The Minister for Agriculture, Fisheries and Food (George Eustice)

- Hansard -

Copy Link

- - Excerpts

Apologies, Sir Roger: there is quite a large number of amendments in this group, and I am just finding my way to amendment 46. This is another attempt to replace the word “may” with “must”. Again, the argument is that the use of the word “may” is wrong. The Agriculture Act 1947 has not been referred to at all today, and I know that the hon. Member for Stroud likes it a great deal, so let me try this quotation:

“Where…it appears to the appropriate Minister expedient so to do, or if it appears to him otherwise expedient so to do in the public interest, he may by order fix or vary any such price”.

Even provisions in the 1947 Act, in this case relating to deficiency payments or a price support mechanism, use “may”.

The important thing to note about all these sorts of powers is that, by definition, there is a wide element of discretion. We are talking about dealing with crisis scenarios. The aim is not to intervene routinely all the time but to intervene expeditiously and in a fleet-of-foot way when a crisis needs to be addressed. The wording we have used in the clause and in many other areas in this part of the Bill is largely borrowed from what currently sits in EU legislation. The European Union also has discretionary crisis powers for exceptional circumstances, and its wording and approach are similar to what we have here, and, indeed, what we have here is similar to what we had in the 1947 Act.

Amendment 97 would add an additional definition of “exceptional market conditions”: if, on the day the United Kingdom leaves the EU, it is not in a customs union, that, of itself, should be an exceptional market condition. The hon. Member for Darlington comprehensively set out her views on these matters. I do not want to drift too far into the debate about customs unions, because we will have hours and hours of fun in the months ahead debating the agreement that comes back before Parliament.

However, we do not have to be in a customs union with the EU to avert a so-called exceptional market circumstance. We have been clear that we want a comprehensive free trade agreement and, crucially, a customs agreement—although not a customs union. We also seek a transition period. We are clear, as a Government, about what we seek in this negotiation, which is in its closing stages.

George Eustice

- Hansard -

Copy Link

- - Excerpts

Yes, I can. If the hon. Lady reads the proposal that came out of Chequers, she will see that a customs agreement is one that allows us to strike trade deals with the rest of the world and in which we would collect and process, on behalf of the European Union, the duty due on goods destined for the EU.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I will not, because, as I said, I want to deal with the substance of the clause.

The Government are clear about our approach to getting in place a new free trade agreement and a partnership. However, there are several other flaws with the amendment. First, we have to bear in mind that the impacts of a no-deal Brexit will vary from sector to sector; it is not possible to determine exactly what they will be. For instance, we know that the sheep and barley sectors export quite a lot of their goods to the European Union. However, we are net importers in virtually every other sector, so although there may be an impact on sheep, there would almost certainly not be on beef, because there will be less import competition.

I do not think it is wise to put this proviso into the Bill. The reality is that, if the terms on which we left the European Union—be that with no deal or any other circumstance that led to restrictions on trade—led to a severe disturbance in the agricultural market, and if that disturbance threatened to have a significant impact on agricultural producers, the power is already there to act. We do not need to artificially bring a current debate around the customs union into a Bill that is built to last for the long term.

George Eustice

- Hansard -

Copy Link

- - Excerpts

The issue in all those circumstances is less about the customs union and more about border inspection posts. That is why we have outlined in our approach a commitment to a common rulebook on those areas that require a border inspection, so as to reduce or even eliminate the need for border checks, and then an agreement on equivalence in other areas of legislation. So the border issue is less about customs.

Let me give another example. Scotch whisky is currently our most successful export, and yet it is always sold as a bonded product in an individual national market, because you have different alcohol duties in national markets, even within a single market. We already have examples of some of our most successful exporting sectors having no problem at all dealing with variable tax rates within a market.

George Eustice

- Hansard -

Copy Link

- - Excerpts

My hon. Friend is absolutely correct. In the agri-food sector, as in most other sectors, our trade with the rest of the world is growing far faster than our trade with the European Union.

George Eustice

- Hansard -

Copy Link

- - Excerpts

That is the case with a number of other things that we import from other countries, including Iceland, which we import a lot of fish products from. We have ways of dealing with these issues.

As I said, the approach that we have adopted with the common rule book and the customs agreement will address those issues.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I will not give way. With these interventions, a number of Members are giving the impression that they would rather be in the main Chamber taking part in the EU debate than in a debate about future farming policy.

The purpose of this amendment is to define not being in a customs union as being a crisis in and of itself. That is absolutely wrong, because we can have a highly successful partnership and trade agreement that does not require us to be in a customs union with the European Union. Many nations in this world are not in a customs union with the European Union.

George Eustice

- Hansard -

Copy Link

- - Excerpts

There are many successful economies in the world that are not in a customs union with the European Union.

I come back to my point: if as a consequence of the agreement—or indeed of there being no agreement—with the European Union, there are market disturbances that have an impact on agricultural producers, the power is there to act. There is no need to try to define additional powers in the way that this amendment does.

Amendments 117 and 123 seek to downgrade the test from a severe market disturbance to a significant market disturbance. It is wrong to lower the threshold in that way, for reasons I want to explain. We had evidence from one of the academics that suggested we needed something akin to the old deficiency payments system in that famous 1947 Act. The world has moved considerably since that point, and in many sectors we are seeing the development of viable futures markets to help farmers manage risk. In some countries—notably the US, in places such as Chicago—they put in place legislation to deliver the transparency needed to get a functioning futures market that enables farmers to defend themselves against price fluctuations.

We also have some interesting projects being developed in the UK. We are world leaders in issues such as agricultural insurance. There are some interesting projects on forming mutual funds—effectively, mutualised risk insurance models—that help farmers to insure their margin and protect a given quantity of milk, for instance, at a given price. Moving these powers away from just intervening where there is catastrophic risk, and away from a “severe” to some sort of “significant” disturbance, is the quickest way to snuff out the development of those private futures markets and risk management models.

George Eustice

- Hansard -

Copy Link

- - Excerpts

We are adopting an approach to agriculture policy that is all around investing in farmers to help them reduce their costs to improve their profitability and to reward them for the work they do for the farmed environment. Part four, starting with clause 17, which we are debating now, is all about intervention powers in exceptional circumstances. We have deliberately not defined what those are because there should be a strong element of discretion here, and the Government have to be able to move, decide and act in an expeditious way to tackle a crisis.

The hon. Member for Darlington mentioned this morning what sort of circumstances these powers might be used in. Bearing in mind that they have largely been borrowed from existing EU provisions, we know when the EU has used powers of this sort. For instance, it was possible when we had the dairy crisis in 2015 and prices slumped for a long period during the latter part of that crisis, for the EU to fall back on these exceptional intervention powers to make grants and payments available to farmers to reduce their production. That is the kind of example where it would be absolutely appropriate to use these powers. However, there are other times when we have short-term fluctuations in the market, and when it would not be appropriate to use the powers.

George Eustice

- Hansard -

Copy Link

- - Excerpts

If that crisis in a third country led to a market disturbance here that had an impact on our producers, then yes, the power is there to do so. There is wide discretion in how this power could be used. In practice, the reality here is that when we have a crisis, we know what will happen. The Minister of the day will have representations from Back-Bench MPs who have met their farmers and he will have to make a judgment about whether this warrants declaring that exceptional market circumstance and taking action thereafter to address it.

This is a wide discretionary power, but I am certain Parliament will be plugged in to advocating that we should declare this exceptional market circumstance and act. It is right we enable it to be a flexible power that can be used in emerging crises that we cannot yet predict.

