Draft Market Measures (Marketing Standards) (Amendment) (EU Exit) Regulations 2019 Draft Market Measures Payment Schemes (Amendment) (EU Exit) Regulations 2019 Draft Market Measures (Miscellaneous Provisions) (Amendment) (EU Exit) Regulations 2019

Robert Goodwill Excerpts

Monday 25th March 2019 General Committees

[The Minister for Agriculture, Fisheries and Food (Mr Robert Goodwill)]

I beg to move,

That the Committee has considered the draft Market Measures (Marketing Standards) (Amendment) (EU Exit) Regulations 2019.

[The Chair]

With this it will be convenient to consider the draft Market Measures Payment Schemes (Amendment) (EU Exit) Regulations 2019 and the draft Market Measures (Miscellaneous Provisions) (Amendment) (EU Exit) Regulations 2019.

[Mr Goodwill]

As a farmer, I mention my entry in the Register of Members’ Financial Interests. The matters in these statutory instruments are closely related, and I thank the Committee for expediting matters by considering them together.

The instruments amend retained EU law and domestic legislation, setting down the detailed rules for the common organisation of the markets in agricultural products, to ensure their smooth transition into a domestic regime. They are distinct from the instruments being debated in the House tomorrow that amend the overarching framework legislation for those detailed rules. The amendments in the instruments will maintain the effectiveness and continuity of retained EU law and domestic legislation that would otherwise be deficient following our exit from the European Union. They will ensure that the transition from a regime governed primarily by EU law to one governed by domestic law causes minimal disruption for businesses and stakeholders.

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

The Minister talks about making sure that domestic law and the provisions of the statutory instruments do not make problems for businesses, but the Quality Standards for Green Bananas (England and Wales) Regulations 2012 are one of the measures that the statutory instruments tackle. Can he assure us that he will not allow the example of bendy bananas being ruled out from sale to continue when we have our freedoms, and that the statutory instruments do not lock us into the wrong regulations?

[Mr Goodwill]

I am tempted to speculate, as some newspapers in this country did, about EU regulations on bendy bananas, but much of that was wide of the mark. Bananas are exported in their green state and turn yellow as they approach the market. If one keeps them for too long, they turn brown. As part of our policy on minimising food waste, if anyone would like Mrs Goodwill’s recipe for banana bread, I would be more than happy to provide it. There are regulations in place to ensure that consumers are not sold produce that is below the standard. The shape of a banana has little relevance to the eating quality, except where some diseases of bananas cause abnormal curvature. I did my banana homework before we started.

This legislation is technical in nature and limited in scope. We are upholding standards and maintaining processes. This instruments make appropriate corrections to ensure that the standards and processes continue to operate in a UK context. Where changes are required, we have endeavoured to ensure that they will have limited impact on businesses and other stakeholders. We have consulted extensively with the devolved Administrations on the instruments to ensure that the legislation on the common organisation of agricultural markets continues to work, while respecting the devolution agreements.

Two of the instruments under debate—the draft Market Measures (Marketing Standards) (Amendment) (EU Exit) Regulations 2019 and the draft Market Measures Payment Schemes (Amendment) (EU Exit) Regulations 2019—apply across the UK and operate in areas of devolved competence, with powers being transferred to the devolved Ministers. In many cases, the Secretary of State is able to act on behalf of the devolved Administrations, should they give their consent.

However, in some circumstances, that does not apply to Wales. Due to certain provisions specific to the Welsh devolution settlement, allowing the Secretary of State to act on behalf of Wales in certain instances would have implications for Wales’ devolved competences. The Welsh Government have carefully considered whether the Secretary of State should be able to act on their behalf in respect of each of the functions concerned, and the drafting of the instruments reflects the outcome of that consideration.

The draft Market Measures (Miscellaneous Provisions) (Amendment) (EU Exit) Regulations 2019 amend a suite of domestic statutory instruments and have the same territorial application as the regulations they amend.

The draft instruments concern the common organisation of agricultural markets, more commonly referred to as the CMO. The CMO sits in pillar 1 of the common agricultural policy alongside direct payments, and was set up as a means of meeting the objectives of the CAP—in particular, to stabilise markets, ensure a fair standard of living for agricultural producers and increase agricultural productivity. Over time, it has broadened out to provide a toolkit that enables the EU to manage market volatility, to incentivise collaboration between, and the competitiveness of, agricultural producers and to facilitate trade.

