Pollution in Rivers and Regulation of Private Water Companies

Baroness Bakewell of Hardington Mandeville Excerpts

Thursday 29th February 2024 Lords Chamber

Moved by

[Baroness Bakewell of Hardington Mandeville]

That this House takes note of (1) the state of pollution in rivers, and (2) the case for regulation of private water companies.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, the House is sadly becoming used to Questions and debates on sewage overflows, the quality of waterways and water company CEOs’ pay. I do not apologise for raising the issue again.

Water companies continue to discharge sewage into rivers, lakes and coastlines. At the same time, the Government are watering down environmental protections and allowing sewage discharges to continue until 2050. Liberal Democrats are calling for this to end much sooner in order to improve the quality of the water in our rivers, lakes and beaches. England’s sewerage companies have been allowed to get away with discharging sewage into our waterways for far too long.

In England, over the last three years, 2020 to 2023, there have been 1,760,659 overflows, lasting for 7,523,601 hours. Over the summer, beaches across the south-west were closed because of sewage pollution, impacting holidaymakers and tourists alike, while national parks, such as the Lake District, have not been spared spills. Meanwhile, over the same period, water company executives have paid themselves £73 million in remuneration, including £41.2 million in bonuses. In 2022, the then head of the Environment Agency even suggested that executives might deserve to go to prison.

The Conservatives have done nothing to stop water companies dumping sewage into our rivers. They have consistently voted against tougher action to stop sewage overflows, while the water regulator Ofwat said that only three of the 11 sewerage companies were top performers and had met their sewage overflow targets.

The Conservatives’ plan to reduce these sewage discharges is a licence to carry on as normal. Under their plan, water companies will be permitted to continue discharging sewage until 2050 and bill payers will see hikes in their bills to pay for it. The Government are even watering down environmental regulations, such as nutrient neutrality rules, which is likely to make the sewage problem even worse. Liberal Democrats are calling for an end to sewage dumping. Water executives should be banned from paying themselves bonuses until illegal sewage overflows stop on a regular basis.

The Secretary of State is proposing to block payouts to executives of firms that commit criminal acts of water pollution with effect from the financial year beginning this April. Can the Minister say how this information will be collected and monitored? What will be the criteria for preventing payouts?

The Liberal Democrats are calling for four actions. First, England’s water companies should be transformed into public-benefit companies. Secondly, Ofwat should be abolished and replaced by a new regulator which has effective powers to intervene. Thirdly, a sewage tax should be introduced to fund the clean-up of the most polluted lakes, rivers and coastlines. Fourthly, compensation should be introduced for swimmers who fall sick after swimming in dirty waters.

In Wales, things are no better. There have been 287,836 overflows, lasting for 2,290,674 hours over the last three years. The bosses of Welsh Water have been paid £3.5 million, including £841,000 in bonuses, benefits and incentives. The top executives of Wales’s other water company, Severn Trent, paid themselves £15 million, including £11.2 million in bonuses, benefits and incentives. In Wales, Welsh Water is not-for-profit and is still responsible for vast amounts of illegal sewage discharges. The Labour Government in Cardiff Bay are responsible for the regulation of Welsh Water and sewage overflows within Wales. Labour has systematically underfunded Natural Resources Wales, which is responsible for monitoring water quality, and has provided nowhere near enough oversight of Welsh Water. Liberal Democrats are also calling for a ban on sewage bonuses for directors in Wales.

Up in Scotland, illegal sewage discharge is also a problem, but its sewerage company, Scottish Water, is publicly owned by the Scottish Government. Over the last three years, Scottish Water allowed sewage overflows 37,396 times into Scottish rivers, lakes and coastal areas, lasting 403,230 hours. However, of the 3,614 overflows in Scotland’s 31,000-mile sewerage network, only 4%—that is, 144—are currently monitored. The Ferret website made a freedom of information request and, on 22 September, revealed that more than half of Scotland’s bathing waters—49 out of 87—have been contaminated with sewage. Meanwhile, Scottish Water’s top executives took home £2.9 million in remuneration, including £1.13 million in bonuses, benefits and incentives over the last three years. This is unacceptable. However, the SNP and its Green Party partners have failed to tackle sewage discharges, despite being directly responsible for them. Due to their failure to monitor, we do not even know the full extent of the problem.