George Eustice

- Hansard -

Copy Link

- - Excerpts

No, I do not think we are. We are largely replicating what already exists. It is already the case that if there was a crisis in the US, and the US intervened but the European Union chose not to, there would be some disparity—

George Eustice

- Hansard -

Copy Link

- - Excerpts

We should deal with the situation in our market. The test we should apply before acting is whether there is a severe market disturbance that affects our agricultural producers. We should not be worrying about what other countries happen to be doing.

George Eustice

- Hansard -

Copy Link

- - Excerpts

In all international trade law, there are provisions on dumping—it is literally referred to as “dumping”—that enable us to restrict imports from other countries where under-priced, under-valued produce was being dumped in our market. That can therefore be dealt with elsewhere.

George Eustice

- Hansard -

Copy Link

- - Excerpts

No, because we export and have some subsidies for our farmers. We have a range of different approaches that we can take to—[Interruption.] We are moving away from subsidies. We will support farmers in a different and better way. We will reward them for what they do for the environment.

I return to clause 17, not clause 1, which we debated earlier. Amendment 122 would broaden the scope of this exceptional market conditions power to enable the Secretary of State also to consider the costs incurred in production. This is neither necessary nor wise. We want this power to be aimed at markets, as it is now, and applied where there is a market disturbance, not necessarily where there is an increase in the cost of production.

The point about agricultural input costs is that there is a strong link between the main input costs, and the cost of oil, movements in exchange rates and weather events, and that also has an impact on output values. Typically, if the cost of animal feed rises, the value of the animal also rises, either because exchange rates, the price of oil or a weather event has driven it in that direction. That linkage is a natural hedge against the cost of inputs.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I do not accept that. We learned from the exchange rate mechanism crisis in this country that floating exchange rates work, and work for our economy. The ERM caused a deep recession in this country, and it was only by leaving it and allowing our currency to float and find its correct value that we saw that boom. We know that the existence of the single currency eurozone is throttling growth in countries such as Italy and Greece and causing massive unemployment, particularly youth unemployment. We know, too, that, since the referendum result, sterling has eased back against the euro, which has led to the biggest boost in farm incomes for more than a decade. In the two years since the referendum decision, farmers have benefited from the pound’s slightly softer rate against the euro.

On the amendments, I believe that the issues have already been addressed or that they seek to constrain or fetter the discretion in the power, so I hope that the Opposition spokespersons will not press them.

George Eustice

- Hansard -

Copy Link

- - Excerpts

It is important to note that amendments 47 and 82 are to some extent antagonistic. On amendment 47, as the shadow Minister said, we have debated the issue of “may” or “must” on many clauses. I simply reiterate that having that power conveyed through the term “may” is how comparable legislation is drafted and is the approach we take. In addition, in this instance, there is another reason why “may” is absolutely the appropriate word to use rather than “must”.

The hon. Member for Stroud should read the clause in the context of the fact that all existing EU marketing standards will be brought across through the European Union (Withdrawal) Act 2018 and placed on a UK statutory footing. It is therefore not the case that, in the absence of immediate action by the Secretary of State, there will be no marketing standards. In the absence of any action under clause 20, the position would be that retained EU law on marketing standards endures and remains after we leave the EU as it was when we were in it. Paradoxically, if there were a requirement that he “must” introduce regulations in all areas, the Government might be forced to change retained EU law that they were perfectly content with and not in a hurry to change.

George Eustice

- Hansard -

Copy Link

- - Excerpts

Of course, at the moment it is just left to the European Union, and we have no input at all. The hon. Lady will note that the set of regulations set out in clause 20 will be subject to the affirmative procedure. We recognise that these are important issues and that retained EU law may be replaced—there is the option to do that—so we have made them subject to the affirmative procedure. Parliament will have a role.

Amendment 83 is about the duty to consult, which we have covered on many occasions. I say again that DEFRA loves consultations. We have consultations on all sorts of matters. I can give the hon. Lady an undertaking that, before making any changes under clause 20, there will indeed be a consultation—not only because we always consult on matters of this sort anyway, but for another reason: as I explained, on issues of food standards, and food safety in particular, there is already a statutory requirement to consult. It is currently contained in article 9 of EU regulation 178/2002, which requires consultations on changes to food law. That EU regulation will come across in the retained EU law. In addition to my normal argument, there is an even stronger argument, which is that there is already a statutory requirement for changes in many of these areas, because they relate to food standards.

Having addressed hon. Members’ concerns and explained that retained EU law will be the starting point, and that we need not be in a hurry to change these things if we do not want to, I hope that the amendment will be withdrawn.

George Eustice

- Hansard -

Copy Link

- - Excerpts

This group contains two important amendments that have touched on some interesting issues, on which I will update the Committee. The first is amendment 118, tabled by the shadow Minister, which relates to an incredibly important issue. As he pointed out, the problem of allergens leading to deaths has been in the news most recently with the tragic story of 15-year-old Natasha Ednan-Laperouse, who died due to an allergy to sesame in a baguette that she bought from Pret a Manger. This is an important area and we are going to look closely at the review of food law, particularly for the labelling of allergens. We intend to publish our proposals around the turn of the year, to update colleagues further.

It is important to say that there has been a growth in food allergies in recent decades. Nobody is quite sure why that is, but it is real. If we look at the number of people who have allergies, particularly to nuts and sesame, we see that it has grown considerably in the past 20 to 30 years. Another change is that chains such as Pret a Manger, and many others, are increasingly making their sandwiches on-site, which is a relatively new model. That has happened in the past 15 to 20 years. The combination of the growth in the prevalence of allergies and the growth in the practice of preparing sandwiches on-site means that there is a gap in the law. A simple, small derogation that was intended to be used by small family bakers, for instance, so that they did not have to label foods being produced, is now being used on a much larger scale, which had not been envisaged at the time.

George Eustice

- Hansard -

Copy Link

- - Excerpts

As I said a moment ago, we are currently reviewing this. We intend to publish the results and our thoughts on how the law should be changed in this area early in the new year. We can make the amendments we need through secondary legislation. Obviously, because there is now a food safety issue, given the problem with allergies, once we have decided what is necessary we intend to move quite quickly.

New clause 15 relates to another important area. The Government have already signalled that we are keen to look at this issue further. Before addressing method of production labelling, I draw the attention of the hon. Member for Bristol East to subsection (2)(d) and (g) of clause 20. Paragraph (d) refers to

“the presentation, labelling, packaging, rules to be applied in relation to packaging centres, marking, years of harvesting”,

and so on, and paragraph (g) stipulates

“the type of farming and production method”.

Taken together, those two provisions already give us the powers we need to do all the things the hon. Lady is seeking to achieve with her new clause. Although this is an important area, and one that we want to look at, I do not think that this specific new clause is necessary. I hope that it is a probing amendment, given that the Bill already covers this in subsection (2)(d) and (g).

However, I would like to touch on the substance of the issue. The debate that we have had, with its many interventions—as I said, the hon. Lady is here to lighten the mood of the Committee—highlights how important this is, but also how complex. There are lots of descriptors: we have “grass-fed”, which is not necessarily the same as “pasture-fed”; we have “pasture-fed systems”; we have “outdoor-bred” pigs or “outdoor-reared” pigs; there is “organic” and “free-range”—and often those terms mean different things. It is quite an undertaking to try to define all those in one bound. Probably the more likely thing would be to pick something, such as “pasture-fed livestock”, just as we have done for free-range eggs, where we can draw the criteria and roll out these types of descriptors on labels as we are ready to do so effectively, rather than bite off more than we can chew. The regulations would enable us to do that, so we could bring in schemes as we were ready to roll them out.

