consultation was first talked about last spring, running into the summer, under the Minister’s predecessor, the right hon. Member for South East Cambridgeshire (Sir James Paice). So, welcome as the announcement is on whatever date we are today—

--- Later in debate ---

[Mr Reed]

Such excitement so early on. I think that it can only be the new working hours unsettling us all. However, there will be ample time to discuss all the issues that Members wish to raise.

The Agricultural Wages Board, in one form or another, has provided good wages, good working conditions and good lives to farm workers since 1924. Before I continue, I must thank the Minister for providing early sight of the written ministerial statement today, before we began proceedings. I appreciate that courtesy.

I want to touch on three issues in my speech today. First, the AWB allows farmers to focus on farming. They do not have to be employment specialists and they have no need to negotiate with their work force over pay and conditions. Secondly, the AWB is the most effective way of ensuring that regional part-time, young and even full-time employees in the farming industry are not exploited. Without the protection of the board, they will be vulnerable to lower pay and worse conditions. Thirdly and finally, the AWB is so much more than a body for setting wages and conditions. On one level, it ensures that a shepherd has the funds to look after their most valuable asset, which of course is sheepdogs; that tenant farmers have secure homes to live in; that farm workers have good overtime and night work rates, fair stand-by allowances and sick pay; and that agricultural workers of all types are provided with suitable bereavement leave and holiday entitlements.

The Government’s planned abolition of the AWB puts all of that at risk. I welcome the appointment of the hon. Member for Somerton and Frome (Mr Heath) to his new post of farming Minister. I hope that he can bring an appreciation of the farming industry and its workers to this Government. In my view, that appreciation has been significantly lacking for too long.

This is not the first time that the Tories have attempted to abolish the AWB. Baroness Thatcher attempted to abolish it, but she changed her mind when she realised that it was a vital organisation for farmers and farm workers. Sadly and in some ways inexplicably, when I look at the Minister, this Government are proposing to abolish an organisation that even Margaret did not want to abolish.

[Huw Irranca-Davies]

I remind my hon. Friend that the very arguments that I suspect many people in Westminster Hall today will be deploying in defence of the AWB are the same arguments that persuaded Margaret Thatcher not to abolish it, and that were made by her own Back Benchers at the time.

[Mr Reed]

I thank my hon. Friend for that intervention. It is absolutely the case that there was overwhelming opposition to the proposal of the then Thatcher Government to abolish the AWB. Thankfully, the arguments against abolishing the AWB were listened to then, and common sense prevailed. Sadly, like much of what this Government are trying to achieve, whether that is the dismantling of the NHS or the destruction of local government, the abolition of the AWB is unfinished Thatcherite business, as my hon. Friend has just implied.

In a report for the Low Pay Commission in December 2011, Incomes Data Services argued that

“the agricultural sector is distinct from other sectors in that it is comprised of small employment units but with the additional feature of seasonal or casual workers”.

The AWB may indeed be an anomaly in our economy, but the agricultural sector is so different from other sectors of our economy that it is a necessary anomaly. Small farmers, who make up the majority of the industry, do not have the time, the expertise or, frankly, the funds to negotiate with their workers time and time again in what is an increasingly pressurised working environment.

The standards of pay and conditions set by the AWB enable farmers to focus on running their businesses and producing the products that we all need—increasingly so, as this year’s poor harvest demonstrates in many ways. In abolishing the AWB, the Government are not freeing farms from unnecessary bureaucracy. Instead, they are making the lives of small farmers more difficult and creating an even more bureaucratic working environment than the one that currently exists. That is the last thing that small farmers could possibly need. Instead of having to deal only with the AWB, in the future farmers will need to work with myriad different organisations, each one governing a different area of employment regulation and each, in turn, exposing every small farm business to new and different liabilities and complexities.

In their report calling for the retention of the AWB, the Welsh Government correctly noted that if the board is abolished

“pay bargaining would become instantly fragmented”.

It is important to note that, although the leadership of the National Farmers Union backs the abolition of the Agricultural Wages Board, it might not, on this occasion, be speaking for every small farmer in England, or Britain—it is certainly not speaking for those in Wales. I greatly respect the NFU and its leadership, and have very good relationships with NFU leaders in my constituency who, for the most part, skilfully, adeptly and effectively represent their members’ interests, but I think that they have got it wrong on this one.

The farming union of Wales, the young farmers of Wales and many small farmers across the UK want to retain the Agricultural Wages Board. The Government claim to be on the side of farmers, but on this issue they are making farmers’ lives much more difficult, making their businesses much harder to run, and doing the exact opposite of what the Government should be doing—at all times but particularly in these straitened times—which is supporting our nation’s farmers and making it easier for their businesses to survive and grow.

The situation profoundly affects my constituency and my home county. Across the north of England there are 28,180 agricultural workers, with 12,260 in the north-west, 3,300 in Cumbria—my home county—and almost 600 in my constituency. Copeland is the constituency that is most dependent on public spending in England. It is also the English constituency that is hardest to reach from Westminster—yes, there is a link—and more than 50% of the local economy is based on public spending.

Throughout my time in this House, I have sought to rebalance my local economy through the growth of our local private sector, but it is difficult to do that, and is becoming more so. At a time when the majority of public spending cuts are yet to bite—perhaps the Minister could tell us if he supports the additional £10 billion cuts that the Chancellor has announced—and when the budgets and services of local authorities in my area are being decimated, the removal of a body that helps small businesses to do business and maintains minimum workplace standards and minimal rates of pay surely cannot be right. This is a detached policy, from an increasingly detached Government.

--- Later in debate ---

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

I am surprised you called me so early, Mr Caton. I expected to wait a bit.

We are in the American election season, and listening to my hon. Friend the Member for Copeland (Mr Reed) reminded me of what Ronald Reagan said to Jimmy Carter in 1980: “There you go again.” The one thing I have learned since coming to the House is that the Government seem to think that there are simplistic solutions to complex problems. With the most complex problems, it sounds nice to say, “We are cutting red tape by getting rid of the Agricultural Wages Board.” But the problem seems much more complex than that.

I have read this morning’s written ministerial statement, which states that with the introduction of the minimum wage, the Agricultural Wages Board is now obsolete. Again, that is a bit simplistic considering what the Agricultural Wages Board does. Twenty per cent of people are only 2p above the minimum wage. If the Agricultural Wages Board and the setting of wages are abolished, wages might be driven down, rather than up. That means people in the countryside, including farm workers, would be earning less.

I also worry because many of the 12,000 agricultural workers in Wales are of school age, working through their summer holidays. As my hon. Friend says, they are seasonal. They are not entitled to the minimum wage. What is going to happen to them? Are they going to be exploited from an early age?

The other thing I am deeply concerned about is that farmers have it hard. Let us be straight about that. Farming is not easy. It is tough out there. We cannot give farmers the further burden of having to negotiate with staff individually on things such as dog allowances for shepherds, which will go with abolition, and statutory sick pay. I fear that not only are those farmers too small to negotiate, but that this is another extra burden that they do not need. There could be different employment rights in different regions. In some places there might be a good level of statutory sick pay; in others there might not. Some people might have more rights than others.

[Huw Irranca-Davies]

I want to pick up on the points raised by the hon. Member for St Ives (Andrew George) on the transfer of the AWB’s functions to some other organisation. The Low Pay Commission observed, on the abolition of the AWB:

“The level of sick pay will be significantly less than provided for under the Order.”

Unless the Minister stands up and says that all the functions will be transferred to some other organisation to retain the protections, we have failed to do what the hon. Member for St Ives said, which is to protect agricultural workers.

[Chris Evans]

That is interesting. My hon. Friend will know of Hazel Spencer’s letter to the shadow ministerial team for the Department for Environment, Food and Rural Affairs:

“I have been in horticulture for nearly 25 years, working for the same nursery since 1987. During this time, as you can imagine, I have seen many changes. The work is sometimes hard, sometimes repetitive and often carried out in less-than-pleasant conditions.

I initially started as part-time staff, at a time when we had very little right to sick pay, holiday pay and certainly no Bank Holiday pay. Over the years and mainly due to the negotiations carried out by the AWB on behalf of us ordinary workers, conditions within our industry have improved. We have received wages in alignment with those recommended by the AWB: SSP has been supplemented by Agricultural Workers Sick Pay, to bring it in line with a weekly wage during illness, and we received a tax allowance towards providing suitable clothing to cope with the conditions of our workplace.

Basically, what sustains most of the people who work in this industry is the fact that we are earning a fair day’s pay for what we do.”

My concern is that we are asking small farmers to become employment specialists of some sort. Are they going to go to solicitors? Are they going to make mistakes? Are we going to see more people before tribunals? Those are real concerns that the Minister has to address.

If I might be mischievous for a moment, I draw attention to an early-day motion signed by the Minister in 2000 that called for the then Labour Government to

“retain the Agricultural Wages Board as it is currently constituted.”

Does he still think that should be the case?

Ultimately, everyone in the Farmers Union of Wales is opposed to the abolition of the AWB. They are concerned that the removal of the AWB will leave farmers exposed when having to negotiate pay and conditions. The AWB is a very good model that could be used by employers and unions across the board. The model has worked since 1924, and the Attlee Government established the AWB in 1945. Again, as often with the current Government, all we see is a drive for cuts in mythical red tape.

I say this whenever we talk about employees’ rights: happy workers are the best workers. The real issue that has to be addressed in society, whether in the countryside or in the urban world of banking and finance, is fear of job insecurity, which is the thing most people worry about. When employment rights are taken away, people are less secure, less productive and do not perform as they should.

I know we are going through a consultation process, but if the Government do not put something in place, we will start to drive wages to the bottom. Yes, as the written ministerial statement highlights, farming has massive opportunities because of the growing world population, but those opportunities will only be fulfilled with productive workers.

--- Later in debate ---

[Huw Irranca-Davies]

There is one other part of the AWB jigsaw puzzle that has not been mentioned yet. I am sure my hon. Friend is aware of upland farmers in his area; many small farmers use the provisions of the AWB when they tender their services to other farms. The AWB provides set agreements and set rates without individual negotiation; everyone knows the code and the agreement. Without the AWB there will be many individual, complex and time-consuming negotiations and a lot of additional bureaucracy. That is why we want to preserve the functions of the AWB.

[Chris Evans]

Quite simply, a lot of my farmers will not bother with it. The practice will end because they will not be interested in getting down to the nitty-gritty of the code. There is a code in place.

I wonder what the Minister’s thoughts were when he signed that EDM 12 years ago, and what has changed. There is no argument for abolishing the AWB as it stands: it works for farmers and for workers, too. When he responds to the debate, I hope he will tell us what was going through his mind when he signed the EDM all those years ago, and what has changed significantly in the past 12 years to make him change his mind. I look forward to that.

--- Later in debate ---

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

I thank my hon. Friend the Member for Copeland (Mr Reed) for securing and introducing the debate. He opened with such an erudite analysis of why the AWB and its functions have been so important over a long period and continue to be important, not least against the backdrop of declining economic activity throughout the country and in rural areas. The issue is indeed to do with the protections afforded not only on pay but on conditions, such as bereavement and all the things mentioned by my hon. Friends. It is also to do with ensuring that we have a good supply of keen, enthusiastic and well-skilled people coming into the industry in future. I shall return to such points because I do not agree with what was said in the written ministerial statement, although we thoroughly welcome it, and I appreciate the courtesy of receiving it before the debate started.

As I looked through the statement, I noted:

“The functions of the Agricultural Wages Committees are now largely redundant”.

I shall return to the comments made by the hon. Member for Strangford (Jim Shannon), who made a good contribution, but the points made by my hon. Friends make it clear that it is far from a settled issue that such functions are redundant. I will go through some of those arguments in detail.

I ask the Government and the new Minister in post, who has this opportunity, to think again about the abolition of the AWB. I ask him to do so because it is not without precedent for this Government to think again. Uniquely, it would be the first time that the Government have thought again in October. In every other month, we have had thinking again and U-turns, so the Minister could make a bit of history today by being the first Minister, although new in post, to think again in the month of October.

DEFRA has done much thinking again on many countryside and coastal issues. We have had U-turns on proposals to destroy buzzards’ nests to protect pheasant shoots, on pasty taxes—thanks to nationwide outrage led by the good people of Cornwall and the south-west—and on the great forestry sell-off of 285,000 hectares of state-owned woodland. We have had a partial U-turn on proposals to close coastguard centres and, unfortunately, a U-turn the wrong way on circus animals, dropping the previous commitment to a ban down to a commitment to new licensing conditions.

I do not want to be exhaustive, but my argument to the Minister is that he could think again because doing so is not unprecedented. We have had tax U-turns on caravans, video games and charitable donations, and other policy U-turns—some welcome, some not—on housing benefit, the mobility parts of the disability living allowance, financial inclusion fund debt advisers, the chief coroner, the military covenant, softer sentencing discounts, strike fighters, Ofsted inspections, school sports, rape anonymity and free school milk. I am dizzy from thinking about the number of U-turns.

In November last year, given opposition to the Government’s proposals, there was a U-turn on the decision to scrap the Youth Justice Board as part of the bonfire of the quangos. Suddenly, that bonfire had one less log on it. I ask the Minister to leave the fire burning brightly without the little log of the AWB as well—it will crackle nicely without it. The Minister can—independently, with independence of mind, new in his ministerial position—make his mark, a welcome mark, by performing one little pirouette of a U-turn on the AWB, a graceful and elegant pirouette. We would applaud his skill and his general loveliness. Other U-turns have been clunky and begrudging. Let the Minister, new to the role, manoeuvre artfully and delicately about-face.

I am not asking the Minister to do something that he does not want to do. In his heart of hearts, he is on the side of farm labourers and smaller farmers, and he has many in his constituency. Does he know how many agricultural workers in his constituency may be affected by the proposals to abolish the AWB? Of course he does. According to Library statistics, there are 1,020. Does he know that that puts him into the elite club of constituencies in the UK with more than 1,000 agricultural workers, many of them low paid and subject to the provisions and protections that we have talked about today? Of course he knows that. The figures are even starker when comparing the number of agricultural workers with the overall population in areas such as the south-west, where there are nearly 23,500 agricultural workers. His constituency might be hit hardest by abolition of the AWB, which may affect 152,000 workers in England and Wales.

I am convinced that the Minister wants a U-turn for his constituents, small farmers and farm workers. Before he attempts that pirouette, I will helpfully warm him up by reminding him why the AWB is so important. This is not, as he may later want to persuade us, just a matter of minimum pay. That would wilfully misconstrue the nature and purpose of the AWB, which is so much more. The Agricultural Wages Board involves

“representatives of farmers and agricultural workers together with independents, negotiating legally enforceable minimum wages and conditions which are significantly superior to those set by the National Minimum Wage and Working Time Regulations”.

The quote continues:

“the Agricultural Wages Board also sets a series of rates of pay to reflect the varying qualifications and experience of farm workers, thus providing a visible career structure for recruits going into agricultural work and is used as a benchmark for other rural employment… average earnings in rural areas are considerably lower than in urban areas… any weakening of the Agricultural Wages Board or its abolition would further impoverish the rural working class, exacerbating social deprivation and the undesirable indicators associated with social exclusion”.

I could not agree more. Those fine words are from early-day motion 892 in 1999-2000, to which the Minister was a signatory. What, I wonder, has changed since then?

During our early and youthful days in Parliament, we all had foolish fancies—we would not be human if we had not—and we would prefer not to be reminded about some of them. However, we also had strong and unwavering beliefs, and I know that the Minister has such beliefs, to which he stays constant. We deviate from such principles at our mortal peril. The Minister should stay true to his course and abide by the pledge he rightly made in that early-day motion. It was not a foolish fancy; it was his principles in writing. He said that the AWB provides a

“visible career structure…a benchmark for other rural employment”

and that abolition would result in “social deprivation” and “social exclusion”.

The Minister was right then, and we are right now, so he should return to the right side of the argument. The AWB streamlines and simplifies decision making for small farmers, so avoiding the time-wasting and complexities of drawn-out negotiations with individual farm workers one by one. Its abolition will increase bureaucracy for small farmers. Furthermore, as was said earlier, some small farmers market their own skills to others in a straightforward way with pay and conditions set and agreed by the AWB. They do not have to hammer out deals at each and every turn. I thought that the Government wanted to make things easier for businesses, especially small businesses, in which case they should keep the AWB.

The Minister may, as his predecessor did, pray in aid the National Farmers Union, for which I, like other hon. Members here, have a great deal of time. It does a sterling job in trying to synthesise a wide variety of views on a wide variety of issues. The manager of a large agri-industrial concern farming 10,000 or 20,000 acres may have slightly different motivations and needs than those of a small upland hill farmer on a couple of hundred acres. I declare an interest because 40% of my constituency is upland hill farmland, and I have family who are upland hill farmers. However, I am not speaking just for them; I am speaking for young farmers.