The three draft instruments relate to the UK’s marketing standards regime, some payment schemes operated under CMO rules and miscellaneous amendments that provide for the enforcement of marketing standards and scheme rules. The draft Market Measures (Marketing Standards) (Amendment) (EU Exit) Regulations 2019 amend a suite of EU regulations that lay down marketing standards and related rules for bananas; beef and veal; carcase classification; fruit and vegetables; hops; milk, milk products and spreadable fats; and pigmeat. Marketing standards, as enforced under the CMO, are designed to ensure a stable market for agricultural goods by enforcing even standards for certain agricultural goods, preventing the market from being flooded with cheaper, substandard goods. I hasten to add that that does not prevent the marketing of wonky vegetables, the sale of which I applaud as a way of reducing food waste.

However, I draw one point to the attention of the Committee. It has come to my attention that a small number of provisions in the marketing standards regulations will require minor amendments, as a result of changes made by the EU to regulation (EU) No. 543/2011, which relates to marketing standards for fresh fruit and vegetables. The changes were published in the Official Journal last week and are due to come into force before exit day. We will make a new statutory instrument to amend the draft instrument to reflect the changes and both instruments will be made together. This will ensure that our regulations link correctly to retained EU law as it is on exit day. I stress that that is not due to a mistake on our part; the EU has made changes that we need to catch up with.

The marketing standards regulations aim to minimise disruption to the flow of goods while preserving standards, and to make marketing standards legislation appropriate to the domestic context of the United Kingdom after EU exit. The amendments in the draft instrument are designed to be as minimal as is practicable in order to prevent wastage and reduce the burden on producers, but as robust as required to ensure that UK consumers can be confident that product information is transparent and accurate.

The draft Market Measures (Miscellaneous Provisions) (Amendment) (EU Exit) Regulations 2019 amend a suite of domestic statutory instruments that provide for the enforcement of EU marketing standards in beef and veal labelling in England; carcase classification and price reporting in England; the quality of green bananas in England and Wales, as we have touched on; olive oil marketing standards in the UK; marketing of fresh horticultural produce in England, with some general provisions for the whole of the UK; certification of hops in the UK; milk price reporting in England and Northern Ireland; and the school milk scheme in England and Northern Ireland.

As far as is possible, existing requirements have been maintained. Where necessary, changes have been made to correct deficiencies arising as a result of the transfer of EU legislation into domestic law. For example, requirements to report to the EU or to allow a representative of the European Commission to attend inspections have been removed or replaced, as appropriate, with domestic equivalents. Criminal offences relating to the import and export of fresh horticulture and hops have been amended to reflect that the EU will become a third country on our exit.

The draft Market Measures Payment Schemes (Amendment) (EU Exit) Regulations 2019 amend EU regulations that lay down detailed rules for rice processing; information provision and promotion measures; and public intervention and aid for private storage.

The draft statutory instruments make appropriate amendments to existing EU legislation to ensure that the legislation governing the CMO and agri-promotions can operate effectively after EU exit. That includes making technical changes to remove or replace references to EU institutions, as well as omitting certain provisions that will be inoperable once the UK has left the EU.

[Luke Graham (Ochil and South Perthshire) (Con)]

My right hon. Friend is talking about several measures that will affect different parts of the United Kingdom. Will he confirm now or later in writing how the measures will overlap with the overall UK framework? Even though certain certifications and marketing standards may be devolved, we want to ensure consistency for consumers, so that they can be confident of getting the same quality of product, whether in Scotland, Wales, England or Northern Ireland.

[Mr Goodwill]

I reassure my hon. Friend that these measures—I am reluctant to describe them as changes, because nothing is really changing, other than the UK becoming the competent authority, rather than the EU—will have no impact on the devolution settlement; any measures that are devolved at the moment will continue to be devolved. There is no threat to that situation. In fact, we wish to build on our excellent devolution process. Only today, I met the devolved Administrations, with Fergus Ewing representing the Scottish Government.

[Mr Jayawardena]

I thank my right hon. Friend for giving way again. I am sure he will correct me if I am wrong. As well as giving us his wife’s banana bread recipe, which I am sure is excellent, will he inform us when the Department might review the application of the draft instruments? As he said, no changes are proposed today, but it might be right to make changes in the future.