Another slight complication is the nervousness I have always had about going too far down the line on method of production labelling, because there could be unintended consequences. For example, at the moment there is a substantial market for outdoor-reared bacon, because people look for that on the packet. They are less inclined to do so if they are buying a pork pie, for instance. Some manufacturers of pork pies might buy from high-welfare farms parts of the carcase that are not used for bacon and that are maybe outdoor bred, but they might also buy pigs from other, more commercial producers.

We have to be careful that, by having onerous labelling requirements for some of those sectors where people are less inclined to seek out the descriptor, we do not create an unintended barrier to high-welfare producers accessing the market for parts of the carcase that they would not necessarily market on the high-welfare brand. I am attracted to moving in that direction, but there are complexities and difficulties around the definitions and potential unintended consequences. I hope that the hon. Member for Bristol East will agree that the intentions behind her new clause are already reflected in subsection (2)(d) and (g) of clause 20.

George Eustice

- Hansard -

Copy Link

- - Excerpts

Following your steer, Sir Roger, I will reserve wider discussion of the scope of the Bill, or parts of it, for a later debate.

Amendments 56 to 64 are all linked, and many are the same. In essence, they would all delete references to the Secretary of State and instead insert “relevant authority”. I appreciate that behind this whole group of amendments is a belief, put forward by the hon. Member for Edinburgh North and Leith, that this is a devolved and not a reserved matter. I want to explain to her why we are very clear that that interpretation is incorrect and potentially based on a misunderstanding.

We have to look at the context of the clause, where we are recognising producer organisations. What are we recognising, and why are we recognising them? In this context, it is for one purpose only, which links to clause 23, which we will come to: we are recognising producer and inter-branch organisations in order to make them exempt from elements of competition law. It is incontrovertibly the fact that competition law is a reserved matter. That is absolutely the case. Clause 23 points to schedule 2 to the Bill, which amends schedule 3 to the Competition Act 1998 in a way that is advantageous to organisations that are recognised under the provisions of clause 22. Clauses 22 and 23 are fully reserved because they relate directly to competition law.

Some of the misunderstanding arises because of the possibility for joint ventures, or groups of farms or bodies coming together, to qualify for grant aid from the Scottish Government, if they put in the right legislation in future. Under clause 1(1), the UK Government for English farmers, or the Welsh Government for Welsh farmers, will be able to give a grant to a co-operative group of people who have come together. They have the power to do so. However, the power to recognise a producer organisation in this context for the purpose of exempting it from competition law must be done UK-wide because it is a reserved matter.

George Eustice

- Hansard -

Copy Link

- - Excerpts

That is broadly what would happen, and it is quite possible that the Scottish Government, Northern Ireland Administration and Welsh Government will already sometimes be involved in giving advice or supporting individuals who want to bring forward those designations. However, the assessment and designation of them has to be done by the UK.

I hope that, having been given this clear explanation as to why clauses 22 and 23 are reserved, the hon. Member for Edinburgh North and Leith will accept that there has perhaps been a misunderstanding about the difference between the ability to award grants and the process of recognition for the purposes of an exemption from competition law, which is reserved, and will withdraw her amendment.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I beg to move amendment 9, in clause 22, page 16, line 33, leave out “a single agricultural sector” and insert “one or more agricultural sectors”.

This amendment changes one of the conditions for applying to become a recognised producer organisation so that the condition is met if each member of the organisation is an agricultural producer operating in any one or more of the agricultural sectors listed in Part 2 of Schedule 1 to the Bill (rather than each member being required to operate in the same sector).

George Eustice

- Hansard -

Copy Link

- - Excerpts

All three amendments relate to trying to reduce some of the burdens that existing producer organisations have mentioned to us, and restrictions that they regard as unnecessary. Some of the EU rules on which we modelled the initial clauses, for instance, require all producers to be from a single agricultural sector, when actually we think there may be circumstances where groups of producers want to come together that span more than one sector. We think that is an unnecessary restriction that does not achieve anything.

In amendment 10, we propose to delete paragraph (d) from clause 22(2) in its entirety, so that a body corporate with legal personality is not necessary; we believe that to recognise a producer organisation there may be other models, including joint venture arrangements, that may stop short of being a body corporate. Again, we do not believe that that requirement is necessary; some might choose to do it but we think there should not be a requirement on them, and that they could convene themselves in other ways. Amendment 11 is linked to amendment 9 and also removes the reference to a “single agricultural sector” to allow there to be members from more than one sector.

On the EU fruit and veg regime in particular, we have had issues with Angus Growers in Scotland and with other producers in England too. Although fruit and veg producers welcome the grant support that they get through the fruit and veg producer organisation regime, many of them tell us that there are lots of problems with it. We frequently end up in litigation with the European Union because of poor or imprecise drafting or requirements that serve little purpose. The feedback from the people who have to deal with the schemes is that we should take the opportunity to sort it out, declutter it and make sure we have an equivalent scheme to offer them the support that they want, but with some of the frustrations removed. That is one part of what the Government amendments seek to achieve.

George Eustice

- Hansard -

Copy Link

- - Excerpts

There are lots of other conditions. Subsection (2)(e) requires that the constitution of the organisation meets certain requirements. There are other such provisions as well, so we do not have to define them as a body corporate in law in order to have express conditions that mean they would all be jointly and severally liable were something to go wrong.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I can tell the hon. Gentleman about that. I have had experience of the EU scheme in the past and there have been instances where, for instance, some growers have said to me that they would like to come together for a purpose other than just marketing, and they would like the freedom to be able to do that. That is quite restricted in the new scheme. On the amendments, the representations came from Co-operatives UK. After we published the Bill the co-ops told us that some of the provisions were unnecessarily restrictive and might stop some of their members from being able to have a recognised body for the purposes of clause 23, so we responded to those representations, which made salient points, and we were happy to acknowledge them and table the amendments.

Amendment 9 agreed to.

Amendment made: 10, in clause 22, page 16, line 39, leave out paragraph (d).—(George Eustice.)

This amendment removes the condition for applying to become a recognised producer organisation relating to the legal form of the organisation.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I can give the hon. Gentleman that assurance. We have been in discussion with Co-operatives UK, which raised the issue about eligibility and the fact that the requirements for a corporate body and to have all members from one sector could affect some co-operative working. We listened to that and addressed it.

I do not think that there is a spill-over of that problem—for want of a better term—in schedule 2, because that schedule is essentially all the technical clauses needed to disapply what competition lawyers call “the chapter 1 prohibition”. In essence, schedule 2 determines and sets out in some detail the process by which producer organisations can come together to collaborate and co-operate in a range of areas and co-ordinate their activities in a way that would otherwise be considered a breach of competition law.

In particular, paragraph 9(1A) of schedule 3 to the Competition Act 1998 lists activities such as planning production, optimising production costs, concentrating supply, placing products on the markets and negotiating supply contracts. Schedule 2 gives licence to a recognised producer organisation to do all those things and to disapply those elements of the 1998 Act.

George Eustice

- Hansard -

Copy Link

- - Excerpts

My understanding is that that is effectively an anti-avoidance provision to stop people from being members of several co-operatives and having a genuinely dominant market position that goes above and beyond what is envisaged by producer organisations. Under the current EU scheme, one producer organisation can have a market share of up to 33%, but if there were overlapping producer organisations, it could create market distortion. My understanding is that the provision seeks to address that.