The Welsh Assembly Government had a cracking debate last week that was supported not just by the Farmers Union of Wales, but by young farmers of Wales who are worried that abolition of the AWB will hamper their access into the industry. Through this debate, I ask the NFU whether it is really saying that none of its farmers, not even tenant farmers, smaller farmers and those who want entry to farming want the AWB to be retained?

I will not go through all the reasons why the AWB is so important. They have been brilliantly articulated by my hon. Friends the Members for Copeland, for Islwyn (Chris Evans), and for Rutherglen and Hamilton West (Tom Greatrex), and have been made in previous debates by me and others.

I turn briefly to some of the messages from the Low Pay Commission. Its factual observation is that minimum rates will not cover pay for skilled workers. There is no statutory minimum wage for workers under the age of 16, and there is concern about the overtime premium, the night premium and the on-call allowance. It notes that holiday entitlement will be reduced if the AWB is abolished and that sick pay will be significantly less. It also notes that the number of days of bereavement leave will not be specified and that there will be no statutory right for such time off to be paid. Rest breaks will be less favourable for adult workers, and so on. There will be no statutory entitlement to a birth and adoption grant. Piece rates will be lower. At the moment, they are at least the minimum hourly rate of pay applicable to the grade. What is a fair rate, if it is not what is currently being paid under the AWB?

Northern Ireland and Scotland will retain AWBs. The hon. Member for Strangford said that he has his ear to the ground. I say with conviviality and friendliness that the problem of having an ear to the ground means hearing lots of different things. I have my ear to the ground in different places throughout the UK, and farmers have told me that they treasure retention of the AWB and/or its functions. The hon. Member for St Ives (Andrew George) is not in his place, but he made a valid observation: if not the AWB, what? The Minister should answer that, because the issue is not just the minimum wage aspect, but the protection of a broad range of functions.

I say in all honesty that most farmers are absolutely well-intentioned towards their employees. Most want to do the right thing, and they want skilled people in the industry. They want to ensure good rewards, because they realise that farm labouring is back-breaking work. It has the highest mortality rate of any industrial sector in the UK, and sickness levels are high, so workers need protection. The hon. Member for Strangford says that he has his ear to the ground, but he opposes the position in Northern Ireland, so if not the AWB, what will protect those workers?

[Jim Shannon]

We have heard about having an ear to the ground and hearing many stories, but my responses on this issue have been clear. The AWB is unnecessary and does not provide the support that it should to workers. The hon. Gentleman is right in saying that farmers are interested in their workers and want to do the best for them, which they do. I tried to reflect, in my contribution, that that is what the people are saying, and that is what the majority of elected representatives in the Northern Ireland Assembly are saying. Unfortunately, although the majority of people want the AWB removed, under the partnership Government, the Minister can overrule us. That does not reflect the opinion of all those in Northern Ireland, which is the point I am trying to make.

[Huw Irranca-Davies]

I fully appreciate that point.

In all debates on this matter, I have striven, in my position as a shadow Minister, to speak not only for England, but for other parts of the UK in which what is happening with the AWB is mirrored or contradicted. I want to ask the Minister how negotiations are going with Wales. How are they progressing, or not progressing? The Welsh Assembly Government, the Farmers Union of Wales, the young farmers of Wales, Unite the Union, GMB and others have lined up alongside individual farmers to demand the retention of the AWB’s functions in Wales. To that effect, an excellent debate, which I mentioned earlier, was held last week, spearheaded by Mick Antoniw, the Assembly Member for Pontypridd, who is a brilliant advocate for all workers, including agricultural workers. The only dissenting voice in the whole of that debate was not a Liberal Democrat or a Plaid Cymru Member; it was a Conservative, who had been sent out as a token to speak against the retention of the AWB’s functions in Wales.

[Mr Reed]

Will my hon. Friend venture to suggest why no Conservative Member is present for the debate this morning?

[Huw Irranca-Davies]

I genuinely cannot. We have heard the hon. Member for St Ives and the Minister will speak for the Government. The contribution made by the hon. Member for Strangford is welcome, as we should be having that sort of debate, but the complete absence of any Conservative voice strikes me as staggering. Even if Conservative Members wanted to argue against our position, they should come and do so. However, perhaps low-paid agricultural workers somehow disappear below the radar. When we have had debates in Westminster Hall on the common agricultural policy, these Benches have been full of Members from all parties. Here, we are speaking about low-paid agricultural workers, but in the absence of any Conservatives to defend themselves, I will hold back my comments.

Will the Minister update us directly on discussions with the Welsh Assembly Government? I ask him because rumours have been circulating all summer that the discussions are in deadlock and have been like that for some time, and that DEFRA was perhaps attempting to refuse to respect the current constitutional settlement for Wales. Worse still, it has been suggested that the UK Government—the Government of whom he is a Minister—will try to undermine the Welsh Assembly by seeking to circumvent the constitutional settlement and the need for consent, and that they would try to devise a way to avoid the necessity of full and frank engagement with democratically elected Welsh Government Ministers.

This is a technical matter of legislative competence, but it is also a matter of respect for the Welsh Government and for the people of Wales. Let me explain to the Minister why I firmly believe that that must be the case. The proposal to abolish the AWB is made under section 1 of the Public Bodies Act 2011. Section 9 of that Act requires the consent of the National Assembly for Wales when exercising the power under section 1 on any matter that would fall within the legislative competence of the Welsh Assembly. The Welsh Government can therefore choose to retain an agricultural wages board for Wales if they consider that such a decision would benefit the agricultural industry in Wales, in accordance with their devolved responsibilities under schedule 7 of the Government of Wales Act 2006. That screams out to me that the Welsh Assembly Government must be a full party to this process and that there should be no attempt to find some parliamentary procedure or back-corridor operation to circumvent full and frank discussion on the impact of the AWB’s abolition in Wales.

The view of Wales—the Welsh people and the Welsh farming community—is clear, and it needs to be debated and voted on. The Welsh Government must have their consent sought. That final point is vital in terms of respect for the Welsh Assembly Government and the National Assembly for Wales, and with it, I close my remarks. I hope that the Minister will assure us that what I have described is not happening and that the wider functions of the Agricultural Wages Board, beyond simply low-pay protection, will be protected in whatever thoughts and proposals he brings forward.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)]

It is a pleasure to serve under your chairmanship, Mr Caton. I express my genuine gratitude to the hon. Member for Copeland (Mr Reed); as it turns out, it is useful and timely to be having this debate today.

From the start, I should say that I entirely understand hon. Members’ concerns. It would be odd if I did not, and that is not just because of what the hon. Member for Ogmore (Huw Irranca-Davies) described as my general loveliness. I have represented, grown up and lived in one of the most rural parts of the country for a long time. I know that this issue is not only totemic for a lot of people but important to get right for a lot of people who work in agriculture.

Before coming to the more detailed points of my speech, I want to say first that I have introduced the consultation today because I am convinced that the proposals are in the interests of people who work in the agricultural industry. We simply cannot look at agriculture today through the eyes of somebody in 1948, or indeed, of someone 20 years ago. Agriculture has changed massively, and for the better, in many respects. It is a highly skilled industry in which people have to adapt to new ways of working all the time. I genuinely believe that the present set-up, which is unique in this particular area of employment, is grounded in times when agriculture and social conditions were very different. Most important, employment law was very different too, which we have to keep reminding ourselves. As a House, we have made huge changes to employment law over recent years, which has transformed the landscape in which we approach such discussions.

[Huw Irranca-Davies]

I acknowledge the Minister’s good intentions in speaking for his constituents and the farming community, and I accept that employment law has changed. However, we are currently faced with new proposals for changing employment law, including watered-down versions of the Beecroft proposals on hiring and firing, under which people can buy shares in companies in exchange for giving away their employment rights. Does it not worry the Minister, as a Liberal Democrat, that the employment rights that have been put in place over the last 20 years are now being denuded at the same time that we look to abolish the Agricultural Wages Board?

[Mr Heath]

The hon. Gentleman will not tempt me into commenting on other Departments’ areas of responsibility. I am dealing with what falls within my ministerial responsibilities, and as I have indicated to hon. Members, we gave a commitment to consult on the board’s future. The written ministerial statement that I have issued today, and made sure that Members had before them, informs the House of the launch of the public consultation on the abolition of the Agricultural Wages Board for England and Wales, as well as the related 15 regional agricultural wages committees and 16 regional agricultural dwelling house advisory committees in England. The hon. Member for Ogmore picked up on the fact that my written ministerial statement describes the agricultural wages committees as “now largely redundant”. It does so because they are now largely redundant. I hope that he will look carefully at exactly what they do.

The point that underlies all this is that, in the absence of the Agricultural Wages Board, agricultural workers will be protected by the national minimum wage and working time regulations. I accept entirely what hon. Members have said—that that is not the sum total of the Agricultural Wages Board regime. It is not simply a safety net underneath the least well-paid workers. I shall come on to the other aspects, but that is certainly an important part of why it was set up in the first place. It was set up at a time when people working in rural areas were the least well-paid of the least well-paid and had very few protections. It was right, at the time, to give that protection. The question is whether it is still right to have that arrangement in this unique sector of employment when in other areas it has been abolished.

The hon. Member for Copeland talked about Baroness Thatcher’s Government removing a raft of wages boards, and that is correct—they did remove them—but surely he is not suggesting that that was necessarily a bad thing. I am not trying to reduce this debate to the absurd, because I know that there are genuine and important issues, but did he think that the Aerated Waters Wages Council, the Coffin Furniture and Cerement-making Wages Council, the Flax and Hemp Wages Council or the Ostrich and Fancy Feather and the Artificial Flower Wages Council really had a place in the 1990s?

--- Later in debate ---

[Mr Heath]

The job of Ministers when responding to a consultation is to listen to all the voices that are raised, to try to understand the points that are put forward and then to make a decision on whether to introduce appropriate legislation. It is then for the House to decide whether it supports that legislation, so let us be clear about the process. It cannot have come as any great surprise that we were going to go ahead with the consultation. Indeed, the hon. Member for Ogmore chided me gently for not having brought it forward earlier. I say to him that I would have brought it forward slightly earlier if there had not been a recess, but we are now ready to consult and ready to listen.

An impact assessment of the abolition of the Agricultural Wages Board has been published as part of the consultation package. I hope that hon. Members will take the opportunity to consider it carefully and to comment on the document and provide their own evidence on the likely impact for both individuals and the industry as a whole. The impact assessment suggests that abolition of the Agricultural Wages Board could lead to increased employment, which would have potential ripple-effect benefits for the wider rural economy.

Let me deal with some of the specific issues that were raised. A lot of hon. Members were understandably concerned that the proposal might mean workers losing their existing rights. Of course, that is not the case. Anyone in permanent employment will be protected by their contract. They will have exactly the same rights after the day on which the legislation is passed as they had before. They do not lose any of their contractual rights and the employer loses none of their contractual obligations simply by the passage of the measure. Of course, it would apply to new entrants and new contracts being negotiated, but it would not apply to anyone who was already in employment. It is very important that people understand that. Let us also recognise that permanent workers constitute about two thirds of agricultural workers, so for the vast majority of workers, there will be no change in terms and conditions as a result of the board’s abolition.

For new contracts, yes, I accept that there may be an impact. That is reflected in the estimates in the impact assessment. However, it is difficult to assess what that impact will be until we see it in action. My feeling is that there is a high level of competition for skilled workers in some sectors of the agricultural industry, and it is important that people attract workers who have both the necessary certification and the necessary skills, given that they are operating, as one hon. Member said, incredibly expensive bits of machinery, let alone dealing with livestock, which requires husbandry skills. It is important that people attract and retain the best workers. Therefore, I am clear that we shall not see a drift towards the national minimum wage in contracts in the agricultural industry. In addition, new entrants to the industry will have exactly the same levels of employment protection as workers in all other sectors of the economy.

In fact, there are potentially some direct benefits from abolition of the rigid structures of the Agricultural Wages Board, let alone the bureaucracy, in terms of what is permitted under contract. One example involves annual salaries. It is extraordinary that at the moment it is difficult to provide an annual salary basis for a contract under the rather rigid systems in place. In today’s employment market and particularly because I am optimistic about agriculture—we have a growing sector and there is huge potential in agriculture—farmers need to offer attractive remuneration packages that are competitive with those in other rural sectors if they want to retain skilled and well-qualified staff. I would be very surprised if employers did not recognise that they had to pay appropriately for skills and experience. That is already reflected, of course, in the banding in the Agricultural Wages Board system. The majority are paid above agricultural minimum wage rates. In 2010, about half of workers were paid more than 10p above the agricultural minimum wage. I do not see any reason why that should change in the absence of the board.

Of course, there are other protections as well. The gangmasters licensing legislation is both relevant and important in this debate. The hon. Member for Copeland talked about the Agricultural Wages Board specifically providing protection for migrant and seasonal workers, but he will find that it is the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 that provide such protection—passed by a Government that he, of course, supported. I recall supporting those regulations too. They will continue to provide protection, and it is important to know that that is the case.

[Huw Irranca-Davies]

I thank the Minister for reminding us of that fantastic piece of legislation. Will he comment on the future of piece-rate workers should the ABW be abolished?

[Mr Heath]

I am not sure I recognise that abolition of the Agricultural Wages Board will necessarily affect those workers. The hon. Gentleman is right to raise the issue and we will look at it closely in the consultation. Let us look at it in more depth and when we come forward with legislation, we will consider whether we need to look at it further.

We know that the agricultural work force are an ageing population, and that is not sustainable in the long run. I want to attract young people into farming, agriculture and horticulture. There are signs that more people are taking up courses at agricultural colleges, which is a good thing. We want to attract and retain new entrants—young workers—and to do that, farms must offer wages and conditions competitive with other sectors.

The hon. Member for Ogmore made an important point: most farmers and farming employers are good employers and want to do the best for their workers. Let us get away from the slightly Dickensian view that the only purpose of an employer is to grind down the workers. That is not the case and not the relationship that he and I see every day when we talk to people in farm businesses and those engaged in the sector.

What will happen to advice for farmers if the Agricultural Wages Board is abolished? The NFU has already indicated that it intends to provide economic indicators, which I hope will help.

I am not sure that I entirely accept the point about contractors, which I think was made by the hon. Member for Rutherglen and Hamilton West (Tom Greatrex). People subcontract their work in lots of other businesses and industries without experiencing the difficulties that the hon. Gentleman anticipates. It has been said that such arrangements will simply stop. I do not believe that is the case, because I do not believe that agriculture works that way. People will find an appropriate level for such employment, as they do in the building industry and other industries where plant and specialist skills are often needed by contractors on a wider front. We will find ways of accomplishing the same objective without the bureaucracy involved.

I stress that we will specifically instruct the Low Pay Commission to include the agricultural sector in its range of indicators. If we go ahead with abolition, it will watch closely to ensure that we do not see a detriment at the lowest end of workers’ pay and conditions.

The board is the last remaining wages council. Does it serve a useful purpose? The hon. Member for Strangford (Jim Shannon) says, with his knowledge of what happens in Northern Ireland, that it does not. I have looked carefully at the issue, and provided that we have other protections, which we do, across all sectors, it is difficult to argue that there should be a lone system for the agricultural sector providing separate minimum employment terms and conditions.

The regime is overly complicated at the moment. Its provisions are wide-ranging and restrictive, hampering the ability of the industry to offer modem, flexible employment packages. It effectively dissuades employers from offering annual salaries, which is disadvantageous for workers as it hinders long-term financial planning. It is a one-size-fits-all approach that imposes a rigid structure on a diverse and diverging industry.

If we lose the Agricultural Wages Board and the agricultural minimum wage regime, farmers will be able to agree terms and conditions with workers that fit particular circumstances and take account of the specific requirements of the farming sector. It would make it easier for farm businesses to employ workers, encourage longer-term employment, boost growth and create job opportunities. It would also simplify employment law.

An issue that has not been raised in the debate is the confusion for farm businesses around whether activities fall within the national minimum wage regime or the agricultural minimum wage regime. For example, livestock and poultry rearing would normally be considered agricultural activities and covered by the agricultural wages order, but that is not necessarily the case for slaughtering operations. In farm packing businesses, the agricultural wages order covers the packing of produce grown on the farm, but not the packing of bought-in produce. There are strange anomalies at the boundaries of what is and is not covered.

[Huw Irranca-Davies]

Before time runs out, I should like to say that I have not met a small farmer—certainly not in Wales—who has been confused by the current functioning of the AWB.

Will the Minister address a point of real significance? Under Section (9)(7) of the Public Bodies Act 2011 consent is required from the Welsh Assembly Government. Alun Davies, the Agricultural Minister, made a brief statement on social media this morning:

“Welsh Govt are determined to maintain the AWB structures in Wales. We have not consented to any abolition in Wales”.