Liberal Democrats are calling for an end to sewage discharges and a ban on bonuses for Scottish Water bosses until the discharges end. Scottish Liberal Democrats have also called for targets to be set to reduce discharges. Renationalisation will not be effective and would make no difference to the issue. Scottish Water is publicly owned, and we simply do not know how many illegal sewage overflows are taking place. At least in England, according to the Government, 100% of sewage overflow outlets are monitored. However, it is unclear who is doing this monitoring. Can the Minister give information on this please?

We need strong action from the Government to regulate these water companies to stop illegal sewage overflows, coupled with a truly independent water regulator, to ensure that companies are held to account with transparent reporting, plus the acceleration of measures to upgrade sewerage systems and tackle overflows.

In the 2023 round of accelerated infrastructure delivery decisions, we sadly saw a number of nature-based solution project proposals rejected by Ofwat for not being able to reach technical specifications designed for concrete engineering. Ofwat needs to wake up and ensure that it is getting a lot more for its money than just carbon-creating concrete solutions.

Government communications are also not helping. Last July, the Secretary of State sent a communication to water companies through the EA, raising concern about the affordability of environmental investments and encouraging deferral of these investments to keep water bills low. I begin to wonder why the Government spent so much time getting the Environment Act through if they were going to undermine it from the start.

I am sure the Minister will tell the House that Ofwat is independent. However, a recent article in the Guardian of 1 February indicated that water company executives and the chairs of Ofwat and the Environment Agency went for dinner at an exclusive private members’ club to discuss how to quell public anger over rising bills and sewage spills—at an estimated cost of £1,200. It does not appear to me that either the Environment Agency or Ofwat are independent of the water companies—quite the opposite. A cosy chat over dinner about how to alter public opinion, without addressing the root cause of the problem, hardly seems likely to reassure the public.

On Tuesday this week, Southern Water was fined £330,000 over a raw sewage spill at a rural beauty spot. That killed more than 2,000 fish, with staff ignoring an alarm about the emergency for five hours. The YMCA Fairthorne Manor, an outdoor activity centre popular for school trips, had to stop water activities for 10 days after the incident and cancel more than 1,000 sessions. The health implications of sewage are why Liberal Democrats have previously called for sewage sickness victims to receive compensation, and we repeat that call today. It is not right that, as water companies make large profits, swimmers get sick. If someone is poisoned by sewage, they should be compensated for it.

A recent report by Surfers Against Sewage found that the number of people who fell ill after entering water between October 2022 and September 2023 was 1,924. This is three times the number reported in the previous year. The sewage spill that Southern Water was fined for on Tuesday, and many other spills like it, show the need for an effective Environment Agency.

Defra is heavily dependent on the monitoring and intervention of the Environment Agency. However, cutting the Environment Agency’s budget from £170 million in 2009-10 to £76 million in 2019-20 is not likely to assist this hard-pressed organisation to act effectively. A general rule of life is that you get what you pay for. It is essential that the Environment Agency is provided with adequate funding to conduct inspections and take remedial action.

According to a Guardian article on 13 February, the Levelling-Up Secretary, Michael Gove, proposed an amendment to the then Levelling-up and Regeneration Bill that would strike at the directive on preventing extra sewage going into waterways in sensitive areas by either updating infrastructure or buying biodiversity credits. The Secretary of State’s action would allow developers to ignore the rules that were so strenuously fought for in this Chamber by the noble Duke, the Duke of Wellington, and others. The Government are not taking this issue seriously. There is then the issue of axing the right of developers to connect to already overloaded sewerage systems, which is not currently anywhere on the horizon.

On Tuesday afternoon, as I sat in this Chamber waiting for the next business, a message came through to my private email from Southern Water, of which I am a customer. The heading was, “Tired of hearing about storm releases? Us too”. There then followed some excellent nature-based solutions that it is prioritising. Obviously, it was trying to head off criticism. However, when I got home and watched the local television news—delayed due to the football overrun—I saw the news of Southern Water’s fine, to which I referred earlier. This sewage discharge was in the next village to where I live. The worst aspect of this is that it took from 2019 until this week to come to court and be dealt with. No wonder water companies include the cost of possible fines in their business plans. To them, it appears to be all part of their operation.

The country cannot wait any longer. The countryside and our waterways are submerged by pollution. A radical overhaul is needed of the way in which water and sewage companies operate, and a more accountable replacement Ofwat needs to be delivered without delay. I beg to move.