In conclusion, I am a huge supporter of bio groups, co-operative working and collaborative working. We all know that one of the challenges we face in the agricultural industry, as we think about the future, is that it is sometimes a fragmented sector and sometimes does not have the clout it needs in the market or the ability to do joint collective buying to get those costs down. We want to facilitate collaborative working; this part of the Bill and the particular schedule that the shadow Minister has raised go some way to addressing that.

George Eustice

- Hansard -

Copy Link

- - Excerpts

There is already national competition law set out in the Competition Act 1998, enforced by the Competition and Markets Authority. In the past, for instance, that famously led to the break-up of Milk Marque, which led to the situation we have today. There have been instances of that in the past under existing national provisions on competition law. I know the hon. Gentleman said he might come back to this on Report; I am happy to give an undertaking to look at this issue further and explain in further detail exactly what each of those clauses delivers. The clause that my hon. Friend the Member for North Dorset mentioned is an anti-avoidance clause—[Interruption.]

George Eustice

- Hansard -

Copy Link

- - Excerpts

Yes. My understanding is that we have addressed the issues he has raised about the schedule, which are linked to the concerns that Co-operatives UK raised, through our earlier amendments.

Schedule 2 agreed to.

Clause 24

Regulations under sections 22 and 23

Amendment made: 12, in clause 24, page 19, line 7, after “unless” insert “section 29(4A) applies or”—(George Eustice.)

See the Explanatory Statement for Amendment 2.

Clause 24, as amended, ordered to stand part of the Bill.

Clause 25

Fair dealing obligations of first purchasers of agricultural products

George Eustice

- Hansard -

Copy Link

- - Excerpts

I shall begin by touching on amendment 48. Since the shadow Minister has not sought to remake an argument we have had many times, I will refrain from quoting from the Agriculture Act 1947 on this occasion.

I turn to the more substantive collection of amendments—93, 94 and 95—which seek to broaden the measure and to remove the requirement for it to apply to the first purchaser of agricultural produce. I understand the shadow Minister’s point, but I want to explain why we have adopted this approach. As he is aware, the Groceries Code Adjudicator enforces the groceries code for the 10 largest supermarkets—those with the largest turnover—and is funded by a levy on those retailers. It has been successful because it is focused on the key task of improving the relationship between the very sizeable retailers and their suppliers, which are often far smaller.

However, for a couple of years now people have raised concerns about the fact that some farmers do not directly supply the supermarkets. Indeed, although in sectors such as fruit and veg it is quite common for an individual farmer or grower to supply a supermarket, in other sectors—notably beef, lamb and dairy—farmers supply processors and abattoirs instead; they do not supply their produce directly to the supermarket. The point has been made that they do not benefit from the protection of the groceries code and the Groceries Code Adjudicator.

Anecdotally, there are sometimes problems with processors finding it easier to pass costs and breaches of the code on to the farmers than to have a difficult conversation with the retailer and tell it that it is in breach of the code, or to report it to the Groceries Code Adjudicator. For that reason, we said, “Let’s also address the problem at the other end of the scale.” The problem we are trying to address in the Agriculture Bill is that primary producers—farmers—are price takers and are often not sure what they will be paid until their animal has gone through the slaughter line. They can then end up with all sorts of costs that they did not expect and penalties that they could not have predicted. We therefore tried to address that unfairness by keeping the focus of these provisions on the first purchasers.

George Eustice

- Hansard -

Copy Link

- - Excerpts

The only way that a processor could do that would be if they literally became a farmer. Setting up a sham subsidiary company that buys from the farmer and sells to a middle man would still be caught by these provisions, because the vehicle company would still be required to abide by the terms that are set out through these regulations. We thought about this hard and our conclusion was that if the challenge is the fact that farmers are too often price takers, are too fragmented and do not have sufficient clout in the supply chain, let us have a very targeted, focused approach to ensuring that we address that unfairness.

The problem with broadening the provision to anyone in the supply chain, so it could be a haulage company transporting lettuces or someone who has bought something and sold it on, is that it is broadened to many more relationships. Then it becomes difficult to justify all the requirements and purposes set out, because they are very much designed for farm businesses.

George Eustice

- Hansard -

Copy Link

- - Excerpts

My hon. Friend makes a good point. We should remain focused on the challenge we are trying to address: why do farmers not get a fair price for the food they produce? Why do they end up too often being price takers and why do they need public support and subsidies in order to break even? The answer is often in the way the supply chain works to their disadvantage. Let us tackle the causes of that disadvantage and have an Agriculture Bill that is specifically targeted at agriculture.

George Eustice

- Hansard -

Copy Link

- - Excerpts

Amendment 112, tabled by the hon. Member for Bristol East, sought to state “all agricultural products” rather than “agricultural products”. However, we believe that we have already addressed that through part 2 of schedule 1, which we will come to. That lists agricultural sectors relevant to the producer organisation and fair dealing provisions. It is pretty exhaustive, and for the hon. Lady it has the term “other plants” at the end, which will capture everything that might be of interest to her particular diet. [Interruption.] Timber is another issue, but part 3 of schedule 1 creates the power to add to that.

We based the list on the contours of EU law and tried to have quite an exhaustive list. Timber is not on that list at the moment but there would be nothing to stop us from adding it, although we would have to consider whether it is appropriate to do so. We are predominantly looking at farmers and their relationship with processors. We have a particular problem with the dairy, beef and sheep industries, and that is the primary purpose here.

George Eustice

- Hansard -

Copy Link

- - Excerpts

The regulations that we can make under part 3 of schedule 1 give us the power to add additional things. Although I am Agriculture Minister, I do not cover forestry and timber, so I will need to discuss that with my ministerial colleagues. It is certainly an option and the provision is there to enable us to add products.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I feel that this will be one of those unexpected issues that returns on Report. I will undertake in the meantime to talk to my ministerial colleagues responsible for the forestry industry.

Amendment 65 is a similar provision to that which we discussed in an earlier debate on producer organisations. It seeks to ensure that we could make measures in that area only with the consent of Scottish Ministers. We have adopted that approach because it is a competition matter that deals with the ability to have contractual changes linked directly to competition law—that is why it is a reserved matter. We are not doing anything new in that regard. The current Groceries Code Adjudicator is a UK-wide body; it operates UK-wide and the legislation that underpins it is UK-wide. The EU milk package is an example of a contractual fair-dealing provision under EU law. It applies UK-wide and can only be switched on and implemented on a UK basis. It is therefore a well-established fact that such issues, which pertain directly to competition law, are a reserved matter to be handled by the UK Government. That is why we do not accept that the provisions are necessary or acceptable.

George Eustice

- Hansard -

Copy Link

- - Excerpts

Although it might do so in a different way, it relates to competition law and is not an exemption from the chapter 1 requirements that we discussed earlier. The hon. Lady has not complained about the Groceries Code Adjudicator, which is administered on a UK basis and operates UK-wide; nor has she raised huge concerns about the way that the EU has always approached those matters, which is that they are a UK-wide competency and that switching on elements of the milk package is a UK decision and can be done only on a UK-wide basis. I hope that I have addressed the issues raised by the hon. Member for Edinburgh North and Leith about the role of Scotland in this reserved matter, and reassured the shadow Minister and the hon. Member for Bristol East that their amendments are unnecessary since they are provided for in part 2 of schedule 1.