I ask the Minister directly: will he commit now not to abolish the AWB and the functions of the AWB in Wales without the consent of Welsh Ministers?

[Mr Heath]

I work closely with Welsh Ministers and I am always happy to do so. I share information with them; for instance, before the event, I shared the fact that we were bringing forward the written ministerial statement and the consultation process. I had the advantage of meeting Alun Davies only yesterday to discuss the matter, and I will continue to discuss with him and the Welsh Assembly Government what they have in mind. I will not go into the constitutional issues, because they are outside the scope of today’s debate.

It is clear that the matter is not a devolved one at the moment. The hon. Member for Ogmore looks askance—agriculture is devolved, but wage control is not. However, that does not stop us having a perfectly sensible dialogue with Welsh colleagues on the subject or stop them having a dialogue with the Wales Office on the constitutional issues. He says that we are obliged to use the 2011 Act, but we are not. There is a range of different legislative processes that we could use. He was firmly against the Act, so it would be strange if he now insisted that it is the only way that we can reform public bodies.

[Huw Irranca-Davies]

rose—

[Mr Heath]

We are running out of time. I will continue dialogue with the Welsh Government to find a way forward. I am clear that it is perfectly proper for us to consult as we are doing on the abolition of the Agricultural Wages Board for England and Wales. We shall listen to the responses, including those from the Welsh, and will take appropriate action when it comes to legislation.

I again thank the hon. Member for Copeland for initiating the debate. We will return to the subject. I hope that hon. Members will take advantage of the opportunity to express their views in the consultation, as many outside the House will. It is a serious issue and I want to get it right for the prosperity of all who work in the agricultural industry, with a view to reducing unnecessary regulation, without reducing necessary protections.

Dairy Industry

Huw Irranca-Davies Excerpts

Thursday 13th September 2012 Westminster Hall

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

This has been a tremendous debate. If my arithmetic is correct and I include the Front-Bench speakers, we will have had 26 contributions, plus interventions. That is quite something. We have heard from all parts of the Chamber, and there has been a large degree of consensus on the way forward, on how to learn the lessons not only from this summer but from where we have been before, especially at the producer end, and on how to reach a long-term solution. I thank all Members for that, especially my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) and the hon. Member for Tiverton and Honiton (Neil Parish) who introduced this debate.

I want to say something that no one has said so far—milk is a fantastic and delicious product. I know that from having three boys who are all mad keen on rugby and football. It is their after-training drink, so it is not only delicious but nutritious. Perhaps we should resurrect that old saying, “Drink a pint of milk a day.” We should also find an equivalent saying for yoghurt, cheese and all the manufactured products that we should be producing in the UK as well.

[Mr Cash]

I raise my glass because it did have milk in it until I was told by the policeman outside that I could not bring it in. Downstairs in the cafeteria, a small glass of milk costs 70p.

[Huw Irranca-Davies]

Perhaps the Administration Committee will look at the rules and allow us to bring in good UK products. I thank, too, the Select Committee for its recent and long-standing work. The detail and forensic analysis that it has applied to the subject will be of help to us and to the Minister. I welcome the new Minister to his position and tell him that we want to work with the Government to strengthen future policies. I hope that he will be open to some of our suggestions.

This is a welcome opportunity to debate the industry, especially after our dairy farming sector—I apologise to hon. Members for saying this in the Chamber—took on a slightly French flavour. We had protests, blockades and threats of direct action that were not carried through. The hon. Member for Brecon and Radnorshire (Roger Williams) said that the former Agriculture Minister fronted up a very heated session in the Methodist hall, which he did. He did what a Farming Minister should do, which is to front up the debate and earn his salary. It was an immensely difficult and confrontational meeting, but he earned his stripes. Although not everything he said was welcome, he really earned his salary that day and, as a Minister, he did the right thing—he did not hide.

We now have a very good chance to examine not only what has been going wrong, but more importantly what can be done to resolve the situation. In fact, I returned this morning from a meeting with farmers just outside Corby. That is no coincidence; people will probably know that we have a tremendous Labour candidate there, Andy Sawford, who was with me today. We were out meeting people, but we discussed in detail some of the issues that arose from the dairy crisis and the long-term solutions that are needed for the future.

I have already welcomed the new Minister to his portfolio, but I also pay tribute to his predecessor, the right hon. Member for South East Cambridgeshire (Mr Paice). He and I did not agree on everything. If we had, not only would he be a Conservative but I would be a Conservative, or perhaps a Liberal Democrat—I am not sure. I regard him as a very decent man who wanted to do the right thing for agriculture. Reshuffles are a brutal affair, and his successor, the new Minister, will want to strive to avoid any dairy crisis in the future, as we all do, and we will try to work with him to prevent another crisis.

Let me put on the record some of Labour’s bottom lines. We want a fair deal for farmers, food manufacturers and retailers, but we should not forget consumers. We want a fair deal for them, too—a point made by the hon. Member for Thirsk and Malton (Miss McIntosh), the Chairman of the Environment, Food and Rural Affairs Committee, in her contribution to the debate. We want a competitive and equitable supply chain that delivers not only profitability all along that supply chain, but affordability for the shopper. That is not a lot to ask, although sometimes this summer it seemed like a huge task to achieve. To that end, we welcome wholeheartedly the dairy coalition’s 10-point plan. We want the consultation on the EU dairy package to be carried out this autumn without fail, so that producer organisations can gain formal recognition.

It is perhaps not surprising for a party that was born from one parent within the co-operative movement that Labour wants to see more producer-based organisation within the dairy sector. However, that is not simply about strengthening bargaining power—bargaining power has been referred to repeatedly today—or seeing some new imbalance that might be to the detriment of the consumer. It is vital not only that farmers can balance power in the supply chain, which is not in equilibrium, but that dairy producers come together, transfer right up the value chain by investing in food production, as well as food processing, and develop higher-value products for both the domestic and export markets. We should not forget the export market, although it has not had much attention today.

[Andrew Griffiths]

The hon. Gentleman speaks about the proud tradition of his party and its relationship with the co-operative movement. Will he today speak out and condemn the Co-op supermarket’s inability to pay a fair price to their farmers?

[Huw Irranca-Davies]

I do not know whether the hon. Gentleman is trying to make this debate party political; I am trying not to do so. Let me again put on record something that I have already said publicly and to the media repeatedly: I condemn all those retailers and milk processors that are squeezing the price down. I condemned them, and I have named them to shame them.

The retail sector and the milk processors have taken a heck of a kicking this summer, and they have taken a heck of a kicking today. The hon. Gentleman will have noted that I have already made the point—I am sure that the Minister will make the same one—that we do not want to turn this situation around completely, whereby the consumer loses out because we have strengthened another part of the supply chain and its bargaining power so much that the poor old shopper walks into shops and is fleeced for a different reason entirely. What we want is a fair and equitable supply chain. So, yes—in answer to the hon. Gentleman—I will speak out against anybody that is abusing the supply chain, because what we want is a healthy, thriving and open supply chain that is competitive but that has some form of co-operation, because it is in the interests of UK plc that we have a strong supply chain and not an imbalanced one, whereby somebody is badly hurt. At present, the farmers and producers are being hurt very badly.

[Susan Elan Jones (Clwyd South) (Lab)]

My hon. Friend has spoken a great deal about fairness and equity in this industry. Although I think that we would all welcome the voluntary code, I am reliably informed by certain farmers in the Ceiriog valley that there is a chance that it might not work and that if it does not work Her Majesty’s Government here in Westminster should carefully bear in mind the words of the relevant Minister in the Welsh Government, who said that we might have to take statutory action.

[Huw Irranca-Davies]

Indeed. I will return to that important point shortly; the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) raised it earlier, too. It is absolutely right that the Welsh Government are already considering what will happen if the code does not work. I will raise the point with the Minister, too, because we need to ensure that a discussion takes place across the UK about having an approach that, if it is not universal, respects both devolution and the fact that we need to work on behalf of all our farmers—not only farmers in the Principality, but right across the nation.

I say to farmers who may be tempted to pause for breath because they think that the summer storm is now passing that they should not do so. I say to them, “Organise yourselves; invest in producer organisations and in the value of the raw product, and do it now. And keep the pressure on us as parliamentarians and on the Government to deliver, as the groceries code adjudicator comes to the House.”

One of the last acts of the former Minister was to sign off on a voluntary code for best practice between milk processors and suppliers. That was good, and the code has been broadly welcomed. However, as night follows day, or in this case—please excuse my pun—as knighthood followed that day, the announcement was welcomed but with some caution. The chairman of the National Farmers Union, Peter Kendall, said that although the announcement

“gave some hope for the long term, it did not solve the dairy farming issues of today”.

So we must keep up the pressure to ensure that those processors that are not paying a fair price announce—as we have heard today—that they are rescinding their former announcements. Peter Kendall went on to say:

“This agreement will give us the architecture we need to make sure that we don’t end up with the same dysfunctional markets that are responsible for the dairy crisis we have today”.

We now have the architecture there in front of us, as long as we can make it work.

Let me make it absolutely clear that Labour supports the voluntary agreement if it can be made to work and once the legal niceties have been ironed out, but we also seek assurances from the Minister that the Government do not rule out additional measures, including legislation, should they prove necessary.

We are not alone in seeking that assurance, as the Minister has already heard today. Conservative parliamentarians—including the hon. Members for Bridgwater and West Somerset (Mr Liddell-Grainger), for Burton (Andrew Griffiths) and for Tiverton and Honiton, who have spoken in this debate, and many others who have spoken elsewhere—have queued up to express caution. As I was saying to my hon. Friend the Member for Dunfermline and West Fife a moment ago, that does not sound like the party of regulatory bonfires. This must be one of those good bits of regulation that some people talk about, while others jeer at the very idea.

I will express one word of caution to the Minister, to urge him not to rush headlong down the Stalinist end of the spectrum of views on this issue. Such views have been expressed by the hon. Member for Bridgwater and West Somerset, who has stated:

“There is no way it”—

the voluntary code—

“is going to work—it is just another rather sad red herring—it has been tried I don’t know how many times and it is always a disaster”.

He says that the code, which the Government support, is “nowhere near sufficient” and that Parliament needs to set a minimum price for

“a strategic resource like milk.”

I urge the new Minister to avoid capitulating to the old, central, statist control-and-command tendency in the Conservative party—next thing he will be arguing for a price set at a European level. Give the voluntary agreement some time to work, but as those in the less red-in-tooth-and-claw tendency of the rural Conservative party argue, keep the legislation ready to hand in case it is needed. Alternatively, as the Minister’s own Liberal Democrat party president, the hon. Member for Westmorland and Lonsdale (Tim Farron), has said, although the voluntary code is fine for now, the Government must

“commit to back that up with legislation if needed.”

That point has been made consistently today by many MPs from all parties.

[Daniel Kawczynski]

I am grateful to the hon. Gentleman for giving way, as he is running out of time, but I hope that he will not finish speaking without giving an up-to-date explanation of the Labour party’s views on a limited cull of badgers, following the decision of the courts.

[Huw Irranca-Davies]

I will try, but I might well run out of time. We need another debate, and following that decision, I suspect that we will have one on that matter in the near future. I will try to get to the issue. I want to draw on some of the points that have already been raised.

I seek assurance from the Minister that he will keep the voluntary agreement under extremely close scrutiny, that he will report back to Parliament on its operation with genuine urgency and that legislation is being kept as an option. I assume that he will be open—more open, in fact, than his predecessor—to the suggestion that the groceries code adjudicator should be given a few more teeth than the Government seemed willing to countenance formerly. In fact, I am confident that he will want to do an about-turn, because he is rightly an openly professed friend to good sense, to farmers, to a healthy and prosperous supply chain and, by default, to the position that is being expanded upon today. There is cross-party consensus; let me explain.

The new Minister, not without some background or expertise in the farming and food sector, including in dairy production, is on record as saying that he favours

“an ombudsman with teeth, who can deal with the iniquities of the food supply chain”—[Official Report, 20 January 2009; Vol. 486, c. 165WH.]

He said that the sooner that was established the better. We note the phrase “with teeth”, to which I will return in future debates.

Today, we particularly note the reference to the food supply chain. In 2009, the Minister said, with wisdom and foresight, that we need

“a sustainable price that allows our producers to get a return on their investment in milk”.—[Official Report, 18 June 2009; Vol. 494, c. 501.]

He also talked about

“a regulator who will be able to regulate the whole supply chain effectively, and ensure that the relationships are fair and transparent”.—[Official Report, 20 January 2009; Vol. 486, c. 165WH.]

That refers not to a limited part of the supply chain, such as a direct link between retailers and suppliers, but to the whole of it, which would include intermediaries such as milk processors. However, that is not what the Government propose in the Groceries Code Adjudicator Bill. Now that he is Minister in charge—the man with the levers of power who will stamp his own authority on the Department—I know that he will want to amend the Bill in line with the proposals.

I have run out of time. We will have to debate the matter again. I welcome the new Minister, and I hope that he can confirm that his imprint will now be on the proposals for the groceries code adjudicator.

Oral Answers to Questions

Huw Irranca-Davies Excerpts

Thursday 5th July 2012 Commons Chamber

[Mr Paice]

I fully understand the anger; it has been expressed to me by many farmers in the past few days. I am as concerned as my hon. Friend. However, as he knows, Ministers cannot and should not set prices. A compulsory code is provided for in the EU dairy package and we have said that we will consult on it. However, that would exclude a number of aspects that could be included in a voluntary code. That is why I still believe that a voluntary code is the better way forward.

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

A year ago, our sympathies went out to the Secretary of State, who said that she was having sleepless nights over the plight of dairy farmers—no one wants to see a Cabinet Minister with bags under her eyes at the Dispatch Box. However, Ministers have slept soundly while milk processors, one after the other, have slashed farm-gate prices to dairy farmers below the cost of production. Will the Government act urgently on the calls from Labour and the National Farmers Union to allow farmers to exit contracts when price changes are made; do more to bring farmers together in producer organisations; and either bang heads together to strengthen the voluntary code and enforce it, or consider regulation of this dysfunctional supply chain? No more sleeping on the job, please.

[Mr Paice]

I think the House will recognise synthetic anger when it sees it.

I am absolutely determined to do everything in the Government’s power to put things right. I have already explained that we want a voluntary code, on which I am more than prepared to bang heads together, and that we will consult on a compulsory code. We have also made it clear that we strongly support the idea of producer organisations, but I have to point out to the hon. Gentleman that the biggest cut announced this week was by a producer organisation.

Seasonal Agricultural Workers Scheme

Huw Irranca-Davies Excerpts

Wednesday 20th June 2012 Westminster Hall

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

It is a pleasure to speak under your stewardship of the debate, Mr Dobbin. I begin by congratulating not only the hon. Member for Sittingbourne and Sheppey (Gordon Henderson) on securing the debate—a very good and wide-ranging one—but my opposite number, the Minister, who I understand has just celebrated 25 years in the House. I offer him my sincere congratulations. I do not think that he will get a telegram from the Queen for serving 25 years, but I understand that he has had a pat on the back from the Prime Minister. It is a tremendous track record, so very well done to him.

I thank the hon. Member for Sittingbourne and Sheppey for securing the debate. It is a good opportunity to discuss quite a wide range of issues that affect agricultural workers and employers. He made a thoughtful and, sometimes, provocative contribution. All the points that he raised are worthy of debate. I know that the Minister will want to respond to the serious points that he raised.

Many hon. Members here today have declared their youthful experience of working in the fields up and down the land. I will include myself among them. With my brother, I used to pick potatoes on the fields of Gower. Tremendous potatoes they are, too—but not in my constituency, so I am advertising another’s. It was back-breaking work. So many hon. Members have declared their great experience of doing that and the skills that they developed that, during the summer recess, we might be able to fill the shortages ourselves if we return to the fields.

Many hon. Members have focused primarily on the seasonal agricultural workers scheme. Although discussions are ongoing in his Department and others, has he made an estimate of any shortage post 2013? What will he be doing to avoid such a shortage? Some estimate must have been made to deal with the concerns raised by hon. Members about shortages that will occur if we do not have something in place post 2013. Perhaps the Minister can share that with us, unless he anticipates that, because of measures that are under way, there will be no shortages whatever, crops will not lie in the fields and go to waste across various parts of the garden of England or Scotland and production lines will not come to a standstill, as we fail to sort those products for market.

I was pleased to hear of the meeting that was arranged by the hon. Member for West Worcestershire (Harriett Baldwin) recently. It is good that that has prompted some action. If I understood correctly what she said, the group that has been set up will bring together the Home Office, the Department for Work and Pensions and others, including, I hope, the Minister. Will it be a powerful group chaired by the Minister, or a Minister or senior official? Given its importance to agriculture, I hope that the Minister will do so, although I understand that SAWS is the responsibility of a different Department. Members would welcome the group having a ministerial chair to ensure that it delivers post 2013 and is not left to senior officials, no matter how good they are. I hoped that such a group would be in action, without being prompted by the hon. Lady’s great efforts on behalf of her community, or by the farming unions. The Minister will want to update us on that.