[Mr Goodwill]

My hon. Friend gets to the absolute crux of why people voted to leave the European Union. With the freedoms given to us, we will be able to review these measures in the future. Indeed, the Agriculture Bill, when it becomes an Act, will give us further powers to modify and innovate across a variety of areas to ensure that we have policies tailor-made for UK situations, rather than the often one-size-fits-all policies on the EU statute book.

[Mr Jayawardena]

When?

[Mr Goodwill]

The first good step will be to get the withdrawal agreement across the line. Indeed, I encourage all Committee members not to miss their third opportunity—they have had two already—to ensure that we deliver on the result of the referendum.

An example of an omission from the current regulations is the requirement to notify the EU; there seems little utility in mandating the Secretary of State to tell himself what he already knows. To pre-empt a question that I am sure right hon. and hon. Members will wish to ask: yes, the draft instruments will be needed if we agree a deal with the EU, as well as in a no-deal situation. They make operability amendments that will be necessary for retained EU law to function effectively and to maintain the integrity of our statute book, either at the end of an implementation period or sooner, if we leave the EU without a deal. If Opposition Members are worried about the damaging effect of no deal outlined by organisations such as the National Farmers Union, the remedy is to vote for the deal. I know that some Opposition Members have already shown exemplary wisdom in that regard.

The draft instruments make necessary changes to ensure that there will be an operable legal framework for marketing standards; that those marketing standards can be enforced; and that certain CMO payment schemes operate once we have left the European Union. The changes uphold our standards and maintain continuity for businesses and stakeholders.

--- Later in debate ---

[Mr Goodwill]

I thank hon. Members for their contributions. What will hopefully be clear is how producers and consumers are well served by passing the instruments, which will make operable retained EU law and domestic legislation on the organisation of agriculture markets to protect standards and our vital farming sector.

The draft Market Measures (Marketing Standards) (Amendment) (EU Exit) Regulations 2019 make operability changes to a suite of EU regulations laying down marketing standards and related rules for the seven areas: bananas, beef and veal, carcase classification, fruit and vegetables, hops, milk, milk products and spreadable fats, and pigmeat.

The draft Market Measures (Miscellaneous Provisions) (Amendment) (EU Exit) Regulations 2019 make the appropriate amendments to ensure operability for a number of domestic statutory instruments that provide for enforcement of EU rules for marketing standards for fresh horticultural produce, beef and veal labelling, carcase classification, green bananas, olive oil, and hops, as well as for enforcement of the rules of the school milk scheme and for reporting prices of milk and milk products.

The draft Market Measures Payment Schemes (Amendment) (EU Exit) Regulations 2019 make appropriate amendments to EU regulations laying down detailed rules for the three areas of public intervention and aid for private storage, measures to promote agricultural products, and conversion rates for rice. The amendments will ensure that the legislation can operate in a domestic context.

A number of points were raised during the debate, which I will refer to briefly where they are relevant to the measures. The hon. Member for Ipswich seems to still be fighting the last referendum campaign. Although leaving with no deal would deliver for the 52% who voted to leave, I believe that the deal that the Prime Minister has produced is a deal that delivers for everybody and that we should all get behind. He mentioned that it was technical in nature, but the changes are simple; they merely take account of the fact that we will be leaving the European Union. Indeed, when we have left the European Union, we will be able to change things if we want, as the right hon. Member for Don Valley said, because we will be an independent nation. It sounds as if the hon. Member for Ipswich would like to stay in the European Union and not be given the freedoms that the British people voted for.

If we choose to align with EU standards, for example on carcase classification, that will be our choice. Indeed, companies in the UK are well used to exporting to markets around the world and can meet the specifications required in a whole range of countries, so there is no reason why we cannot make changes ourselves, should we wish. I repeat, however, that the amendments do not make changes to the regulation.

The hon. Member for Ipswich mentioned consultation. We had some consultation. We carried out targeted stakeholder engagement on the instruments relating to the CMO in November 2018, engaging stakeholders with a particular interest in the areas covered by the instruments. The stakeholders did not raise any significant concerns, and responses were mostly seeking to clarify issues of policy. We acknowledge the responses from stakeholders and thank them for their comments. Some stakeholders asked DEFRA to consider longer transitional periods for proposed labelling changes. We took their comments on board and provided for longer transitional periods.