George Eustice

- Hansard -

Copy Link

- - Excerpts

The amendments are linked to a common sentiment that we hear from farmers. There is no doubt that a number of people will say that they fear reprisals, consequences of being delisted or losing business if they were to complain. That has been recognised for some time. That is why we made changes early on to the remit of the Groceries Code Adjudicator, to enable her to receive complaints anonymously and pursue investigations when she had reasonable cause to believe there was a problem with a particular supermarket, and indeed to allow a trade body such as the National Farmers Union to pass on intelligence about the conduct of a particular supermarket that could inform an investigation. Even within the GCA, which is predominantly a complaints body, we have found the scope for anonymous whistleblowing and for third-party organisations to pass on concerns.

I draw the hon. Gentleman’s attention to subsection (5)(a) and (b). The specific issues he raises can be addressed through regulations. Subsection (5)(a) makes provision for regulations

“for complaints relating to alleged non-compliance to be referred to a specified person”.

And, crucially, subsection (5)(b) states

“as to how those complaints are to be investigated and how an allegation of non-compliance is to be determined”.

It is absolutely within the powers set out in subsection (5) for us to introduce regulations that would guarantee anonymity and enable complaints from third-party organisations, when they can hand on intelligence or create the scope for a regulator to investigate, when there is reasonable cause to believe there is a problem. I hope the hon. Gentleman will recognise that we think the particular issue that he seeks to address in amendment 86 is already provided for in subsection (5)(a) and (b).

Finally, although we hear a lot about this, Christine Tacon from the Groceries Code Adjudicator says that one of the most powerful things that can be done is for people working for processors and dealing with supermarkets to have assertiveness training, because we can put in place all the right regulations and have all the abilities in the world for people to report things anonymously, but there is a point at which people have to take responsibility and be willing to say to a supermarket buyer, “You know I cannot agree to that, because it is a breach of the code and what you are asking me to do is in breach of the law.” She said that when the GCA has placed people from those organisations’ sales teams on to assertiveness training, they have learnt how to use the code themselves without having to always run to her for an intervention.

George Eustice

- Hansard -

Copy Link

- - Excerpts

As I said, the GCA already has the powers to receive complaints anonymously and to investigate, where she has reason to suspect a breach of the code. That is already in place.

My point is not that this is not a legitimate issue—of course, as I said, the regulations can provide for anonymity—but that at some time we need people to have the confidence and courage to say, “I will not agree with that. It is against the code—you know it’s against the statutory code—and you shouldn’t be asking me to do it.” For such things to work properly, we need the farmers and sellers also to hold people to what is a legal requirement. They can play their part and, where they are willing to do so, that can make all the difference.

Amendment 87 is similar—it is about being able to launch investigations when there are reasonable grounds to suspect non-compliance, rather than when there is a complaint. Again, we believe that we can provide for that. It is important to note that whatever is set out as a legal requirement in clause 25(3) will be a legal requirement whether or not there is a complaint. Subsection (5) deals predominantly with complaints and how they are handled, we do not envisage the body as simply a complaints-handling one; we see it as an enforcement body that will enforce all the legal requirements introduced under the Bill, specifically clause 25. It will not only handle complaints and pass them on.

George Eustice

- Hansard -

Copy Link

- - Excerpts

The clause provides quite strong powers, including those to impose penalties for non-compliance on the first purchaser of agricultural products. If such a first purchaser happens to be a major retailer— perhaps one not currently covered by the groceries code, because it is below a certain threshold—it will be covered by the Bill. By addressing the problem from both ends of the telescope, we have a workable solution that means we can really deliver for the interests of farmers while not losing the successes of the Groceries Code Adjudicator model.

Having given that reassurance that the issues raised by the hon. Member for Stroud in amendments 86 and 87 can already be addressed through regulations under subsection (5), I hope that he will accept it and withdraw his amendments.

The Minister for Agriculture, Fisheries and Food (George Eustice)

- Hansard -

Copy Link

- - Excerpts

I will start with new clause 16, tabled by the hon. Member for Bristol East, which seeks to add some environmental targets to the Bill. We discussed this topic earlier in the Committee’s deliberations. As I said earlier, the Government have clearly demonstrated our commitment to the environment through the 25-year environment plan. We are currently in the process of developing a detailed indicator framework so that we can accurately measure progress on those important environmental trends. Obviously, we have already consulted on the key element of our agriculture policy, which is to deliver payment for the delivery of public goods, but fundamentally I see this as an issue for the forthcoming environment Bill. We will be publishing a draft of that Bill later this year, which will deal with environmental governance and environmental principles. In the second Session of this Parliament there will be an environment Bill that will include some of these things.

I will address the point that the hon. Member for Bristol East made about whether there is some division between DEFRA and the Treasury.

George Eustice

- Hansard -

Copy Link

- - Excerpts

There will definitely be a Bill dealing with animal sentience and sentencing. As I speak, we are considering where we might be able to fit those particular provisions into future legislation.

The hon. Lady asked whether there is a division between DEFRA and the Treasury. There is not. Within Government there are discussions, obviously, and then there is a consensus and an agreement. She kindly offered to protect the Secretary of State through the proposed new clause, but I can assure her that the Secretary of State needs no protecting; he is very good at making his case within Government. We already have some statutory targets through international agreements in areas such as climate change, but we believe that environmental targets and objectives should be picked up through the 25-year environment plan—there were some objectives in that plan—and are fundamentally a matter for the environment Bill. I am sure that she will be very engaged in discussions about that Bill when it comes forward.

I turn to new clause 19, tabled by the shadow Minister, the hon. Member for Stroud, which concerns the importance of advice and guidance. The Government agree with him about the importance of advice and guidance, particularly as we roll out a new scheme, but clause 1 is absolutely clear that we can already pay for advice and guidance. Subsection (1) of that clause states:

“The Secretary of State may give financial assistance for or in connection with any of the following”.

The term “in connection with” enables us to make financial assistance available to support advice, and I want to spend a little bit of time explaining what the Government intend to do in this area.

As I touched on during an earlier debate on other clauses, we envision the new environmental land management scheme as effectively a covenant or contract between individual farmers and the Government. We intend to support a system in which farmers would be able to receive advice on the design of an environmental land management contract. That advice might come from an agronomist accredited by a UCAS Government scheme or from one of our employees from Natural England, or a third-party organisation like the Wildlife Trust might develop a cohort of people who could provide that advice. Having worked with the farmer, visited the farm, walked to the farm and not got too obsessed by maps, form-filling and all the rest of it, they can sit around the table with the farmer, help them put together the agreement, and then sign it off with the presumption that it will be supported and paid for.

We want to get back to a system in which there is much more human interaction, and in which trusted agronomists, trusted advisers who are accredited by the Government, and Government officers from agencies such as Natural England work directly with farmers. We do not want everyone to get bogged down in paperwork, form-filling, mapping and having to spend hours on a helpline, only to find that nobody can help them with their query. We have got a great opportunity to redesign the system.

The hon. Member for Stroud said that, as this is a new scheme, there will potentially be challenges in getting farmers used to it. I understand his point, but until a couple of years ago about 70% of farmers were in either an entry-level stewardship or a higher-level stewardship scheme, so by and large they are very familiar with these types of agri-environment schemes. They have run similar schemes previously, so I think they will be able to pick up these schemes and adapt to them.

The other thing we are doing is having a seven-year transition in which we gradually wind down the single farm payment. During that time we will be piloting the new system. That gives us plenty of time to familiarise farmers with the new system, and to perfect the system, so that when we roll it out fully we do not have problems along the way, and to ensure that we have the capacity to give advice in the area to which the hon. Gentleman alludes.