I congratulate James Chapman, the former chairman of the National Federation of Young Farmers Clubs. As the Minister will know, he lost his arm in a farming accident. When he considered what to do in response, he bravely and admirably decided to campaign on farm safety, which we have not yet touched on today. He was recently awarded an MBE in the Queen’s birthday honours list, on which we congratulate him. It reminds us how critical farm safety still is and how much more needs to be done to ram home the message about the need to protect not only oneself, but fellow workers in dangerous agricultural settings.

This week marks the first anniversary of the Farm Safety Crusade. I pay tribute to the work of farming unions and insurers who are promoting farm safety against the backdrop, of which we all know, of a year-on-year rise in the number of accidents and fatalities. NFU Mutual has seen year-on-year increases in serious accidents on the farms that it insures. Shocking statistics from the Health and Safety Executive show that agriculture now holds the unenviable position of being the UK’s most dangerous industry, with 42 people killed in the year to April 2011. Over a 10-year period, more than 435 people have been killed as a result of agricultural work activities. Tragically, that it almost one person every week.

A great deal of good work is going on to turn that around, from the nationwide Farm Safety Crusade to efforts such as the “farm safe” campaign and the annual “efficiency with safety” competition arranged by Cornish Mutual and Cornwall Federation of Young Farmers Clubs. There are many other sector-led initiatives around the country. What efforts are the Government making in Whitehall and across the regions to turn around the rising tide of fatalities and serious injuries in farming and to reinforce the efforts being made in the field by others?

The Minister recognises the criticality of the issue, so I urge him to ask the Secretary of State for Environment, Food and Rural Affairs to focus her mind on it and personally meet the HSE with him to push hard for a solution. I was disappointed to learn in a written answer on 24 November that there had been no recent discussions with the HSE on the safety of agricultural workers because the responsibility fell to another Department. I honestly do not think that that is adequate. I know that the Minister takes the issue very seriously. Will he give an undertaking that he and the Secretary of State will meet the HSE to discuss the problem and see what more can be done? It is not simply something that has happened under the present Government; I have made it clear that agricultural accidents and fatalities have been a rising trend.

The work of the Gangmasters Licensing Authority is of huge importance.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

That is the next debate.

[Huw Irranca-Davies]

It is indeed, but as I will not be present on the Front Bench for the next debate, I will take the opportunity to comment. The GLA has been commented on by other hon. Members.

The action that the GLA takes to tackle worker exploitation in the agricultural, horticultural, shellfish and food processing sectors is second to none. Its success has been acknowledged by everyone in the House and in wider reports, including those by the universities of Liverpool and Sheffield, the Wilberforce Institute and the Joseph Rowntree Foundation. The Minister and I debated the issue in February, and it will shortly be debated again in this Chamber, but at that time we were still awaiting the outcome of the red tape challenge, so we were a little in the dark.

On 24 May, the Government announced the outcome of the challenge and the changes that they intend to make to the GLA. The announcement included news that the GLA has taken a risk-based approach and will no longer regulate low-risk sectors. That includes apprenticeships, forestry, land agents and voluntary workers. Automatic compulsory inspections of businesses when they first apply will be abolished. The licensing period will be extended from 12 months to two years for highly compliant businesses. There will be a move to allow shellfish farm businesses with exclusive rights to use the seashore to use their workers to grade and gather shellfish stock, without needing to be licensed as gangmasters. There will be a substitution of administrative fines and penalties for low-level and technical minor offences, which we debated in some detail during the last such debate. Alternatives to prosecution when taking enforcement action against a labour-user who uses an unlicensed gangmaster will be explored. There will be a focus on the gross abuse of workers by unscrupulous gangmasters who commit multiple offences, such as tax evasion and human trafficking.

We welcome the Government’s commitment to the GLA. I say that in spite of the appalling Beechcroft recommendation to abolish it—an opinion reflected in some of the responses to the recommendation. It was an unacceptable and dangerous proposal, and I am glad that the Government have said that they will not accept that or other recommendations in the report. The Minister will agree that the bottom line must be that the most vulnerable workers in our society are not abandoned. What impact assessment did the Government undertake—I am sure that they undertook one—before announcing the changes? What will be the impact on protecting vulnerable workers? Where are the areas of risk in this risk-based approach?

[Jim Shannon]

We have had some success in Northern Ireland, particularly in my constituency, integrating migrant workers into permanent jobs. Examples include Willowbrook Foods and Mash Direct. One employs 260 people and the other just over 100 people—coming from nothing. Perhaps we can use good practice in other parts of the United Kingdom, particularly Northern Ireland, as an example of how we might do things better elsewhere.

[Huw Irranca-Davies]

The hon. Gentleman knows the area well, and an advantage of the devolution of administration and powers is that we can, and should, learn lessons about differential applications across the UK. We need to do more within the joint committees that bring the devolved Administrations together and in discussions between Ministers, so that those lessons can be learned. He makes a good point. We should not always try to work from a completely blank sheet of paper, but look at what works well elsewhere.

Will the Minister provide us with the timetable for changes to the GLA? His written statement of 24 May was not clear on the consultation timetable or process. Is he in a position to provide us with that now? Will he confirm that the GLA will have the necessary resources to tackle worker exploitation in the relevant sectors, even under the new approach? We all want the GLA, in its revised form, to be lean, mean and effective, but that requires resourcing, so I seek assurances on that. Will he also provide information on how he intends the GLA to work more collaboratively with other organisations, including the Serious Organised Crime Agency?

I want briefly to talk about the abolition of the Agricultural Wages Board, which I have discussed on several occasions with the Minister and other hon. Members. He knows how strongly I and the Labour party feel on the issue. That strength of feeling is shared by some of the farming unions, such as the Farmers Union of Wales, and by farm workers and the Welsh Government. The AWB protects 152,000 farm workers in England and Wales and has mirror effects on others in the sector. It ensures that people working in the countryside, from apprentices to farm managers, get a fair deal. In its 62-year history, it has provided basic pay and protection for fruit pickers, farm labourers and foresters. That covered wages, but also holidays, sick pay, overtime and bereavement leave.

The Minister will no doubt say—we have had this discussion many times—that many farmers pay well above the agreed wage rates; and I do not disagree. He may also say that there is a national minimum wage—so what is the fuss? However, the AWB does far more than set pay minimums, and when it is gone, the pay and other terms and conditions are threatened. The wages of 42,000 casual workers could drop as soon as those workers finish their next job, once the AWB is gone. It is probable that the wages of the remaining 110,000 will be eroded over time. Ministers have said in the past that farm workers will be protected by the minimum wage, but only 20% cent of farm workers are on grade 1 of the AWB. The rest earn considerably more than the minimum wage. The downward pressure on higher grades in economically difficult times will be high. Children who do summer jobs or part-time jobs currently receive just over £3 per hour, but they are not covered at all by the national minimum wage. They will have no wage protection—unless the Minister wants to correct me on that—when they do holiday work, as has been mentioned, or weekend work, after the board is abolished.

[Mr Spencer]

Does the shadow Minister recognise that agriculture has changed dramatically in the past 20 years? A combine harvester costs £250,000 and no farmer will put an unskilled member of staff in charge of machinery of that value. We have heard from my hon. Friend the Member for West Worcestershire (Harriett Baldwin) about laser machinery for measuring asparagus. The salaries that are now attracted in agriculture are far above those provided for under the Agricultural Wages Board. I wonder whether times have moved on and it is no longer necessary.

[Huw Irranca-Davies]

Time will tell if we abolish the board. However, not only has the Farmers Union of Wales welcomed its retention in Wales—and discussions are ongoing to see how that can take effect if the AWB is abolished in England; it has said it welcomes the clarity that the board gives on a range of conditions for agricultural workers. That is particularly true for small farmers who do not want to get into endless discussions about individual contracts, with different people on different wages for essentially the same job, and consequent disputes. The AWB provides a very good service for an industry that is often fragmented and disparate. The point that the hon. Member for Sherwood (Mr Spencer) makes about modern technology and food processing is valid for many parts of the industry, but things are not uniformly like that. That is why the Labour party sees the AWB as providing a safety blanket, to ensure that all workers’ terms and conditions are properly protected.

DEFRA’s own figures suggest that the abolition of the AWB will take £9 million a year out of the rural high street through holiday and sick pay alone—that will be £9 million coming out of the rural economy, because it is not going into people’s pockets in one way or another. That is not an insignificant figure, and it is worthy of further consideration. In the 18 months or so since the Government announced their intention to abolish the AWB, a lot has changed. The economy has gone into a double dip recession. The cost of living has risen dramatically. Food and fuel prices have risen well above inflation. Overall unemployment is up, and youth unemployment is chillingly high at more than 1 million. As we watch developments on the continent unfold day by day, it appears there will be no improvement in people’s circumstances for some time yet. A study commissioned by The Guardian and published this week showed that almost 7 million working-age adults are living in extreme financial stress, from pay cheque to pay cheque, one push from penury, despite being in employment and largely independent of state support. Many of those will be agricultural workers in rural communities.

I ask the Minister to think again. Why, against that backdrop, do the Government insist on pressing ahead with the policy, taking money out of the rural economy and the pockets of rural agricultural workers, and making things harder for people, many of whose wages will fall as a result? Those in rural areas already face significant challenges in housing, transport and access to schools. The abolition of the AWB may prove another difficult hurdle to overcome. However, if the Minister is determined to press ahead, I want to ask some additional questions. We are all awaiting an announcement on when the AWB will be abolished, but we have not had that clarity yet. Yesterday evening, I met with the farmers unions—and some farmers unions, of course, support the abolition. They were asking when there would be clarity and a timetable: when will it happen? When does the Minister intend to lay an order before the House abolishing the AWB? Farmers’ patience is being stretched. In the mean time, can he confirm that negotiations with the AWB for the year ahead have been concluded? Will the pending abolition affect those? Has he asked his Department to reassess the proposals in the light of current economic circumstances? If not, why not?

I recently submitted a freedom of information request to the Minister’s Department for the impact assessment of the abolition of the AWB. It was rejected. No doubt he will explain why, and give the normal Whitehall reasons, but his response implied that the assessment would be published soon, so when will we see it? We want to get behind the detail, to see what the effect will be on rural communities. In the absence of the impact assessment, will the Minister guarantee that, on the abolition of the AWB, children will not be paid below the minimum wage, that the wages of workers in AWB pay bands will not be depressed, that rents on farm cottages will not rapidly escalate to full market value, or tenants be turfed out because they cannot afford them, and that when new recruits are taken on it will not be on inferior terms, creating a two-tier work force for the same jobs?

If the Minister doubts that that might happen, and thinks it is only I who say it, I refer him to the Incomes Data Services report for the Low Pay Commission, “The implications for the National Minimum Wage of the abolition of the Agricultural Wages Board in England and Wales”. What does the change mean for the national minimum wage, where the Government’s defence lies— “Don’t worry, the NMW will take care of this”? The report states:

“Once abolished, many of the provisions of the Order will either be only partially covered by other statutory employment legislation, or not at all. Employment legislation does not make any provision for specific rates of pay linked to skills, specific rates of pay for overtime, a minimum rate of pay for workers of compulsory school age, rights to paid training, standby duty and night allowances, entitlement to paid bereavement leave, a birth or adoption grant”

and so on. It also states that

“abolition removes protection for young workers of compulsory school age”

and that

“the statutory minimum rates for both workers aged 16 to 20 and apprentices will be significantly less under the NMW than they currently are under the Agricultural Wages Order.”

Hon. Members have spoken passionately about the need to enhance skills and training in the agricultural sector, but the report states clearly that the wages of apprentices and those learning their skills will be depressed.

The report states:

“There may also be issues around the accommodation offset, whereby in some cases agricultural workers may be worse off under the NMW rules”,

and it explains why:

“There is no such threshold under the NMW”

for workers’ accommodation. It also states:

“The NMW rules on accommodation offset allow deductions to be made even if the worker could have lived elsewhere. This could mean that agricultural workers who are not currently subject to the accommodation offset…could be subject to it in future.”

It continues:

“On piece work, agricultural piece workers are currently guaranteed to get at least the minimum rate appropriate to their grade.”

That is more favourable than the national minimum wage approach,

“where slower workers can earn less than NMW if a properly assessed ‘fair’ piece rate is applied.”

It is not true to say that the abolition of the AWB is not a problem because the national minimum wage will deal with the issues. There is far more to the AWB’s terms and conditions than that, which is why I am asking the Minister to think again.

I thank the hon. Member for Sittingbourne and Sheppey for raising this important debate, and thank all hon. Members for some very good contributions. We want to see a rural economy that works for all working people. It should be fair across the board, as these are tough times for all those who work in agriculture. I look forward to the Minister’s response.

[Jim Dobbin (in the Chair)]

Before I call the Minister, let me say that I did my fair share of potato picking when I was a mere lad in the wonderfully beautiful scenic centre of the agricultural world, the kingdom of Fife.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I can add my experience to the debate, Mr Dobbin. I am probably the one who has most recently done such activities, and I am probably the only one who, as a farm manager a long, long while ago, employed such groups of people, which was not always the easiest personnel management issue that one faced.

One advantage of speaking last in the debate is that I can put to rest the argument about which is the most important constituency in the country for the production of fruit and vegetables. Although I might be prepared to acknowledge other constituencies for fruit, I certainly will not do so for vegetables. Cambridgeshire and my fenland constituency are renowned for the production of high-quality vegetables and salad crops. I know that that is a somewhat light-hearted comment, but it means that for 25 years as a constituency member—I am grateful to the hon. Member for Ogmore (Huw Irranca-Davies) for his personal congratulations on my time in this place—I have been involved in many of the problems that my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) raised, because I have substantial growers trying to employ large numbers of people to harvest salad and root crops in my constituency. I congratulate him very much on initiating this debate. I knew his main thrust was about SAWS, because he kindly furnished me with a copy of what he was going to say, but I was not surprised when other hon. Members, especially the hon. Member for Ogmore, used the opportunity to raise other issues.

In 2011, the total UK agricultural work force—a varied work force that includes farmers, business partners, directors and spouses—numbered around 476,000, of which approximately 177,000 were employed workers. Unlike most industries’ balance between employed and self-employed people, in agriculture only about a third of the total are employed. Like other sectors, agriculture requires a reliable source of labour, but perhaps more than other industries it needs flexibility, to meet the peak seasonal demands of planting, harvesting and cropping. Such work is always there but, as shown by this year’s experience of the daffodil crop, recounted by the hon. Member for Angus (Mr Weir), it is subject to the vagaries of the weather. No Government or board can ensure that crops across the country harvest sequentially, which is the ideal for the movement of daffodil pickers from Cornwell to his constituency.

Clearly, we need a constant and ready supply of temporary labour. As every speaker today has said, that used to be provided by students and others. As my hon. Friend the Member for Sittingbourne and Sheppey will know, large sections of the London population used to move down to Kent or Herefordshire for hop picking. Those days are gone, however, and we have seen the advent of the seasonal agricultural workers scheme, which has for a long time played a key role in meeting seasonal demands. Traditionally, as my hon. Friend said, SAWS allowed students from universities outside the European Union to work in the UK agricultural industry for periods of up to six months, and provided an opportunity for students not only to develop skills in agriculture but to learn the English language and experience a different culture and way of life. Of course the EU was much smaller in then; as it has expanded, the role of SAWS has changed.

As several hon. Members have said, the Home Office is responsible for the administration of SAWS. Its assessment of a continuing need for the scheme changed in the light of EU enlargement in 2004 whereby many countries that previously sent students under SAWS did not need to continue to do so because there was free movement within Europe. My own sons used to work in the sector and regularly worked alongside large numbers of Poles and people from the Baltic states in particular. [Interruption.] My Parliamentary Private Secretary, my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), is delighted at the support for Polish workers. In those days of course, the gulf in wealth was such that workers could come to the UK, work for six months and literally go home and buy a house; for them, it was often a major economic contribution to their future life. Obviously, however, once those countries acceded to the EU, the situation changed. The subsequent introduction by the Home Office of the points-based system to manage economic migration closed down low-skilled migration from non-member states.

That brings me to the change made in 2007 by the previous Government to restrict workers from Romania and Bulgaria. Although those countries had acceded to the EU, transition arrangements were put in place. That is consistent with the requirements of the Community preference principle, which states that preference in access to labour markets should be given to EU nationals over workers from third countries. The SAWS quota level for 2012 and 2013 is set at 21,250.