--- Later in debate ---

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank all those who have taken part in this debate, especially the Minister for his response. I appreciate that he has inherited this problem, and I thank him for his very detailed response, which I shall study in Hansard. We have had a very varied debate; at the same time, there has been much agreement across the Chamber in condemning the overspills of sewage when there have been no unusual weather conditions requiring them. Until quite recently, water companies have discharged sewage and untreated water on hot, sunny days with impunity. We have heard how this has affected different people. I believe that we may possibly be on the cusp of a change.

I am grateful to my colleagues, who have spoken so passionately, knowledgeably and entertainingly on this subject. It is often overlooked that, at the point of privatisation, water companies were debt free. The noble Baroness, Lady Jones of Moulsecoomb, and my noble friend Lady Harris of Richmond also raised this. The noble Lord, Lord Sikka, makes a really excellent forensic accounting contribution—there is a role for him in another place if he should decide that this is enough. Although the water companies were debt free when they went private, that changed when the new private owners saw the glint of money for themselves and borrowed money to increase share dividends. Not all water companies followed that course, but many did. Some invested in the infrastructure, but this was often based on concrete solutions instead of the cheaper and more carbon-efficient nature-based solutions. The noble Baroness, Lady McIntosh of Pickering, has been campaigning for nature-based solutions for a considerable time, as has the noble Duke, the Duke of Wellington, who is not in his place.

I am grateful to the noble Lord, Lord Teverson, for raising the issue of farmers and phosphate discharge. Farmers have a role to play in improving the quality of our waterways, at the same time as producing food. The noble Duke, the Duke of Wellington, referred to the role of farmers.

I do not intend to return to the debate and run through every contribution, but I draw attention to one particular contribution. My noble friend Lady Miller of Chilthorne Domer has referred to the SUAR sludge. Many of the chemicals that she listed are known as forever chemicals. We need to deal with this problem, because it is extremely worrying that these chemicals should be on the land for ever.

All sides of the House are concerned about sewage pollution of rivers and waterways. The Minister referred to the Victorian sewer infrastructure, as did my noble friend Lady Pinnock. However, surely it is time that we had a better solution than the Victorian sewers. The regulator is not fit for purpose and needs to be replaced. I am not sure that it is comforting to know that everyone in the House agrees on this issue, but the power in numbers is considerable. I hope that the Minister is listening and will act accordingly, although I know that he is doing as much as he possibly can. It is time to introduce more stringent measures to improve the quality of our water, which should be crystal clear and gurgling in the streams instead of brown, sluggish and smelly.

Motion agreed.

Animal Welfare (Primate Licences) (England) Regulations 2023

Baroness Bakewell of Hardington Mandeville Excerpts

Tuesday 27th February 2024 Lords Chamber

When this statutory instrument comes into force, there will be no grandfather rights, so there is going to be excessive pressure on rescue centres. There is no guidance in the regulations as to how the current owners of these primates, or people who have been denied licences, should deal with them. I welcome these changes to the Animal Welfare Act 2006, but they do not go far enough. I support the regret amendment.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank the Minister for his introduction and the noble Baroness, Lady Hayman of Ullock, for her very thorough introduction to this regret amendment. I am grateful to her for the chance to debate the issue in more detail. I refer to my interests as set out in the register.

The Government carried out consultations in 2020, when there were 4,516 responses, with 98% of respondents expressing support. Further consultations were carried out from 20 June to 18 July 2023, when there were 643 responses, mainly from those involved in looking after primates, animal welfare charities, individuals who were known to already keep primates as pets and members of the public. On this occasion, 97% of respondents were in favour. The regulations will come into force on 6 April 2026. Given the high level of support from the consultations for these measures, why are the Government not implementing them sooner than April 2026? Is this due to the guidance not being published until the spring of 2024, to which local authorities, as the EM says,

“will be required to have due regard”?

I would like some clarification from the Minister, please. The noble Baroness, Lady Fookes, has referred to the lack of guidance.

The regulations are due to be administered by local authorities, which will inspect and grant licences, either by a veterinarian or by another suitably qualified and competent person. Nearly all Members have referred to this. Given that the Government do not really know just how many primates are being kept by private keepers, I am slightly alarmed at the impact on local authorities.

Paragraph 12.1 of the EM says that there will be

“no … impact on business, charities or voluntary bodies”.