The right hon. Member for Don Valley said that the measures before us ensure that we do not fall off a cliff edge. The measures will be relevant whether we have a deal or a no-deal situation and will ensure that business can carry on as usual. The hon. Member for Ipswich was talking about how everything that comes out of Europe seems to be fantastic and how we sign up to everything, but I respectfully remind him that the United Kingdom was held back in a number of areas when we moved on animal welfare. We banned dry sow stalls and veal crates and we took a number of measures on battery hens. We legislated ourselves, but we found that our markets were eroded by others not moving in the same direction. We have been held back in some ways by the EU.

To those who say that the Government will not maintain standards, I say that agricultural food standards in England are already very high, as they are consumer and retailer-led. They often go over and above the current standards set by EU legislation. For example, in the hops sector, brewers have the ability to set the standards they require from their suppliers, and those are often above the minimum EU standards. There is no desire for standards to be lowered for domestic or imported products.

[Caroline Flint]

The Minister makes an important point about standards. I absolutely agree that in many respects, we have been ahead of the European Union. We could go further, particularly in the transport of livestock, which is another area that could be improved. I take this opportunity to say that my hon. Friends on the Front Bench have confirmed that we have not objected to as many SIs as I perceived. We have agreed to hundreds and hundreds of SIs and changes. For the most part, Labour has agreed with the transposition of the regulations, and I wanted to correct the record on that.

[Mr Goodwill]

I thank the right hon. Lady for those comments. In many ways, the Labour party has not stood in the way of such measures as the ones we are considering. However, the Labour party has stood in the way of the big one: the Brexit deal. Many Labour Members have voted against the deal, meaning that we cannot make progress in moving to the situation where we can make those changes, for which the regulations are the preamble.

The hon. Member for Argyll and Bute raised the sensible and reasonable point of what happens if we make mistakes. Well, we will fix them. As the changes are small and technical, it is unlikely there will be any major mistakes. As I have said, we have already picked up something where the EU had moved and the numbering of particular articles in the schedule had changed because a few were added at the top. He is absolutely right that under a no-deal situation, the tariff regime would be very difficult for the sheep markets. Tariffs in the region of 40% would be difficult for sheep farmers not only in Scotland, but elsewhere in the United Kingdom, given that we export 30% of our lamb. In particular, the carcases that tend to go on to the EU market are the small hill carcases, such as those produced in his constituency. Once again, the message is clear: vote for the deal so that we will not have a no-deal Brexit and so that we can negotiate a long-term farming agreement.

The hon. Gentleman mentioned the plight of hill farmers. I am not a hill farmer—we grow grain on some wonderful lowland areas—but I know from my constituency how tough it is being a hill farmer. The measures in the Agriculture Bill seek to switch aid from direct payments for production or for just being a farmer to public goods. I would argue that the public goods that hill farmers are delivering in terms of the wildlife and the environment—the walls, the hedges, and all those other features—are just the sort of things that Scottish farmers would want to grasp with both hands. It is disappointing that the Scottish Administration are perhaps not taking the same line as we are. When British taxpayers’ money goes into agriculture in the future, we will no longer be able to rely on French farmers burning tyres in the road and marching up the Champs-Élysées to protect farmers’ support. Under the Agriculture Bill regime, if Governments were to suggest cutting agricultural support, people would be writing to their MPs asking about the hedgehogs, the badgers, the bumble bees, the hedges and all those other features—those public goods—that the money will support. I hope that Scotland will be late arrivals at the Agriculture Bill ball, and join in on what I believe will be revolutionary changes to how we support agriculture, in a way that the general public as well as farmers will welcome.

The technical and operability amendments made in the regulations will maintain the effectiveness and continuity of the CMO legislation, which would otherwise be inoperable following our exit from the European Union. They will ensure that we can continue to operate schemes under the regulations for our vital farming sector, and maintain the standards they set, which support confidence in our farmed goods on domestic and international markets. I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Market Measures (Marketing Standards) (Amendment) (EU Exit) Regulations 2019.

Draft Market Measures Payment Schemes (Amendment) (EU Exit) Regulations 2019

Resolved,

That the Committee has considered the draft Market Measures Payment Schemes (Amendment) (EU Exit) Regulations 2019.— (Mr Goodwill.)

Draft Market Measures (Miscellaneous Provisions) (Amendment) (EU Exit) Regulations 2019

Resolved,

That the Committee has considered the draft Market Measures (Miscellaneous Provisions) (Amendment) (EU Exit) Regulations 2019.—(Mr Goodwill.)