SAWS was due to close at the end of 2011, but following the decision to retain restrictions on labour market access for Bulgarians and Romanians for a further two years, my hon. Friend the Minister for Immigration announced at the end of last year that it would continue until 2013. As I hope hon. Members will appreciate, I am very much aware of the desire to know what is to happen after 2013. I can say that DEFRA is working closely with colleagues from the Home Office and the Department for Work and Pensions on the matter; however, no decision has been taken yet on whether a successor scheme to SAWS will be put in place. We clearly need to look at the evidence—we do not yet have all that in hand—that the sector is unable to meet its seasonal labour needs from the UK and the rest of the EU. In that respect, the Home Office has indicated that it intends to ask the independent Migration Advisory Committee to advise on the case for a future scheme. Obviously, I expect that stakeholders will have the opportunity to provide evidence to the committee.

At this stage, it is important to refer to the comments of my hon. Friend the Member for West Worcestershire (Harriett Baldwin) about the UK labour market and to my own experiences as a constituency MP. In the past, major efforts to bring busloads of unemployed people from centres of high unemployment into Cambridgeshire to do this work have been an abject failure. The bus may come full the first day, but the second day it is half-full and the third day there is only one person on it. People just do not stick it. With the changes that are being made under the universal credit arrangements, which my hon. Friend the Member for Sittingbourne and Sheppey mentioned, we all hope to get a lot of the long-term UK unemployed back to work. That is the objective and we hope and believe that the changes should work, but we do not yet know what their precise consequences will be.

The wider context, which several hon. Members referred to, is the issue of overall migration. I share the view expressed by the hon. Members for Angus and for Perth and North Perthshire (Pete Wishart) that there has been some confusion over the role of SAWS. I fully accept that the history of SAWS is that the vast majority of people who come to the UK under SAWS go home when they are supposed to and that the number of people who fail to do so is minimal—in single figures, I believe. Nevertheless, we must ensure that our overall objective to reduce net migration is not undermined.

The key issue will be whether any new scheme, if there is one, can be effectively managed to ensure the departure of participants who come from outside the EU. To prevent confusion, I should emphasise that people from Bulgaria and Romania will have free access under any new scheme. It is not the case that we are stopping them coming to the UK; they will be able to come anyway, even without SAWS. The end of SAWS will not reduce in any way the potential supply of agricultural labour. Those people who are coming to the UK under SAWS will still be able to come. The issue is whether they will then come for other reasons—for example, to seek other employment—as has happened over the years with people who have come from those countries that joined the EU earlier. Obviously the UK is not alone in using migrant labour; many other countries in the world use it, but given the increased scope for labour migration from within the EU since 2004, we must approach the case for more labour migration from outside the EU carefully and soberly.

My hon. Friend the Member for West Worcestershire discussed whether we should rely on migrant workers to meet the seasonal demands for labour. As she said, the Government are already taking steps to get the long-term unemployed back to work, and agriculture has a role to play in that process.

My hon. Friend the Member for Sittingbourne and Sheppey asked about prisoners. Working outside prison, whether in paid or unpaid work, is an important step towards reintegrating those prisoners who are preparing for release back into society. The Government are committed to expanding the number of opportunities for prisoners to volunteer to work in the community or to work in paid employment. As my hon. Friend recognised, the highest priority clearly has to be public protection, and all prisoners working outside a prison are rigorously risk-assessed. My hon. Friend also referred, quite properly, to the National Farmers Union’s policy paper, “A Seasonal Agricultural Workers Scheme (SAWS) for the Next Decade”, which refers to the employment of prisoners and ex-prisoners. He said that that paper notes there is some caution among employers about employing prisoners and ex-prisoners, and I will not repeat all the points that he rightly made. However, in relation to SAWS, I can assure him that DEFRA is fully aware of the need to ensure that crops are harvested.

As an aside, I should say that one of the very satisfying developments in the past few years has been the reclaiming of the domestic fruit market Domestic producers had lost that market to imports, but now a much higher proportion of fruit consumed in this country is produced here. It would be absolutely tragic if we allowed that trend of increasing domestic production to go into reverse because we were unable to harvest domestic fruit.

My hon. Friend referred to the common agricultural policy, greening and the possible switch between the two pillars of CAP. Let me try to explain the present position, although I will not go into detail because, as hon. Members know, the CAP is so complicated that I could use the next few debates trying to explain it in full.

We are now at the end of the Danish presidency of the EU and in the Agriculture Council on Monday we took stock, with a paper from the presidency about where negotiations and discussions have gone. Under the greening proposals, the European Commission is suggesting that 30% of direct payments should be conditional on achieving an element of greening in pillar one. The British Government’s position is quite clear: we believe that greening is ideally dealt with under pillar two, where it is possible to make more effective targeted payments and achieve better value for money. However, it looks as if greening will be dealt with under pillar one; if so, we will have to accept that. We are therefore in discussion with many other countries about how we can adapt the Commission’s “three-legged stool” to which my hon. Friend referred—the three criteria—to ensure that British farmers, particularly English farmers in stewardship schemes, are not disadvantaged by those criteria.

I have already said, and I emphasise again now, that if people sign up to a stewardship scheme and subsequently find that they are seriously disadvantaged, they will have the option to leave the scheme. I do not want that to happen and we are working very hard to try to ensure that membership of a stewardship scheme is somehow reflected in meeting the criteria of the greening proposals. I cannot prophesy what the outcome will be, but I assure hon. Members that that is the objective. I guess it is an objective shared by all hon. Members that our farmers should not be disadvantaged. The Commission has referred to our farmers as champions of the environment, and that should be reflected in their ability to access payments.

On the widest aspects of the CAP, we want to see better value for money and a reduction in the overall CAP budget. We do not see why the CAP should be immune from the immense pressures facing the whole of the EU—not just the pressures arising from the euro crisis, but the overall pressures on the economies of member states. We believe—it says that in my brief, but I passionately believe it—that the day will dawn when subsidies and direct payments will disappear. I have believed that for a very long while. I want those involved in the CAP to face up to that and to begin to plan for it. It will not happen today or tomorrow, or in the current seven-year time scale, but I believe that it will happen; and not only do most people believe that it will happen eventually, but they want it to happen. For example, most of the younger generation of farmers want it to happen. We should be planning for that day.

What we need to be doing and what we want to see from the CAP is the introduction of measures to encourage the agriculture industry to become far more competitive, market-oriented and innovative. Given the global changes in the food market, those in the industry would consequently be able to achieve their necessary income from that market and from the increasing demand for food from across the globe.

We do not believe that changes to the CAP will have a significant impact on agricultural employment. The Scenar 2020 study prepared for the European Commission suggests that changes in employment are largely being driven by wider developments in the economy and improved efficiency in the sector. According to its own analysis, which was based on there being no reform of the CAP and no further trade liberalisation, the Commission expects a 25% fall in the agricultural work force across the EU by 2020.

To encourage employment rather than subsidise it, we need to make it easier for farm businesses to take on workers, which brings us, inevitably, to the concerns expressed by the hon. Member for Ogmore about the Agricultural Wages Board. I do not think that the Government have ever said, and I hope that I have never said it, that the minimum wage provisions entirely replaced the wide range of provisions under the Agricultural Wages Board. I am not surprised that the hon. Gentleman could read into the record a long list of statements made by the board. Self-evidently, the AWB does not want to be abolished, so it is hardly surprising that it said what it has. I have certainly never suggested that all the measures the board provides will be replicated by the minimum wage.

[Huw Irranca-Davies]

I simply want to put on the record that it was not the Agricultural Wages Board that made those statements. I was reading from an independent report for the Low Pay Commission that was commissioned from the independent consultancy Incomes Data Services, Thomson Reuters. The report runs to about 100 pages, and I read from the conclusions, which are specific and evidence-based.

[Mr Paice]

I am grateful to the shadow Minister for his clarification, and I am happy that the record has been corrected.

The key point, however—my hon. Friend the Member for Sherwood (Mr Spencer) really touched on it—is that we are talking about modernising an industry, and the fact that only 20% of the work force are on the basic rate makes the case for not needing it, and does not, as the shadow Minister suggested, somehow undermine it. The reality is that the vast majority of people are above the basic rate, and I emphasise that no one already employed in the industry can lose out, because they are protected by their current contracts. Of course some criteria are not included, but there used to be a plethora of such wages boards and councils—largely set up by Labour Governments—and many dealt with bits and bobs such as holiday pay and so on. We need to recognise, however, that in 13 years of the previous Labour Government, in which the hon. Gentleman served, not a single one of them was brought back. If it is so important that workers are covered by all those other arrangements, he needs to explain why the Labour Government did not bring back any of them back.

The hon. Gentleman asked about the timetable. I can tell him that the Government are determined to abolish the Agricultural Wages Board. Negotiations with the Welsh Assembly Government are ongoing, as he said, but I cannot tell him exactly when the board will be abolished. We intend to do it, but there are the negotiations and discussions to go through. As said said, the board has concluded the next round, and that will come into play. I am advised that the IDS report to which he referred gave scenarios, but that the Low Pay Commission concluded that it was too early to judge what the full implications of the board’s abolition would be.

I fully understand why the hon. Gentleman used this opportunity to talk about gangmasters, but as my hon. Friend and constituency neighbour the Member for North East Cambridgeshire (Stephen Barclay) is about to open a debate on that topic, I intend to reply to the points the hon. Gentleman raised in my response to that debate. If he wants to stay and listen, I am sure that you, Mr Dobbin, or a successor Chair, will allow that.

I will end by talking about safety, which is of such great importance. I do not know whether the hon. Gentleman was just being kind or whether he knew about this, but I feel passionately about safety because within a fortnight of joining the agricultural work force at the age of 17, I witnessed a fatal accident in which someone of my age was killed within a few feet of me. That has had a lasting effect on my attitude to farm safety. I was a victim of a considerably less serious accident myself and I still bear the scars, so I take second place to no one in my concern for farm safety.

I am proud that a long time ago I won a Farmers Weekly competition on farm safety—that proves my credibility on the subject. The hon. Gentleman is absolutely right that the industry’s record is horrendous and we should do everything we possibly can to remedy that. I cannot speak for the Secretary of State, but I happily assure the hon. Gentleman that I will speak to the Health and Safety Executive. He should not take from the fact that the meeting to which he referred has not taken place that there is any less enthusiasm or commitment to safety. I cannot repeat often enough that farms are not playgrounds. There is a place for young children—sadly, many of the accidents involve young children—but, in today’s world, that place is not in a farmyard.

The other factor affecting safety is that farming is often a lonely, remote activity, and people who might otherwise be saved die in accidents because of the distance from help or the inability to get help. I am pleased that there are now many technologies whereby people can call for emergency help—a bit like what we might find in sheltered housing, but much more sophisticated. That is good, but none of us can be too intense in our desire to drive down the scale of farm accidents. It is important to note that when I set up Richard Macdonald’s task force, I deliberately placed on it the health and safety representative for agriculture so that we would not be increasing any farm risks. That is hugely important.

I think that I have addressed the various questions—

[Huw Irranca-Davies]

I thank the Minister for his reassurances about health and safety. I do not doubt his personal commitment, or that he will meet with the Health and Safety Executive.

Is it too early to ask based on the evidence and the Minister’s privileged position of involvement in discussions with ministerial colleagues, whether DEFRA has a preference for something to replace the seasonal agricultural workers scheme post-2013, and whether there is any difference in stance between DEFRA and the Home Office or any other Department? Does the Minister have a preference to replace SAWS with another scheme?

[Mr Paice]

The hon. Gentleman uses his delightful, gentle style to try to tempt me into doing something he knows full well from his own ministerial experience is verboten in ministerial circles—commenting on relationships with other Departments. I have no intention of being dragged into the trap.

As I quite properly said, we do not yet have all the information with which to form a judgment, but that is being worked on. I have described how the Home Office will ask the Migration Advisory Committee to look into the matter. Clearly, we will study the figures and assessments and talk to the Department for Work and Pensions and the Home Office about the future work force, but I will not be tempted into any debate about what other Departments, or indeed my own, are considering.

[Huw Irranca-Davies]

I understand the Minister’s reluctance, but may I ask when we are likely to see any progress in the ongoing discussions, so that Parliament can also contribute to the debate post-2013? Will it be by the summer, or by the early autumn—September or November? Early autumn could become January.

[Mr Paice]

The hon. Gentleman pushes and pushes, which is remarkable given that I have already taken nearly half an hour to respond to the debate. I cannot give him a timetable. I fully appreciate the concern about the industry. I have had my—I had better be more precise: I have had representations made to me by the industry, by my constituents, and obviously by Members this morning. I fully accept that the industry needs to know where its future work force will come from. We are working with other Departments to try to ensure that, but I am not in a position to make an affirmative statement at this moment.

I hope that I have picked up the majority of the points raised. I again congratulate my hon. Friend the Member for Sittingbourne and Sheppey on securing the debate. I should have also joined in the congratulations to Mr James Chapman, who I know, as the shadow Minster said. He has been a marvellous example of how people can use their own tragedies to help others.

[Jim Dobbin (in the Chair)]

Shadow Minister, I assume that you are waiting for the next debate. I have to explain to you that Opposition Front-Bench spokespeople cannot intervene in a half-hour debate.

[Huw Irranca-Davies]

Indeed. Thank you very much for that clarification, Mr Dobbin. That is why I raised the matter of gangmasters earlier.

Oral Answers to Questions

Huw Irranca-Davies Excerpts

Thursday 26th April 2012 Commons Chamber

[Mrs Spelman]

I am not sure about the number of people admitted to hospital, but the cost to the NHS is £3 million a year. Let us not forget that among the professionals whom we currently ask to take risks by going into private property are midwives and health visitors, and they will be better protected as a result of the extension we propose.

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

I recently met the father of a little girl from Chingford whose ear was chewed off in a horrific attack in a public park. It was simply heartbreaking to hear how the unrestrained dog attacked, circled and attacked again—like a shark, he said. Victims of dog attacks, together with police officers, health workers, vets and postal workers, have specifically called for powerful new dog control notices that could, for example, force owners to muzzle and restrain aggressive dogs and prevent attacks. Will the Secretary of State explain, not only to the House but to that father and all the victims of dog attacks, why the Government have rejected these new powers that have been demanded, which could tackle irresponsible owners and save young lives and limbs?

Rural Communities

Huw Irranca-Davies Excerpts

Tuesday 17th April 2012 Westminster Hall

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

It is a pleasure to serve under your stewardship, Mr Hood. I congratulate the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart)—whose constituency might, sadly, disappear, like many others—on securing this debate. It is a fine opportunity to ask the Minister for an update on the Government’s progress or otherwise towards sustainable rural communities.

I congratulate all the Members who have made speeches and interventions; I am afraid that to mention them all would take my whole contribution, but they include the hon. Members for Carmarthen West and South Pembrokeshire, for Arfon (Hywel Williams), for Penrith and The Border (Rory Stewart), for Romsey and Southampton North (Caroline Nokes), for South East Cornwall (Sheryll Murray), for Montgomeryshire (Glyn Davies), for Brecon and Radnorshire (Roger Williams) and for Tiverton and Honiton (Neil Parish). They spoke splendidly on behalf of their constituents and about constituency matters. I particularly want to mention the hon. Member for North Antrim (Ian Paisley), who introduced a new concept to the parliamentary lexicon: an island off an island off an island. That is an extreme example of rurality.

The Minister and others here today will undoubtedly have received a sound schooling in the classics and will be familiar with the words of the esteemed Roman poet Virgil, who wrote 2,000 years ago—I apologise in advance for my limited Latin—“Quo moriture ruis?”, or

“Whither art thou rushing to destruction?”

At times in recent months, this Government, intent on the destruction of rural relationships built up over many years and of the countryside itself, have seemed to epitomise Virgil’s question. They have been seen to support rural communities only in the same way that Herod supported juvenile population control.

I refer of course to the national planning policy framework and its rushed, appallingly crass and ill-thought-out proposals for development. It seemed that the countryside, our green belt, our precious natural environment and our communities were set for destruction in a free for all, profit-driven rampage of executive homes, whereas the crying need in rural areas is for a range of homes, especially affordable homes for local people. The situation is worsening under this Government.

Concerns have been publicly and forcibly expressed by local authorities throughout the land, including Conservative-controlled authorities in the constituencies of the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), the Minister for Housing and Local Government, the right hon. Member for Welwyn Hatfield (Grant Shapps) and, for good measure, the Chancellor himself. The sorts of organisation that one would be happy to take home to meet one’s mother, such as the National Trust and the Campaign to Protect Rural England, suddenly found themselves in complete opposition to the Government and vilified by them. It is not often that the National Trust is painted as a pinko, lefty, subversive group, but ConservativeHome, that megaphone for Tory tendencies on the web—if that is not mixing my technologies—described it as

“some demented Marxist agitprop outfit”,

while Government Ministers described its work as “risible”. Indeed, the eminently quotable and often-quoted Minister for the Cabinet Office weighed in by saying that

“our position is right. I think this idea that creating a presumption in favour of sustainable development is somehow a massive erosion of the ability to conserve, is—”.