The other point I want to address is about the holistic advice to farmers. We have been looking at projects run by a number of organisations, including the Agriculture and Horticulture Development Board, which gives a lot of technical advice and has a network of what it calls monitor farms so that it can share good practice and knowledge transfer, and the Prince’s Countryside Fund, which runs very good peer-to-peer support groups to help farmers with their business management and help them address change. It has had some success with that. We are keen to learn from that as we roll out support for farmers. As the hon. Gentleman pointed out, farming can be a very lonely business. I grew up in a farming community, so I am familiar with the issues. There has always been the great tragedy of high levels of suicide in agriculture—usually about 50 a year. That figure has been fairly constant for a number of decades. We want to ensure that, as we go through this period of change, we give farmers all the support we can to help them adjust and move to a new system.

New clause 27 is all about county farms, about which the hon. Member for Stroud and I share a passion. This is the first time today I have been able to mention the 1947 Act. As he is aware, sections 47 onwards and part 4 of the Act established county farms and the right of local authorities to buy them. The new clause looks familiar because, although we often say that this is the first Agriculture Bill since 1947, that is not quite true. It is the first major Agriculture Bill since 1947, but of course there was the Agriculture Act 1970, which rolled forward some of the provisions from the 1947 Act and changed others. It created the requirement for local authorities to submit a plan to the Department and seek our agreement for any consolidation and reorganisation. That was a time-limited power, and I understand that new clause 27 is effectively attempting to replicate it. Earlier this year we laid before Parliament—I have to sign these off every year—the 67th annual smallholdings report, under section 5 of the 1970 Act, so there are still some requirements under that Act.

I want to explain what we intend to do about county farms. My view is that we should create a financial incentive for local authorities to invest in and commit to their county farms in the long term. The idea that I have in mind is to create, under clause 1(2), a fund for investment in county farms that is open to local authorities, subject to their submitting to us a clear plan demonstrating their long-term commitment to their county farm estate. I would like to see more emphasis placed on turning county farms into what might be called incubator holdings, to genuinely support new entrants. At the moment the problem is that once people get on to a county farm, they often get stuck there for 20 or 30 years and do not have the ability to progress.

Our idea is to look at what we can learn from other parts of the economy where there are, for instance, innovation centres offering mentoring for setting up new businesses; where the local enterprise partnership might be involved, working with the local authority to draw down additional funding; where it might be made a requirement for local authorities to have partnership agreements with private estates, so that they have farms to move farmers on to after five years; and where we might also support the development of peri-urban farms on other parts of local authority land.

George Eustice

- Hansard -

Copy Link

- - Excerpts

The scheme would be for England only, for the reasons I have outlined.

I hope that the hon. Member for Stroud understands that, rather than drafting a clause that requires that to be done, I believe that we can deliver the outcome we seek simply by establishing a fund to help local authorities invest in a county farm estate, subject to meeting conditions that demonstrate their long-term commitment to the scheme.

Question put, That the clause be read a Second time.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I will describe in a moment what we are doing on future regulation, including the enforcement of this scheme. However, the hon. Gentleman gave me an opportunity—an “open goal”, as he said—to, for want of a better term, shoot at the RPA. I am not going to do that. As I have said many times, the RPA and agencies such as Natural England are currently grappling with a truly hideous body of European regulations and an unbearable administration process. That causes huge problems for farmers, who are required to fill out and submit endless forms and do lots of mapping, and for our administrators, including the RPA.

The problems we had last year, for instance, were caused because EU law required us to re-map 2 million fields in one go. We would not have chosen to do that—there was not really a need to re-map the fields—but we were forced to, just to ensure that there were no ineligible trees littered around the landscape. The sheer scale of that task caused administrative problems. The problems we have had with our countryside stewardship schemes were caused primarily because the European Union passed a rule that said every scheme must start on the same day of the year, which caused a massive spike in workload, required us to employ 500 temps and created all the contingent problems that come with that. In the design of the new scheme, we can learn lessons from the past and jettison some of the muddled thinking that is imposed on us by the European Union and EU auditors.

I should also point out that the RPA has taken on some of the payment functions related to the pillar two countryside stewardship schemes, precisely because not only the RPA has had challenges. Natural England has had horrendous problems trying to implement the countryside stewardship scheme. Indeed, one of the reasons we moved the RPA in to take over that space was that it has a stronger track record of managing complex EU processes.

Let me turn to what we intend to do in the future. The substance of new clause 18 is very much being addressed by the work currently being undertaken by Dame Glenys Stacey, who has given early indications of her direction of travel. She argues that we should move away from the clunky clipboard-and-rulebook approach inherent in the EU system and towards a much more modern way of regulating farms so there is more of what she calls social regulation, more incentives, fewer arbitrary rules and more whole-farm assessment. The work she has started is very interesting. She is also looking at the issue of our having multiple agencies and whether there could be consolidation, and at the establishment of a new type of body to perform some of these functions.

I do not believe there is a need to consult now, as the new clause would require us to. The first step is for us to see the final report from Dame Glenys Stacey. If the Government decided at a future date to implement some of the recommendations in that report, perhaps including the consideration of a new body, that would be the time to consult.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I am more than happy to take up the hon. Gentleman’s suggestion to say nice things about co-operatives. As I said in an earlier sitting, I am a supporter of collaborative working, joint working, joint ventures and co-operative approaches to help farmers deal with the fact that often they are fragmented and end up as price takers in the supply chain.

We have done a number of things already. Earlier this year, I announced a £10 million collaboration fund out of the rural development programme to support joint working and to support the formation of co-operatives. The hon. Member for Stroud will also remember from an earlier discussion on clause 22 and the recognition of producer organisations that we had meetings with the co-operatives’ representatives and have taken on board some of the suggestions that they made. We tabled a Government amendment to clause 22 to ensure that models other than that of a limited company, which is the requirement under current EU law, are recognised as producer organisations.

On the substance of new clause 21, which would ensure that there is financial assistance for co-operatives, I am happy to take the opportunity to confirm that, just like the existing rural development programme, clause 1(2) —the subsection on productivity—enables us to make available grant support, Government-backed loans or other guarantees to the co-operatives, should we want to support their endeavours. It is not only clauses 22 and 23, on exemption from competition law, that help certain co-operatives and recognised UK producer organisations; the very first clause of the Bill has provisions for our giving financial assistance to co-operatives. By establishing the £10 million collaboration fund earlier this year, I hope that I have demonstrated through my deeds rather than my words that I see this as important. Should the hon. Member for Stroud ever be in Government, I hope that he would do the same and continue to support these important organisations.

George Eustice

- Hansard -

Copy Link

- - Excerpts

This again highlights an important ethical issue, about which people in this country have strong views. However, in common with others, I do not think it fits in the Bill. This is not a trade Bill; it is an agriculture Bill about how we support agriculture and replace the common agricultural policy.

I do not think we have ever produced foie gras in this country. It has been illegal at least since the Protection of Animals Act 1911, and the Animal Welfare Act 2006 put it beyond doubt. There is no explicit ban on foie gras, in the way that there is on fur farming, which was introduced as a specific ban in Parliament, but it has always been understood that the production process involved in it, requiring as it does the force-feeding of ducks and geese, creates serious animal welfare concerns. If ever practised here, that would be in breach of our long-standing animal welfare legislation.