The Minister then used an expletive that was deleted from reports. It was a vernacular term that I believe to be mid-18th century slang derived from the German for “balls.”

Those same Ministers have been forced by their own MPs and the voice of middle England into a series of humiliating U-turns. What was a seeming rush to destruction—not just of the countryside, but of the self-styled party of the countryside—has been barely rescued from disaster at the last moment. That is just one U-turn fiasco, which followed hot on the heels of the forestry sell-off fiasco. My advice to the Government and to Ministers is to think things through. If there are too many U-turns, the Government, not to mention the public, will not know which way they are facing on any issue.

I thank the hon. Member for Carmarthen West and South Pembrokeshire again for giving the Under-Secretary the opportunity to make clear where the Government stand on key areas of support for rural communities. Local enterprise partnerships have been noted for their variable quality and for their scant attention in many areas to rural economic development and farming. Does the Under-Secretary agree with those concerns and, if so, what is he doing about it?

The Government profess localism in every breath, so will the Under-Secretary guarantee that in the provision of housing on farms, local planning authorities will be given the flexibility to allow generational succession, in recognition of the worrying age profile of active farmers and the need to do everything possible to encourage new entrants? In response to the hon. Member for Montgomeryshire, who made a good speech, it is a question of attitudinal changes on the ground and of positivism towards the development of agricultural holdings. The Welsh Government have delivered such localism. Will the Westminster coalition Government do the same?

In every other breath, Ministers from the Department for Environment, Food and Rural Affairs profess the critical need to enhance food security for the UK, so will the Under-Secretary explain why food production does not feature in the core principles of the national planning policy framework?

Rural living and working have many advantages, particularly if remote working and advances in remote communications can be harnessed. What assessment has the Under-Secretary made of the brake placed on rural economic development by the emerging digital divide, whereby the expansion potential of rural businesses is frequently inhibited, the productivity of home workers is affected, and farmers have difficulty completing online forms because of broadband not-spots and slow broadband speeds? In that respect, I commend the Farmers Weekly “Battling for broadband” campaign. Is the Under-Secretary worried about the potential for a growing digital divide between superfast urban areas and super-slow remote rural economies? The latter could benefit so much more from good broadband access.

When I was a DEFRA Minister, I had the privilege of visiting tremendous communities and people who had come together to save their village shop, pub or library, or who had filled a transport gap by creating diverse community transport schemes. Increasingly, local people are being asked to do more and more to sustain the vitality of their communities, but since this Government came to power, support from regional development authorities has been lost because they were unceremoniously scrapped, the community-owned pubs support programme has been cut and local authority budgets are under pressure. As has been said, cuts to local authority funding hit rural communities hardest, because of the added cost of provision of services in rural areas. What are the Government doing against that stark backdrop to help a greater proportion of communities to save their pubs, shops, banks, post offices, libraries and other services?

More than 4 million UK households—the majority of them in rural areas—are off the main gas grid and rely on heating oil, liquefied petroleum gas, solid fuels, mains electricity and microgeneration. The average cost of heating a typical three-bedroom home in the UK can be 50% higher when using heating oil, and as much as 100% higher when using LPG rather than mains gas. What are the Government doing to support home owners in our rural communities, who are more exposed to household poverty because of rising off-grid costs?

May I ask the Under-Secretary when or whether we will see firm proposals on petrol pricing in rural areas? He and his colleagues spoke eloquently and regularly about the issue in opposition, yet the very selective trials in the Inner and Outer Hebrides, the islands in the Clyde, the Northern Isles and the Isles of Scilly, which offered a discount that was described at the time by the Chief Secretary to the Treasury as

“terrific news for communities which have long suffered the effects of high fuel costs”,

are already jeopardised by the overall rising cost of fuel, which threatens to wipe out the discount. That view is not mine, but that of the Chief Secretary’s Lib Dem comrade, the right hon. Member for Orkney and Shetland (Mr Carmichael). It is indeed “terrific news”, but I do not anticipate it appearing on Lib Dem fliers.

What has happened to wider plans on rural petrol pricing? Are they just another victim of the Chancellor’s relentless, one-eyed focus on deficit reduction above growth? What assessment has the Under-Secretary made of the impact on rural petrol retailers and of the warnings of Brian Madderson, chairman of Retail Motor Industry Petrol, the forecourt association, that with rural petrol already up to 8p a litre more expensive than at urban stations because of delivery costs, up to 250 of the current 1,900 rural forecourts could close in less than a decade, leaving “petrol deserts”? Does the Under-Secretary take that threat seriously and, if so, what specific discussions has he had with Ministers at the Department of Energy and Climate Change, who have direct responsibility for ensuring adequate coverage of petrol stations for strategic purposes across the UK?

A fifth of all bus services in England face the axe this year, thanks to the Government’s cuts to funding for local bus services. The issue is affecting the elderly and the young, increasing social isolation and impacting negatively on employment and training opportunities. Indeed, the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker) is emphatically earning a deserved reputation as the Beeching of the buses.

This Government are out of touch with the reality of rural lives, rural jobs and businesses, and rural services. [Interruption.]

[Mr Jim Hood (in the Chair)]

Order. I ask hon. Members to calm down.

[Huw Irranca-Davies]

Thank you, Mr Hood. Has DEFRA or the Under-Secretary made any assessment of the wider national impact of the withdrawal of Government support for UK-wide programmes, and of the deep, fast cuts agenda on rural communities? Will he confirm that all the cuts have a disproportionate effect on rural areas? Closures of court houses in small rural towns affect not only the individual, but local law firms. Will the NHS Commissioning Board take into account rurality when allocating resources? How does the much-vaunted—at least by the Lib Dems—pupil premium take into account the extra challenges of rural school provision? Costs for access to jobs and benefits advice and training are usually between 10% and 20% higher for those in rural areas. Any diminution in services or increased travel to work as a result of fewer job opportunities will worsen the effect, as will closures of Sure Start centres and poor access to child care and so on.

The Under-Secretary is a member of a Government who are out of touch. Their policies are incoherent, as Baroness Warsi said on “Newsnight” last night. Nothing epitomises this out-of-touch Government more than what has become known infamously as the pasty tax. I pay tribute to the campaigning stance of local papers such as the Western Morning News, which has highlighted the potential impact on jobs and the economy in places such as Cornwall and the south-west. I ask the Under-Secretary directly, for the record: what representations did he or other DEFRA Ministers make to the Treasury on behalf of the food production sector and workers in Cornwall and elsewhere? Will he intervene to set the record straight? Were any representations made—a meeting, a letter or an e-mail?

I began my speech with a reference to Virgil, cautioning the impetuous against the dangers of undue haste and rushing headlong to destruction. I can only guess that this Conservative-led, Lib Dem-partnered Government are pinning their future on another of the Latin poet and philosopher’s maxims:

“Hope on, and save yourself for prosperous times.”

Common Agricultural Policy

Huw Irranca-Davies Excerpts

Thursday 8th March 2012 Westminster Hall

[George Eustice]

As I will say later, we need common objectives, but not necessarily a common policy. We also need clear state aid rules, as we have in other sectors. In that way, we can have a proper functioning single market and protect it, even though we do not have a common uniform policy across Europe.

The most important point about the proposals on the table is that they are a backward step for the CAP. The aim was to simplify it, and simplification has been the buzz word for many years, but the proposals will make it more complicated. As the Chair of the Committee said, we are effectively seeing a return to set-aside, with suggestions that 7% of people’s land should be set aside. At a time when food security, which should be a key objective of a common agricultural policy, is a growing issue, that is a step backwards.

I also object to the cap proposed on payments to farmers. If we want to encourage farmers to become less dependent on subsidies in the long term, we need to support consolidation and more efficient farms. A cap on payments would force farmers to break up holdings into collections of smaller holdings so that they still qualify for the subsidy, but that makes no sense. If we want a more efficient agricultural industry, why penalise the larger, more efficient farms?

There are some ludicrous things in the proposals. For instance, in an attempt to achieve crop rotation, there is some suggestion that farmers grow at least three crops to qualify for a subsidy. We can tell that the proposal was written by people who do not understand farming, because insisting on growing three separate crops will not necessarily bring the benefits we seek from crop rotation. For instance, somebody might grow cabbages, cauliflowers and oilseed rape to ensure they have their three crops, but those crops all come from the same brassica family, and are all subject to similar diseases, so a farmer who grew them would soon run into serious problems on their land.

What should a new CAP look like? We should start moving towards something that is about common objectives, rather than a unified common policy. The CAP should have key objectives, such as enhancing biodiversity, improving animal welfare and delivering food security. However, we should then give national Governments much more freedom to innovate, try new policies and adopt approaches that work in their countryside, rather than trying to have a uniform approach that works from Scotland all the way down to Greece, which is clearly difficult to achieve.

Allied to that, we would have a clear set of state aid rules that were specific to the agricultural sector, just as we have clear state aid rules for the single market in every other sector. Such rules would prevent, say, France from subsidising its farmers more than the UK Government and thereby putting our farmers at a disadvantage. Provided that we got those rules right, we could protect a single market in agricultural produce.

The key benefit of such an approach is that it would be more fluid. We would be able to hold the UK Government to account and say, “Why aren’t you trying this great new idea that is working so well in France? Surely, it would work here.” Instead, the best we can do now is to say, “How many meetings have you had with Poland to try to outmanoeuvre France?” That is not a good way forward.

When we make such proposals, people immediately think, “That’s a good idea, but it’s not realistic in the current time horizon.” I have heard that, too. Indeed, when I put these ideas to the Secretary of State last week, the answer was that they were ahead of their time, which is a flattering way of saying, “No, we’re not going to do that.”

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

The hon. Gentleman has great experience in the European Parliament, and I want to put one point to him. What he describes is already the direction of travel in the common fisheries policy, where there is a strong push from the UK Government, as there was under the previous Government, to move towards a more dynamic, regional-management approach, with much greater subsidiarity and local decision making, albeit in an overall framework. The hon. Gentleman may be ahead of his time on this issue, but practice in other areas is catching up with him.

[George Eustice]

The hon. Gentleman is right, except that I was not actually in the European Parliament. I was a candidate in the 1999 European elections, although unsuccessfully—and for a different party, I should add. However, I have followed these issues closely, and the hon. Gentleman is right. The EFRA Committee has, separately, been looking at the common fisheries policy, and there are proposals on the table not only to have a common framework and common objectives, but to give much more devolved power to groups of national Governments so that they can manage their own waters. It remains to be seen whether we get those reforms through, but the Government have been quite successful in getting the Commission to adopt them. That also shows the difference a different Commissioner can make. In Commissioner Damanaki, we have someone who is much more open to such proposals in relation to the common fisheries policy.

I want to question the idea that it is impossible to do what I am talking about. Alongside taking evidence on the CAP, the Committee has been looking at the natural environment White Paper. The striking thing about the CAP is that we hear people say, “We want to green pillar one in a flexible way. All this money is going into it; we need to get some public good out of it and green it.” However, they do not really know where to start, and the current proposals have run into a bit of a muddle.

On the other hand, we have the natural environment White Paper, which everybody says is very coherent and really well thought through, as well as having lots of interesting proposals about valuing natural capital and creating markets in which we can mitigate and offset environmental damage in some areas through improvements in others. The problem is that there is not enough money to bring life to those ideas.

Is it really beyond the wit of man to connect the two? Let us take some of the principles from the natural environment White Paper, link them to the funding in pillar one and see if we can make that work. What would that look like? It would mean replacing the single farm payment with some kind of market in transferable environmental obligations. A farmer on the fens who grows lettuces, and who does not really require the single farm payment for his business model to work, might say, “I don’t want to set aside 7% of my land. I don’t want to get into that. I just grow lettuces, and that’s my business model.”

In contrast, a farmer on marginal land in Wales, for instance—I have nothing against Wales, and there are patches of good soil there—may decide to opt into environmental obligations on a larger scale. That can bring benefit, with the establishment of wildlife corridors, and with critical mass in some areas for improved wildlife habitats. That might actually work, rather than a piecemeal approach with 7% of every farm’s land set aside.

Such a transferable obligations system could also be extended to issues such as animal welfare. For instance, in the case of livestock farmers who pursue less intensive systems that are better for animal welfare, rather than having to fight in the market for recognition for their extra work to improve animal welfare, they could be given that recognition by the Government; we could make them eligible for payments for which those who pursue intensive systems would not be eligible. There are lots of interesting things that could be done with such a system of transferable obligations.

As for pillar two, the Select Committee Chair mentioned the problem of its needing to be co-financed; sometimes the Government have been reluctant to buy into those things. To my mind, the answer is perhaps to bring back even greater control of pillar two, so that it does not become co-financed, but we do not send the money to the EU in the first place, and then have it come back with strings attached: in fact, we try to finance that as an agricultural fund that focuses on several key areas. Developing farm competitiveness is an important one that we should try for.

I also agree with the point that was made earlier about encouraging new entrants into farming. There was an interesting project, piloted in Cornwall, called the Fresh Start project, which aimed to encourage new entrants to the industry. The average age of farmers is incredibly high. I think that two thirds of farmers in Europe are over 60, which is a shocking figure. We need new entrants. The Welsh Government have also started interesting schemes to encourage new entrants to the industry. Pillar two could focus on improving competitiveness and encouraging new entrants, as well as keeping going with schemes such as the entry level and higher level stewardship schemes.

Those two policies, to return to what I said at the outset, prove the point that if a national Government are given the scope, freedom and head room to think through what a good policy looks like, they can get it right. The ELS and HLS are good examples of that. Britain is a trailblazer in that respect, because we have been able just to do the right thing. We have not had to go behind closed doors and haggle about it with 27 other countries. If we could do that in more areas of agricultural policy, our farming would be stronger.

--- Later in debate ---

[Neil Parish]

The hon. Gentleman is right. We have very competitive agriculture, and our country can compete well. As we move on with agriculture, we will have to decide where to put what public support we have. There is an argument for some support in upland and difficult-to-farm areas, not only for agricultural production but in relation to the landscape; that is essential. We have to look at where we can create competitive agriculture.

That brings me on to regulation. I praise the Minister for bringing in Richard Macdonald to look at the regulation and to try to remove it from agriculture, so that the industry can be more competitive. However, although the Minister is busy removing regulation, the European Commission is busy applying more, even though the commissioners talk about wanting to get rid of regulation. All the reform will do is add more complication. We have talked about the 7% set-aside, the three or four crops and all the rubbish coming out of the Commission; we need to oppose that, and I know that the Minister intends to.

[Huw Irranca-Davies]

I make one point in defence of regulation, which is that there is good and bad regulation. There is over-regulation and over-complexity, but an area where the farming community has worked well—although we still need to do more—is on the water framework directive. When it comes to our rivers, the quality of the natural environment—something to which the Select Committee and its Chair must have turned their attention—has improved more than we could have imagined 10 years ago. There is good regulation as well as bad. We need to fear the bad, praise the good, and get on with delivering for this country.

[Neil Parish]

The shadow Minister is right that there is good regulation, but he must also admit that there is far too much regulation. It is not that regulation is good or bad, but that there is too much of it. The coalition Government are looking through regulation to weed out the unnecessary and keep the necessary. Over the years, we have built regulation on regulation; that has been the problem. Take farm inspections and other requirements, many of which we must comply with because of European regulation. We often have many different people on farms to inspect, so we are trying to bring in one inspectorate and not have as much duplication.

We ought to move towards a strong market in agriculture and agricultural products, which is why, as we can all agree, the groceries code adjudicator is so important. That may not be a European or CAP issue, but it is very much about ensuring that agriculture can compete in the market and get a fair deal from the marketplace. The crux of my argument is that if we are to wean farmers off subsidies over the years, we have to enable them to compete in that strong market.

Agriculture is important in itself—it is a huge part of the economy—but there are also 500,000 jobs in the food processing industry, and much of the food being processed comes from this country, as it should. Again, I am not exactly on the subject of the CAP, but I urge the Minister to look at how we procure food, and to ensure that all the food that we eat in this place—and everywhere else, including in Departments and in Westminster generally—is from this country. I assure the Chamber that in France people would not be eating British beef, so the last thing that we want to do here is eat French beef. That, however, is a particular pet subject of mine, so the Minister might not necessarily want to comment.

In my constituency, there is a lot of grassland and livestock, both sheep and cattle, including dairy cattle. Much of the livestock is fed on grass, a lot of which is on permanent grassland, but some is on semi-permanent grassland. What I fear most about Commission proposals is that we will see agricultural grassland ploughed up unnecessarily, because of worry about the reforms. The Minister is reassuring farmers and trying to obtain the best reassurances possible from the European Commission, because such a development would be almost criminal. We need to deal with it quickly, to ensure that the Commission does not drive agriculture in the wrong direction.