There is a small amount of production in some parts of the world, including France, of what is called “ethical foie gras”, where they use a particular breed of goose and do not force-feed them. They manage to get a product that is very similar to foie gras in a way that causes far less concern for the welfare of the animal.

Turning to the proposed new clause, the issue is important. If we leave the EU, depending on the nature of any agreement we have with the EU, a future Government would certainly be able to ban the import of foie gras. Some countries, notably India, do have ethical bans of this sort. India has one on fur and might already have one on foie gras.

We know that WTO case law means it is entirely in order to have bans on certain products of this sort, where there are ethical reasons to do so. There has been case law in the past regarding seal furs that has upheld that long-standing principle. It would be an option for a Government, depending on the nature of the agreement we finally have with the EU, to ban the import of foie gras, in much the same way as India does, but I do not believe the Bill is the right place for it.

It is the kind of thing that we would consider once we are clear about the type of trading relationship we will have with the EU and what concessions we might have to make as part of that settlement—until then we are not in a position to advance any policies of this sort.

George Eustice

- Hansard -

Copy Link

- - Excerpts

We had a similar discussion about an amendment earlier. I do not intend to speak for too long, but the hon. Gentleman will be aware that I disagree with him for reasons that I have set out. As he knows, the Agricultural Wages Board was established way back in 1948. There were lots of other boards around at that time, covering different sectors. Most of them were phased out during the ’60s, ’70s and ’80s; the Agricultural Wages Board was the last one standing.

Things changed fundamentally. There was a review of the Agricultural Wages Board in the mid-1990s, and in the end a decision was made not to take action. After the national minimum wage was introduced by the previous Labour Government and adopted by the Conservative Government, and, more importantly, after this Conservative Government introduced the new national living wage, the Agricultural Wages Board’s raison d’être was no longer there. It has been superseded by other pieces of legislation and minimum wage requirements. We currently have a national minimum wage of £7.83, and the national living wage is soon to go to £8.75. We therefore already have protections through the National Minimum Wage Act 1998, the Employment Rights Act 1996 and the Equality Act 2010. There is lots of legislation to protect agricultural wages.

I do not share the hon. Gentleman’s view that the negotiating apparatus that operated alongside the Agricultural Wages Board is necessary. There were problems with the way that it worked. It did not, for instance, allow the payment of annual salaries to some management staff so hours and payments could be averaged across the year. That would help people get mortgages to buy homes. There were reports that, because people received a weekly wage based only on the hourly rate, it was difficult for them to demonstrate to mortgage lenders that they satisfied their criteria.

More importantly, the very formulaic tiers of wages did not enable people who were doing particularly well and were on their way to progression or to a management role to be rewarded, unless they had the right craftsman qualification. It took away employers’ flexibility to reward their staff, because everything was set in a very formulaic way. I do not share the hon. Gentleman’s romantic view of the Agricultural Wages Board; it was restrictive and stopped more progressive approaches to payments, including salary development. Insofar as it gave protection for minimum wages, its role has been superseded.

George Eustice

- Hansard -

Copy Link

- - Excerpts

The Government have a policy on the issue as well. As the hon. Gentleman will be aware, in our manifesto we committed to control the export of live animals for slaughter. I will describe in a moment what we intend to do and what work we have already done.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I do not accept that. The hon. Lady has fallen into a counter-argument against the ban on live animals, which is that if you have the transport regulations right, or if you improve them, there is not necessarily a difference between a crossing by sea and a crossing by road. The reason why it particularly matters for slaughter is that we have the very clear principle that when you are moving animals for slaughter you should absolutely minimise the stress on those animals. It can be a stressful environment as it is, and having a long journey before slaughter is fundamentally different to transport for rearing.

Our position is that we want to control export for slaughter. We subsequently issued a call for evidence. We worked with the devolved Administrations on this because it obviously affects Northern Ireland and has implications for Scotland. Scotland exports live calves to Ireland, for instance. As my hon. Friend the Member for Gordon pointed out, there are also issues with some island communities, such as Shetland.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I hope I will be able to persuade the shadow Minister that he does not need to press the new clause to a Division. We rehearsed in an earlier discussion on clause 1 the fact that the Government are actively looking at holistic schemes to support and incentivise what could be called integrated pest management. We are considering whether we can reduce our reliance on synthetic chemistry by using more natural predators and different agronomic approaches and being willing for the first time to incentivise farmers financially to do that.

One of the things we are looking at is an incentivised integrated pest management scheme to advance this policy agenda. We also set out in our 25-year environment plan the idea of moving forward and embracing integrated pest management more than we have done previously. The new clause deals with publishing reports and measuring impacts—I have said previously that DEFRA needs no encouragement to produce reports through statutory requirements; we love reports. As I explained, I regularly have to read and sign off reports and I sometimes question whether anyone else is reading them. For some reason, many reports seems to congregate around June, so during that month my box is weighed down with annual reports of one sort or another.

I will share with the hon. Gentleman some of the reports that we have received. I have a lot of reading here that he can take away as a memento of this Committee. The UK Expert Committee on Pesticides—the ECP—which gives us advice on emergency authorisations and on some of the tricky chemical issues. It is a standing advisory committee to the Chemicals Regulation Directorate. I have with me its annual report for 2017, all 22 pages of it. The Expert Committee on Pesticide Residues in Food produces a separate annual report, on top of the one by the Expert Committee on Pesticides, so we have two expert committees in the pesticides space, one on residues and one on broader environmental impacts, both of which produce a report. The report on pesticide residues lists all the findings and surveillance on residues on a wide range of imported products and products produced domestically. It runs to 48 pages and is an annual report.

If that is not enough for the hon. Gentleman, the pesticide usage survey report, is produced by the National Statistics Office and focuses on all sorts of different icrops. I have with me the 2016 report for arable crops, all 92 pages of it, with lots of tables demonstrating exactly what is produced. That key survey already monitors the use of pesticide-active substances on each crop.

George Eustice

- Hansard -

Copy Link

- - Excerpts

My right hon. Friend is correct: schemes such as the red tractor assurance scheme have additional checks and enforcement to ensure that there is nothing out of order, and on top of that they generally require MOTs, for instance, for sprayer equipment.

The pesticide usage survey covers the frequency of application, which picks up the measures in subsection (1)(c) of the new clause, and the area treated, which covers subsection (2)(d), as well as the weight of active substance. It also includes figures on some of the alternatives to chemicals, such as the use of viruses that can target insect pests. In addition, the National Poisons Information Service collects and considers reports of possible harm to people, which covers subsection (2)(b). Results are not published, but they are reported to DEFRA and other interested Departments, as well as to the UK Expert Committee on Pesticides.

Finally, the Wildlife Incident Investigation Scheme looks at reported incidents of possible harm to wildlife, which I think is what subsection (2)(a) of the new clause is trying to get at. Results of the Wildlife Incident Investigation Scheme are published on the Health and Safety Executive website, and the Environment Agency also monitors levels of pesticides in water.

I understand that there are very good intentions behind the new clause, but I hope that I can reassure the hon. Member for Stroud that we have a plethora of reports that cover pesticide use and pesticide issues in great detail. I hope he will withdraw his new clause at this stage, take some time to read the reports, which I would be happy to leave with him, and consider whether he still feels the measure is necessary on Report.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I am grateful for this opportunity to set out our position on the funding of agriculture. As hon. Members will know, we have a manifesto commitment to keep the cash total spent on agriculture for the UK at exactly the same level until 2022—the end of this Parliament. That commitment goes further than the current spending review period. Not every other Department has that, but we made that commitment, because we recognise the importance of giving farmers clarity and certainty that the Government intend to still support them financially during this transition from the old system to the new.