In the future, I want agriculture to stand much more on its own two feet. That has to be. Public support for agriculture should not distort trade between member states or with those in other parts of the world. We must not forget that one of the reasons for reforming the CAP has always been that previous policies promoted high production levels in Europe, and those products were then dumped on the open market, destroying much of the agriculture in developing countries. We have at least moved away from that, and we do not want to move back in that direction.

I wish the Minister well in his negotiations with the rest of the European Union. As a Government and as a country, we must seek greater independence when it comes to how we develop our agricultural policy. The European Union must recognise that as it has grown, and will probably grow further, it must have much more flexibility when it comes to agriculture, because one size will not fit all, especially as the EU grows bigger and bigger.

--- Later in debate ---

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

It is a delight to attend this debate on the reform of the common agricultural policy; only three or four weeks ago, the Minister and I were debating the same subject in a European Committee. This is a welcome opportunity for further debate, and I congratulate the hon. Member for Thirsk and Malton (Miss McIntosh) because we need frequent opportunities such as this in order to keep track on progress and on the European negotiations of the Minister and his team. We must also watch the changes as they take place. This is a live and dynamic issue, and we hope that the leadership on reform that has been shown by the UK, both now and previously, will continue, and that we will push as hard as we can.

I would not go quite as far as my hon. Friend the Member for Luton North (Kelvin Hopkins), although I will return to his points in a moment. I hope, however, that the UK vision for CAP reform will deliver food security and viable farming livelihoods, as well as biodiversity, environmental gains and other public goods. My hon. Friend the Member for Brent North (Barry Gardiner) wisely widened out the debate, and we must also ensure that such benefits are delivered across the EU.

A common theme of this debate has been more regional autonomy and management, and how not to lose gains that the UK has made such as the uplands entry level stewardship scheme and so on. We must also, however, be ardently fixated on the need for environmental and animal welfare standards to be driven up across the EU. As a pro-European, I believe that one benefit of the EU is that it allows us to level the playing field up, rather than down. During negotiations it is important not only to look at ourselves—vital though that is—but also to look externally at the benefits for UK farmers if we level up the playing field. Not only will we have great standards of environmental and animal welfare, but the costs of agricultural food production and farming will be more uniform across the EU.

I genuinely congratulate the hon. Member for Thirsk and Malton and her Committee on initiating this debate and on the report. Early in her contribution, the hon. Lady made a commitment that the Committee will return to consider the topic, and I welcome that. She focused on what can appear to be a dichotomy between food production and food security, and environmental sustainability. That is the greatest challenge that we face, because it concerns not only environmental sustainability and biodiversity in individual fields and regions, but the challenge of climate change, and what that means for food production and the land use that was referred to so well in the Foresight report. How does the Minister square that circle, both in the UK and elsewhere?

To inject a note of optimism, I believe that we can face that challenge with strong leadership and vision, although we must recognise that there will be many a slip. My hon. Friend the Member for Brent North mentioned the previous Government’s “Food 2030” strategy, and I urge the Minister to return to that and perhaps address it in his closing remarks. Perhaps he could take the report off some dusty shelf in his Department and look at it again. One observation that is made frequently, not only by environmental or international development NGOs but by farmers and others in the farming community, is that although the “Food 2030” strategy is integral to CAP reform, it goes beyond that. It sets out a compelling, large-scale narrative, and a coherent vision of what we should be doing across the food chain, in terms of the environment and land management. I know that the Minister has such matters firmly at the front of his mind, but—I hope he will take this as constructive criticism—it does not matter how many narrow, discrete pathways of good work there are in his Department, those outside the political sphere tell me that the overarching, compelling vision is deficient. If we do not have the “Food 2030” programme, we need something that looks very much like it. An enormous amount of work went into that report, and I urge the Minister to look at it again as a basis for the overall framework.

The hon. Member for Thirsk and Malton mentioned the importance of self-sufficiency in food production, not only in the UK but in Europe. That provides a similar paradigm to our experiences of energy markets. We want the UK to be as self-sufficient as possible, but we also want to export as much as we possibly can. On St David’s day, my colleagues from the Welsh Assembly Government were in Brussels lauding the fact that the first 11 months of the past year saw a 22% increase in exports of Welsh lamb and beef. For the UK, the figures were 14% overall—the Minister will correct me if I am wrong. We are doing well across the UK, but Wales is doing exceptionally well. It still trades significantly with the EU as a trading block, but also well beyond Europe with countries such as China, India, Brazil and elsewhere. We must ensure that as well as UK self-sufficiency, we work with European colleagues to ensure a large degree of collaboration on EU sustainability. Britain is an island, although not in every respect, and we need to work together on many issues of food production and food security.

The hon. Member for Thirsk and Malton went into forensic detail on many other issues, and I will return to those during my remarks. She rightly pointed out the challenges faced by tenant farmers, and others, due to the current active farmer definition. That point was well made, and I am sure that the Minister will return to it. I agree with many of the hon. Lady’s points, and although I may not agree on some other issues, one benefit of the Committee’s report, and today’s discussion, is that it stimulates intelligent and well-informed debate. I hope that the Minister will accept that the comments that I and other hon. Members make are genuinely intended to help and to engage with him constructively so that he can take those thoughts into his discussions with the Commission, Members of the European Parliament and others.

All today’s contributions have been good in their own ways. The hon. Member for Banff and Buchan (Dr Whiteford) —as a Welshman, I can pronounce Buchan because I suspect that it has similar Gaelic roots—mentioned a theme found in several contributions about the need for an appropriate level of subsidiarity in decision making. There has been much talk about regionalisation and making decisions closer to home. I agree with that in principle although I do not know how far we will get; there is a similar debate on reform of the common fisheries policy. Regionalisation must be balanced against my earlier point about having more informed, intelligent decision making closer to home. We can say that with some confidence in a UK context, because although there is always the criticism that we could do more, our achievements probably set some of the highest standards in the EU. However, that regionalisation must be balanced against ensuring that we can monitor and evaluate what is happening in the rest of the EU. That is where the balance lies. We must ensure that other member states are equally good not only on food security, but on the environmental benefits and public goods.

The hon. Lady raised, as other hon. Members did, the spectre of over-complication in the CAP reform proposals. We, too, have that worry. We do not want to make some construct whereby farmers and their advisers spend inordinate amounts of time working around and through the proposals in order to avoid some of the complexities. That would be a self-defeating proposal. I hope that the Commission is aware of that. Certainly in my discussions with it, it has not wanted that to happen, but I think that it needs to look carefully while it is in these stages of finessing the proposals—this will require the Minister’s engagement as well—to try to strip out some of the complication and not get to the point at which very well paid advisers are advising some of the larger farmers at great expense on how to avoid and work around some of the complexities. The worst situation would be smaller farmers having immense difficulty in doing that.

The hon. Member for Banff and Buchan spoke out on something that has received a fair bit of publicity recently—the concept of slipper farmers. This is an interesting one. Even if they are a marginal element, it is important to deal with the issue. I do recognise the points made by others. Clearly, in terms of units of production, some of the larger farms will be not only highly productive, but highly efficient in terms of the cost of food production; and that rattles through to the supermarket shelves. Let us say, however, that someone does not look anything like an active farmer. We might be talking about an investor community or someone who has no interest whatever in an active role on the farm or in an active role in biodiversity and landscape management.

I would be interested in the Minister’s comments. Some people have argued that we do not need additional rules to deal with it—that each member state already has competences that could tighten up the situation. However, keeping public trust is vital. Even if what I am describing is a marginal issue, there is a danger that it will tear down public trust in where subsidy is going. Even if we make the argument that subsidy is not going simply into traditional food production, but into all those wider public goods, we must ensure that there are not exceptions that tear down public trust. As I said, I would be interested in the Minister’s comments on that, in quite a rational way. Are there examples? What is his assessment of whether agricultural subsidy is being used in a way that was not intended, and what we can do to tighten up the situation before the issue becomes one of wider public concern?

The hon. Member for Camborne and Redruth (George Eustice) recognised the need for a clear and powerful vision as part of negotiating strategy—this is where we are; we are dealing with CAP reform. Regardless of other ways forward, we need that powerful vision underpinning the strategy. The hon. Gentleman pointed out some ideas for greater regional decision making, which he described as ahead of their time. We have no difficulty with that. Those ideas need to be put forward, because eventually their time does come. I apologise for giving him membership of the European Parliament and for raising by accident past membership of other parties. He will not be the only one here today in that position. I am not making a confession of that nature, I hasten to add, in case my constituency Labour party is listening, but I will make my own confession. I have attended a Conservative club in my constituency on a regular basis. [Interruption.] Indeed. It is at the club’s invitation; we hold our branch meetings at a Conservative club.

The hon. Member for North Antrim (Ian Paisley) regularly speaks in debates on this issue. He is no longer in the Chamber, but he talked about the importance of export growth and engagement with the devolved Administrations. The Minister and I have talked about that matter before, and I certainly know that from the Scottish perspective and from the Welsh perspective, there is very strong engagement. The flipside, of course, is that there needs to be one coherent voice speaking on the issue once all the different elements have been pulled together. We need to avoid the dilution of an effective UK voice when three or four different voices are speaking. We must bring in those voices—that engagement is critical—but ensuring that there is one coherent voice at the end is also critical. The hon. Gentleman made powerful points of detail on behalf of his farmers. I know that the Minister will have heard those points and will respond to them.

The hon. Member for Tiverton and Honiton (Neil Parish) talked about the moral duty to produce food. I agree, not least because of the challenges that we face currently. I am thinking not only of food poverty, but of growing populations. It is a moral duty in this country and globally. However, I would argue that we also have a moral duty—to pick up the comments made by my hon. Friend the Member for Brent North—to protect and enhance the environment, to tackle climate change and to improve animal welfare. I know that the hon. Member for Tiverton and Honiton would agree with those as moral duties as well. I made a point to him about good regulation. Mention was made of one of the best examples, although it brought costs with it—the regulation on enriched cages. It is a tremendous tribute to our farming community that it stepped up to the mark and invested heavily in them. It now needs to be rewarded. I have made this point to the Minister before: he, in concert with the Commission, must strongly pursue enforcement action against states that are not complying, because otherwise we are disadvantaged. We have made all the investment and done our moral duty on animal welfare, but others are not doing that. From that moral high ground, we should not hold back in pursuing enforcement action against other countries.

My hon. Friend the Member for Luton North, who has just left his place, introduced a welcome diversity into the ecology of the debate by calling for abolition of the CAP. All contributions are welcome; there are different views on the matter. He also reminded us, not too diplomatically, of the failure of past EU negotiations under former Labour Prime Ministers and called for the Minister to heed his advice. I will move on swiftly at this point.

My hon. Friend the Member for Brent North regularly takes part in these debates, and with a fair degree of expertise. I think that he made the first mention of sustainable intensification today. My apologies to other hon. Members if they used that phrase. My hon. Friend is gesticulating towards the Chairman of the Select Committee, the hon. Member for Thirsk and Malton, so I apologise if she used it too. It is a critical issue. I am referring to challenges of how we raise food productivity—by that, I do not mean production; I mean productivity—while at the same time not damaging the environment, but improving it. That may relate to soil quality, river quality or biodiversity. It is a huge challenge and it means that part of the EU reform needs to involve the driving forward of research and innovation in those areas, so that we have much more productive and much more efficient farming, both in the UK and throughout the EU. In that context, I have mentioned “Food 2030,” which could be a very helpful contributor to that debate.

My hon. Friend the Member for Brent North also raised the spectre of the UK’s isolation. The Minister and I talked about that only a few weeks ago, and he gave me assurances that it had no impacts, or certainly no long-term impacts. I am not making an easy political point on this issue; the matter has been raised by the farming community. It has been raised directly by the National Farmers Union in documents, directly by the Farmers Union of Wales, and by the leader of the Liberal Democrats in Wales. I will not cite what they said, but their clear concern was that the matter could have damaged what was, I think, a good negotiating position on CAP reform and other issues. Today, I again seek the Minister’s assurance that he has bypassed those problems—that the matter is not causing him problems—because we need that reassurance for the farming community. I am sure that he is doing a tremendous job out there of engaging with like-minded countries on various issues, but we need to know that we have not taken a step back because of wider political issues.

My hon. Friend the Member for Brent North reminded us of the importance of sound science and the evidence that underpins it. Curiously, as we understandably focus on the farming community and food production in these debates, we sometimes forget that our overall approach to what we are doing—squaring this circle—needs sound evidence at every step of the way. That is probably one of the lessons that we should have learned from past CAP reform and past common fisheries policy negotiations. I am sure that the Minister will have heard my hon. Friend’s powerful contribution.

Let me refer Members to the recent debate that we had in the European Committee if for no other reason than that I am losing my voice and I do not want to repeat everything that I said then. I want to raise a couple of broad points. First, let me make one remark in praise of the CAP. We must remember why it was originally set up as we—the collective we—celebrate its 50th birthday. Over the years, it has been a constant source of controversy, but it has none the less stabilised farm prices so that farmers can innovate, invest and modernise agricultural production. In recent iterations of CAP reform, there has been a move towards recognising public goods, which is a welcome development. We should not forget—I want to put this on record today as I did in the European Committee—that despite the still huge sums of public money going into the CAP and then being returned not just to the farming community but to rural development and so on, European support for farm incomes has fallen markedly over the past 20 years, thanks to a series of reforms. In 1986 to 1988, nearly 40% of farm income was derived from European support, but by 2008 to 2010, that figure was down to 22%. I accept that we need to get to a position where our farming is competitive across the EU and where that support diminishes again, or at least is focused on where the public benefits are clearly seen and evident. At least the trend is going in the right direction. Many people would want it to go faster, but we are going in the right direction.

We must recognise that additional work needs to be done. In the previous European debate, I referred to the OECD report, which considered CAP reform and identified the need to remove the remaining impediments to the functioning of markets, to increase the investment in agricultural innovation and to target more effectively environmental performance of agriculture, including direct payments to farmers for environmental goods and public services.

It is fair to say—the OECD notes this, but so, too, have many others—that the more detailed proposals, which were made late last year, did not receive a universal and magnanimous welcome. Many people in the farming and environmental communities, the Minister and I criticised those proposals as potentially a missed opportunity. I say “potentially” because there is still time to work on them, save them and make them good after negotiations with the European Commission. They are potentially bad because they risk failing not only our farmers but the natural environment as well. I know that the Minister will be working hard to turn the situation around.

Devolved engagement was mentioned by many Members, and it is critical. Rather than repeat the whole of the European debate, let me just touch on the greening proposals which, significantly, are designed to avoid a situation in which we undermine the environmental benefits that we have already created here within the UK. The proposals operate differently within different devolved regions. It is certainly the case that while many called on us to go further and to go faster, we have none the less managed to put in place some very good examples in partnership with farmers, especially compared with other member nations. Schemes such as the entry level stewardship and the uplands ELS were worked on into the midnight hours and beyond on successive nights with large cups of coffee, if not bottles of whisky.

In addition, there is potential for voluntary schemes such as the Campaign for the Farmed Environment. Those are highly innovative ideas and we need to ensure that whatever is introduced, we do not undermine them in any way. The Minister will be acutely aware of the concerns that exist in the run-up to the CAP reform. I am sure that the farming community frequently says to him, “Do we continue with the way we are? Do we continue with reapplying into the existing schemes, or do we drop out and keep our fingers crossed and hope?” I hope that the Minister will give clear guidance to the farming community about what it should be doing. Farmers should not lose out if they continue under the current systems until everything is decided.

The CAP’s well-intentioned greening proposals have received a fair bit of criticism because of some of the apparently negative consequences. We have talked about crop rotation and the rule that stipulates that 7% of land should be set aside for environmental gains. In previous debates, the one thing that we have learned is that when land is set apart, some of it can be of negligible biodiversity value. What we need to look at, based on what we have done in the UK and in other countries, is the best way to identify and manage those corridors or areas of ecology. I say to the Minister that what we do not want is for these well-intentioned greening proposals, which have faced some criticism from the environmental lobby as well, to undermine what is already there. On the flipside, some farmers have said to me, “That’s okay, we’ll find a way to work round it. We’ll identify the land that we can put within that 7%, and it will be no good for biodiversity, but we can do that. Or we can take what we are currently doing.” We do not want people to find ways around the proposal; we want this to be a positive measure in which the Minister can come back and say, “The way I will interpret this in the UK is for us to take this approach.” That will be much more positive, and will lead to the enhancement of our environment.

How has the Minister presented these proposals not only to the farming community but to environmental organisations? He needs to work with both groups together rather than separately. Our experience in government was always that the best way forward was to sit everyone down together and get an agreement. Some will want to pull in one direction and others in another direction. I talked about having a common UK position among the devolved Administrations. Equally, it is great to have a common position among green organisations, farmers and the agricultural community.

The proposals around the active farmer concept have received a lot of debate and discussion. I reiterate to the Minister our concerns about the businesses that have diversified—we encouraged diversification over successive decades—so that they do not look like they are spending 100% of their time on food production or farming. They may well be tested by this definition of active farmers, not least when we see the annual amount of direct payment being 5% or more of the total receipts obtained from non-agricultural activities in the most recent financial year.