Our manifesto also made a commitment that after 2022 we would roll out a new agri-environment policy, which would be funded. The Bill is explicit that there will be a transition period of seven years until 2028, as we gradually wind down the single farm payment—or basic payment scheme. It is implicit in the Bill and our manifesto commitment that there will be a funded agriculture policy after 2022. We have not put a precise figure on that, but we have done more than we do for most other Departments, which is to give a guarantee until 2022.

As the hon. Member for Edinburgh North and Leith will be aware, the allocations for Scotland have been a contentious issue as a result of the convergence uplift and debates around that. For that reason, we have asked Lord Bew to lead an independent review of intra-UK allocations. That review is now underway. The outcome of that review will inform allocations for 2020 onwards.

The answer to this particular new clause is that this work is already being done and it is being led by the review that Lord Bew is undertaking, which will inform intra-UK allocations after 2020. That will enable us to take account, for instance, of severely disadvantaged area and to take account of the emerging policies that we have in different parts of the UK, but also to have regard for the fact that probably every part of the UK will want to have a transition from the old system of the basic payment scheme to the new, so there would need to be some understanding of how much money people will need as they move in transition from the old scheme to the new.

The hon. Member for Darlington made points about the ability of the Scottish Government to make payments. We covered that in an earlier debate, but to clarify, we introduced new clause 3 to the Bill in Committee, as well as subsequent equivalent clauses for the schedule for Wales and the schedule for Northern Ireland. The purpose of new clause 3 and those two connected provisions for Wales and Northern Ireland was to give the Government the power to set financial ceilings, so that the legacy schemes that come across through retained EU law could still be paid. Unless the power exists to set financial ceilings, the existing financial ceilings that underpin the payment legislation in the EU scheme will fall away. Therefore, unless the Scottish Government took action to introduce a clause such as new clause 3, they would not have legal authority to make payments in 2020.

George Eustice

- Hansard -

Copy Link

- - Excerpts

Yes, I am aware that NFU Scotland has now said that it believes that, as a minimum, there should be something like new clause 3. I discussed the issue with Scottish Ministers yesterday at the meeting that we had in Wales, where it came up. We established that it is relatively easy to rectify. This is a single clause. We could put it in a schedule to this Bill if it were the wish of the Scottish Government for us to do so. We could add a schedule to the Bill that replicated new clause 3 for Scotland but did nothing else, and we could do that at later stages of the Bill, or of course it is open to the Scottish Government to add new clause 3 to an alternative piece of primary legislation, going through the Scottish Parliament. The issue is not complicated to fix; it does not necessarily need a fully worked-up, fully detailed Bill, but they do, as a minimum, need something equivalent to new clause 3. I think that they understand that now, and they are considering whether it is best to do it as a schedule to our Bill or as an addition to one of their own Bills.

I hope that I have been able to explain that we have a review under way that is looking at intra-UK allocations, that is designed to address the needs of every part of our United Kingdom as we consider funding the provisions in this Bill and provisions that other, devolved Administrations might bring forward in the future.

George Eustice

- Hansard -

Copy Link

- - Excerpts

I agree that it is possible for the Scottish Government to include a clause similar to new clause 3 in primary legislation going through the Scottish Parliament, but the hon. Lady needs to understand that it requires the setting of a financial ceiling; that does not come across in retained EU law. That is why we have introduced those new clauses to the Bill for every other part of the UK. The hon. Lady is right: we are not saying that we have to legislate through this Bill. There is an offer if the Scottish Government would like us to include something equivalent to new clause 3, but if they would rather not have that, it is for them to add the provision to one of their pieces of primary legislation.

George Eustice

- Hansard -

Copy Link

- - Excerpts

New clause 31 is an important clause and an important point to end on. As the hon. Member for Stroud knows, our view is that changes to tenancy law go beyond the scope of the Bill, which concerns future agriculture schemes. However, he also knows that I take the issue very seriously.

While we do not want to throw the baby out with the bathwater when it comes to tenancy law, because the introduction of farm business tenancies was an important innovation and has brought more land to market, there are undoubtedly some problems with the way that both Agricultural Holdings Act tenancies and the farm businesses tenancies under the 1995 Act operate. That is why, around 18 months ago, I commissioned the Tenancy Reform Industry Group to do a detailed piece of work on what changes to tenancy law we ought to consider, in particular to address productivity and support structural change in the industry. It came back with a package of proposals, as the hon. Gentleman said.

Probably chief among the proposals was the idea that an Agricultural Holdings Act tenancy could be assignable, so that an older farmer who wanted to retire but did not have children to inherit the tenancy would have some kind of right to assign the tenancy at open market values to a third party or, indeed, to enter into surrender negotiations on the tenancy with their landlord on that basis. The Law Commission recommended reform of the rules of forfeiture for farm business tenancies many years ago, and tidying that up remains unfinished business.

Also included in those proposals was a recommendation for a provision to vary restrictive covenants within Agricultural Holdings Act tenancies. Farming practices have moved on, and having certain covenants that prevent modern investment on farms, or that might stand in the way of the type of environmental schemes envisaged in the Bill, are problematic. There should be a process for looking at that.

To end the Committee on a positive note, I can reassure the hon. Gentleman that we have by no means forgotten that package of measures. My officials are currently working on a draft consultation on tenancy law and some of those changes, which we intend to publish in the new year. The outcome of that consultation will inform a future piece of legislation on tenancy reform.

The consultation will probably look at one or two other areas where we believe changes are required. For instance, article 31 of the Agricultural Tenancies Act 1995 restricts the ability of landowners to issue tenancies on their land unless they have permission from a lender, who might have a charge over that land. That overturned decades of practice, where there was a presumption in favour of a landlord being able to grant a tenancy because the land needed to be farmed. We believe that that particular provision, article 31, needs to be looked at again.

We are also considering a call for evidence on the repossession of agricultural land. At the moment there is a gap in the law. Farm businesses tend to have their assets owned by individuals. Currently, if a bank wished to repossess a residential property, it would have to go to a court to get a possession order. There is no such requirement with agricultural land. A bank can simply seize land and auction it without any recourse to the courts. It is an outdated approach, and we are therefore considering amendments that would require a possession order from a lender before they could seize the land.

George Eustice

- Hansard -

Copy Link

- - Excerpts

A possession order would require a bank to justify its action to a court before being able to take anyone’s land. There have been a number of issues with secondary lenders, and mainstream banks, moving aggressively to seize and auction land, and selling it in a reckless way that is against the interests of the landowner and their creditors because they have that charge over the land. That area needs to be looked at.

With the confirmation that we have not forgotten those areas, and that we are looking at a consultation, I hope that the hon. Member for Stroud will not feel the need to press the new clause to a vote.

It has been a pleasure to serve under your chairmanship, Sir Roger, and that of Mr Wilson. We have had a good-natured debate on new clause 31 and all the other amendments and clauses in the Bill. We have done a thorough job of examining every clause and amendment in great detail. I thank every member of the Committee for giving up their time and diligently intervening and contributing to the discussion.

I also thank my officials in DEFRA, who have worked incredibly hard. The Bill is the first substantive piece of legislation on agriculture that we have had since 1947. It has been a huge piece of work. Finally, and by no means least, I thank the Clerks. We particularly tested their patience when changing the plan for evidence sessions at the beginning, but I hope that we have been less difficult since then. We are grateful for the time and effort that they have put in.