As I have mentioned to the Minister before, agricultural firms can have very high turnovers but low or negative profit margins, and they can then be excluded from pillar one payments despite the fact that their business provides no real alternative income. I have also mentioned to the Minister large commercial organisations, such as the largest farming organisation that employs tenant farmers in the UK—the Co-operative Group. Co-operative Farms is a separate business, but it is a wholly owned subsidiary of the Co-operative Group, which operates in retail and banking. However, one cannot deny that the Co-operative Group is also farming actively in the UK, so we need to be very careful about how the EU proposals affect those companies and others.

The Chair of the Select Committee, the hon. Member for Thirsk and Malton and other hon. Members have asked how the concept of the active farmer affects organisations such as the Royal Society for the Protection of Birds, the National Trust and others that farm but do so in order to deliver environmental benefits. Very often, they provide good lessons in how to take the environmental agenda forward, but they are membership-based organisations and they have a wider core business than just farming. We need to ensure that the proposals do not impact on them.

There has been much debate about capping. Many financial analysts, including analysts outside farming, argue that because the proposed 30% environmental element of the single payment will be excluded anyway and because farm labour costs can be extracted under these proposals, the impact of the capping element could actually be negligible, with virtually no risk of subsidy capping or reduction in practice. However, to get to that point there will be Houdini-style contortions by many farmers and that is what we need to avoid. If it is simply an exercise in avoiding the impact of the capping element, perhaps we should argue to the Commission that it ought to just streamline or simplify it, and allow member nations subsidiarity to deal with how it works on the ground.

I just want to make a few more points to the Minister. The Commission’s CAP reform proposals allow a transfer of up to 10% of a member state’s pillar one national envelope to pillar two from 2014. However, I understand that there is no provision available for 2013, which will leave the UK with a significant gap in funding from 2013 to 2014. Perhaps the Minister could confirm that and, if it is the case, say what the Government intend to do about it. Will the Minister comment on the views of the RSPB and other NGOs that feel quite strongly that the agri-environment schemes should receive a larger share of the rural development budget in pillar two. How does he respond to that view? What are his thoughts?

The sugar industry in the UK has been in the press a lot recently because of its difficulties. What consideration has the Minister given to ending, within CAP reform, the sugar import barriers, so that British farmers such as Tate & Lyle, which rely on cane sugar supplies, can compete on an equal footing? What efforts is the Minister making to help young farmers to overcome the problems with the profitability of farming, and the problems of gaining access to capital? Gaining access to capital is not directly addressed in the CAP reform proposals, although there are some good proposals on young farmers. On a UK basis, however, I am repeatedly told about the difficulty that farmers experience in accessing capital, especially new entrants into farming.

I shall make two final points. First, will the Minister explain why these proposed reforms will continue to provide export refunds? That is a concern, not least because the EU itself made a commitment at the World Trade Organisation ministerial meeting in 2005 to phase out all those export subsidies by 2013. Secondly, as the Minister is aware, to improve farmers’ negotiating position in the food chain, producer organisations—the POs—and inter-branch organisations will now be expanded to cover all sectors. That is the trend, but the proposals do not appear in my reading of them to offer significant incentives for people to form those POs. Perhaps the Minister will explain how the proposals will work and how they can be improved, so that we get those incentives in place.

This has been a very good debate and a very good chance for many Members to air their thoughts to the Minister in a very constructive way. There have been lots of different ideas. We have time to improve these CAP proposals, but not a lot. I assure the Minister, as I have done before, that he will have Labour’s support to drive forward the right changes within the CAP proposals, so that they are good for the UK in so many ways—good for UK farmers, good for the sustainability of their livelihoods, good for food production and good for the environment—as well as being good for the EU as a whole and good in relation to our international obligations, not only in terms of food security but in terms of biodiversity, the environment and climate change. The Minister will have our support in that process, and once again I wish him the very best in his continuing negotiations.

[Jim Sheridan (in the Chair)]

I think the hon. Gentleman’s voice held out well there. In fact, it got stronger as he went on.

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[Miss McIntosh]

rose—

[Huw Irranca-Davies]

rose—

[Mr Paice]

Ladies first.

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[Mr Paice]

I have never suggested that agri-environment schemes will make the industry more competitive. I will come to that point later.

[Huw Irranca-Davies]

When the Minister enters the final stages of the negotiations, he will draw up a list of priorities with colleagues in the devolved Administrations —a top three, a top five, a top 10. If there is a feeling, as seems to be emerging from the devolved Administrations, that the transition from historic payments to more flat payments is a top priority, will he be mindful of that and ensure, if necessary, that it is one of the red line negotiating positions with the EU?

[Mr Paice]

I am very happy to address that. Indeed, I addressed it yesterday in the Scottish Parliament. I am not sure about red line issues. As the hon. Gentleman knows, there is no requirement for unanimity, so we can have a red line issue that stays a red line issue and not get our way. On key negotiations, I can assure him and the hon. Member for Banff and Buchan that we have made it absolutely clear that we think the Commission’s proposals for the shift to an area basis is too draconian. The 40% first-year drop is far too dramatic, and we will support the proposition that there should be a more gradual transition.

I shall move on to the greening issue. As other hon. Members have said, that is perhaps the most important subject—it has certainly grabbed the most headlines in the farming press and in debates. As the hon. Member for Ogmore said, to put it mildly, the greening situation requires a lot of improvement. There are three components. First, farmers with permanent pasture must keep it as such and must not be allowed to plough it. There has been grave concern—and, indeed, anecdotal stories—that some farmers have started ploughing such land because they do not want to be stuck with that obligation. I urge them not to do that because we can negotiate around it. Indeed, at the NFU annual general meeting three weeks ago, the commissioner said that he did not see a problem with farmers who wanted to reseed such land every 10 years. As long as we can get that commitment in writing, we have largely resolved the issue. So there is no justification for farmers to consider ploughing up permanent pasture.

The second issue that has been debated is the requirement for a three crop rotation. My hon. Friend the Member for Camborne and Redruth (George Eustice) properly identified one of the nonsensical issues with that. A further issue with a three crop rotation is that very large numbers of dairy farmers, particularly those with outdoor stock farms in the hills, will grow a field of turnips, maize or barley to feed their own stock. It is clearly nonsensical for them to have a three crop rotation. We have made that point to the Commission repeatedly. I hope that we can get somewhere, but we will have to wait and see. I assure hon. Members that we have pressed very hard on that subject.

The third part of the greening proposal is, of course, the 7% ecological focus area. The commissioner has said repeatedly in Council meetings that he is not trying to reintroduce set-aside. However, one has only to listen to the language of this debate to realise that that is how the matter is perceived. The commissioner has said that someone will be able to count their hedges, ditches and I think that I even heard him say tracks—in other words, what someone has not got in production—and take out some land to get to the 7% if they have not got enough out already, as will be the case with most farmers. If farmers are fortunate enough to have perhaps a piece of woodland, they may well already be up to their 7%.

The Government consider that taking land out of agriculture, when, as hon. Members have all said, we need to increase production, is clearly wrong. However, there is a more fundamental problem with ecological focus areas. I have used the phrase that this is about trying to reach down to the lowest common denominator—the thing that most farmers will be able to meet without having to do anything—and that if they really have to, they might have to take a little bit more land out of farming.

The British Government take the view that we need to be far more active. Several hon. Members have rightly referred to our stewardship schemes. Such active management is far more important. There is plenty of science to demonstrate that, in terms of environmental care, biodiversity, water retention or whatever, active management of a small area of ground can deliver far better results overall than simply watching—for want of a better word—the 7%.

I will come back to the comments made by the hon. Member for Brent North in a moment before he leaves because I want to talk about his remarks on engagement. We are working very closely with a number of other member states to develop a proposal of what we might call equivalence measures: a menu of different options that member states can choose from, all of which have an environmental equivalence in quality terms. The commissioner has already made some good noises about appreciating the concept of equivalence, but he still seems to equate it with quantity rather than quality. That still concerns us.

--- Later in debate ---

[Mr Paice]

I am grateful to the hon. Gentleman.

I have two further short points to make about greening. First, it is a good example of something where one size does not fit all. Others have used the same phrase; we have used it regularly in Brussels. We have tried to persuade Commissioner Ciolos that he needs to accept that, as my hon. Friend the Member for Tiverton and Honiton (Neil Parish) said, there are a vast range of farm sizes, types, soils, topographies and so on across the EU. The rigid three-legged stool that the commissioner has invented for greening the CAP is too inflexible to meet all those needs. I fear that, as I suggested earlier, he is simply trying to deliver something that most farmers could achieve.

[Huw Irranca-Davies]

Equivalence is a welcome development. Although, understandably, the focus of the UK negotiating team will be very much on how it will apply here, what work are they doing about ensuring that equivalence is not used as an excuse in other member nations for avoiding delivering those environmental goods? We must refer to that moral duty to try to raise the level throughout the EU, which is where the greening measures are probably intended to impact most heavily. What work is the Minister doing to ensure that equivalence raises the floor and is not used as an excuse for abdicating any responsibility for the measures?

[Mr Paice]

The best answer I can give the hon. Gentleman is to point to what the Commissioner said at the NFU conference a few weeks ago, which I have already mentioned. He said that people in Britain are the “champions”—that was his word—of environmental conservation, stewardship and so on, and he did not want to penalise us. Therefore, we are using our own experience as the benchmark. We will be pressing the fact that standards need to be raised, rather than reaching down to the lowest common denominator, as I have suggested. My phrase “equivalence” is not about whatever is down at that level; it is about what is at a higher level and trying to raise concern for the environment and so on across the whole of the EU, including in those member states where lip service is barely paid to the matter.

I shall make a final point on greening. I should have mentioned this earlier as it was raised by several hon. Members. I have said publicly in writing in many places that any British—sorry, I meant English farmer in this context, although there will be similarities in the rest of the UK. Any English farmer who is either in a stewardship scheme or who is considering renewing or entering one need not be concerned about any changes that may come. I have said clearly that if—we hope that this will not happen—the outcome of the negotiations are to someone’s detriment, we will allow them to opt out at that stage with no penalty. I cannot be clearer than that; that is absolutely the case.

A number of Members referred to capping. Capping is, first of all, anti-competitive and does not stimulate businesses to grow. It will give the wrong message to the industry, which we want to be competitive. Secondly, in its proposed form, we think that the capping is quite bureaucratic. Bringing labour costs into it will complicate the process, which is completely opposite to the direction in which we wish to go. Thirdly, as the hon. Member for Ogmore said, there will be a great deal of business for lawyers in trying to find ways around it. When the hon. Gentleman referred to the Co-op, he also inadvertently put his finger on the fourth point to consider—corporate structures. Many of our largest farms operate under a corporate structure, which means that the issue of whether we break them down then comes into play.

That leads me to the closely linked issue of active farmers. The Commission’s proposals for active farmers are twofold. First, farmers should be actively farming—doing the job—and I will come back to that. The second aspect, which has caused the most concern, is the idea that the classification should be based on a proportion of farmers’ total income that subsidy comprises. That again falls foul of the corporate structure argument, because farmers may have businesses in a number of different corporate structures. Secondly, it prompts the scenario—the nightmare, almost—of having the Rural Payments Agency’s computer talk to Inland Revenue’s computer to establish whether someone’s non-farm income is at a specific level. Again, that is a non-runner in terms of implementation.

However, we have great sympathy with those who believe that the money should go to the people who farm the land. That touches on the question asked by the hon. Member for Ogmore. If they are tenants, the money should go to them. Under whatever form of tenancy, management or contract farming arrangement, the money should go to the business that controls the land. That is the way in which the system should operate.

That brings me back to the point made by the hon. Member for Banff and Buchan about the issue of slipper farmers in Scotland. Again, we understand that problem entirely, and we will do our best to find a way through it. It will not be easy, but it is important to ensure that people are doing something on their land before they receive any money. Whether the solution to the problem is that proposed by the Scottish National Farmers Union, namely, a minimum stocking rate—the problem tends to be associated with that sort of land—or another mechanism, I assure hon. Members that we will try to find a way forward.

A few Members spoke about the young farmers’ proposals, but, again, this is another example where one size does not fit all. The Commission’s proposal is simply that if young farmers—I say “young”, but new entrant young farmers can be up to 40 years old—have some entitlements, they will be able to get a 50% premium on them for a certain number of years. That would represent a small increase in their income, but it would bear no relevance to the size of the business and, as the hon. Member for Banff and Buchan pointed out, it would ignore the fact that they probably would not have any entitlements anyway, because of how the system operates. Virtually every Minister at Council agrees that we should help young farmers; there is no debate about that. However, it should be left to individual member states to decide the best way forward, which is how we address the issue of access to capital.

No one mentioned this afternoon the Commission’s proposals for small farmers. The only reason why I want to mention them is that the Commission is proposing that small farmers could opt for a small farmers scheme, in which they fill in a form and get the money with no questions—I will not go quite so far, but that is the impression as to the proposal. The key thing about the Commission’s proposal is that small farmers will be exempt from the greening requirement, which we oppose. We are quite happy with the idea of a simplified scheme for small farmers, as that makes sense, but to exempt them—and we are talking about a massive swathe of farmers across Europe— from the fundamental greening obligations facing other farmers would be wrong.

There was a lot of discussion about pillar two. The Government’s position, which has not changed since we took office, is that we would like to see a bigger share of CAP funds put into pillar two, and that any reduction in the funding should primarily be at the expense of pillar one. We believe that, because through pillar two it is possible to make targeted payments for public goods, whether they are existing ones or new ones that we can develop under the ecological assessment that DEFRA published last year. For example, we could start to fund farmers in the hills for what they do for water or carbon retention. That is how one could target payments through pillar two.

The hon. Member for Ogmore asked me about agri-environment taking a bigger share of pillar two, but given that it takes more than 80% now, I am not sure that it should take an even bigger share, because—I come back to answer the question asked by my hon. Friend the Member for Thirsk and Malton—of competitiveness. We believe that pillar two is the best way of enhancing competitiveness, and we have already started to do that. In the past few months we have launched three different schemes in the existing rural development programme for England to fund, grant-aid and help farmers and other rural businesses to invest for the future. That investment may be in plant. For example, there will be £20 million, which I announced—I hope I have announced that; I think I have just announced it; I just have, if I had not.

[Huw Irranca-Davies]

Tweet it.

[Mr Paice]

Yes.

We will have a £20 million scheme for skills and training. My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs announced last week £60 million for large schemes, and I have previously announced another £20 million for smaller schemes of up to £25,000. That is how one can help farmers to become more productive and competitive, to work together, develop new skills through the training funding and face the big challenge lying ahead.

As for the Commission’s other proposals that have not been discussed much, we are quite happy to see market support remain as an instrument, whether it is intervention or private storage. However, it has to be right down at safety net level; it must never again become part and parcel of the marketing structure, which is what it became in the ’70s, ’80s and ’90s, when people were openly producing just to go into intervention. It was madness, and those days must never return.

Linked to that, the Commission is proposing a global crisis fund, about which we have some reservations. Our biggest concern is that the Commission is proposing that it should be outside the budget. We do not support off-budget measures, and if the Commission is to have such a fund, the fund must come within the budget. That applies equally to the proposals on risk management.

We believe that research is central to the issue of competiveness and improving the industry’s ability to compete and become more sustainable, a key point highlighted this afternoon. We therefore support in principle the Commission’s doubling of the money for research and the development of the European integration partnership, although we need to see more about that.

I will now try to pick up points raised in the debate. Several hon. Members, including the hon. Member for Banff and Buchan, talked about regulation, and my hon. Friend the Member for Tiverton and Honiton kindly referred to the work that we have already done on that. The hon. Member for Ogmore is right to say that not every regulation is bad. What we have tried to do through the Macdonald process—we have discussed this and Richard Macdonald has been to the Commission to promote his proposals—is not to say, “We just have to get rid of regulations”, but to look at how we implement and enforce them in a way that causes minimum burden on business while achieving the standards that we are trying to achieve. We will continue to press that approach.

We have said over and over again that the groceries code adjudicator is the responsibility of the Department for Business, Innovation and Skills, but I am hopeful that the relevant Bill will be introduced shortly.

[Huw Irranca-Davies]

The Minister has expanded on many points, for which we are grateful.

One of the things that we and successive Governments often struggled with was the complexity of the EU and its machine. Regulations will come from the least expected direction. They may not come from the Agriculture Committee. They may come from the Environmental Committee, from somewhere else, or, nowadays, from other parts of the institution entirely. In light of the MacDonald proposals, has the Minister or the Department developed anything about that early warning system where, at the earliest possible moment, it is flagged up that it might arrive on the Minister’s desk in five or six years’ time from the least-expected direction?