However, it also says:

“There are between 1000 and 5000 primates being held as pets … and the majority of these are held by private keepers”.


For the benefit of the noble Baroness, Lady McIntosh of Pickering, that information is in the Explanatory Memorandum. There is a world of difference between 1,000 and 5,000. This is a huge number of very sensitive animals potentially being held in inappropriate circumstances, with the Government not having even an approximation of how many there are, let alone a precise number. Does the Minister believe that there are sufficient veterinary and other professionals capable of dealing with the numbers and complexities of the licensing regimes being proposed? The noble Lord, Lord Trees, and the noble Baroness, Lady Hayman of Ullock, have referred to this.

Primates currently comprise 502 extant species, which are grouped into 81 genera. These range from gorillas, orang-utangs, chimpanzees and baboons down to aye-ayes, loris and lemurs. Each is very different, requiring different treatment, diets and housing. The actual instrument gives extremely detailed restrictions and conditions on how primates are to be kept. This makes it obvious that the keeping of a primate by a private individual is difficult, if not impossible—quite rightly so.

Most primates are very social animals and need the company of others of their species. If not allowed to roam free in the countries of their origin, they should be kept in licensed zoos, whether private or open to the public. Only in these circumstances can we be sure that the stringent provisions of this SI will be enacted and that primates will be able to enjoy a life as close as possible to that which they would have enjoyed in the wild. The noble Baroness, Lady Fookes, has made reference to this.

The RSPCA is concerned that insufficient thought is being given to what will happen to the animals belonging to those primate keepers who do not receive a licence to continue to keep their pet. As has already been said, there are not innumerable spaces in animal welfare organisations or primate sanctuaries to manage the resulting flow of primates following the implementation of the SI. How are the Government going to ensure the welfare of these primates, which they have indicated should be kept in zoo-level standards?

I turn now to the issue of fees. Regulation 13 states that a local authority may

“(a) charge a fee in respect of any application relating to a primate licence under this Part; (b) charge a fee in respect of any inspection which it must or may arrange under this Part”.

This gives the impression that local authorities are free to set their own fees. That is good, but we could end up with dozens of different sets of fees up and down the country. There is also likely to be a different set of fees depending on the size and number of primates involved. While I welcome that local government itself will determine what the fee will be to cover its costs, some sort of yardstick would be useful. It is unlikely that local authorities will have veterinarians on their payroll, so they will have to buy in the services of the relevant qualified person both to inspect to grant the licence in the first place and to carry out routine inspections in the future to ensure that the terms of the licence are being adhered to. The noble Baroness, Lady McIntosh of Pickering, referred to this. No one in this Chamber is under any illusion about the state of local government finance. With populations increasing and social care under pressure, to be asking local authorities to take on yet more duties without providing the finance to cover them is unacceptable.

The instrument also has a section on rectification notices, and allows two years for steps to be taken to comply with licence conditions. This is far too long for a primate to be kept in conditions that do not comply with the licence granted. The noble Lord, Lord de Clifford, has referred to this. This might relate to poor diet or lack of space or stimulation, or it might relate to public safety. Does the Minister agree that the time for compliance for the rectification notice should be much shorter than two years?

I fear that I do not agree with others about a grandfather clause and allowing animals to stay with their keepers until the end of their life. This is a long time to be living in great misery.

Finally—others have referred to this point—paragraph 39 of Schedule 1, dealing with restraint, states:

“No primate may be handled or restrained except … insofar as … it is necessary for the purposes of an exhibition activity.”


Paragraph 42 says:

“No primate may be transported unless … it is necessary for the purposes of an exhibition activity”.


This gives the impression that a primate may be transported for the purposes of performing in front of others, and the public. Can the Minister say what is meant by

“for the purposes of an exhibition”

because, as written, it is extremely worrying? The noble Baroness, Lady Hayman of Ullock, raised this, as did the noble Baroness, Lady Fookes.

I remain concerned that, unless these measures are implemented quickly, some primates will live in unsuitable conditions, without the company of their fellows, and be miserable as a result. Although it is not perfect, I support the general thrust of this SI.

[Lord Douglas-Miller (Con)]

I thank all noble Lords for their valuable contributions to the debate. I have listened carefully to the points made by the noble Baroness, Lady Hayman, in support of her amendment, and to other contributions in today’s debate, and I have been struck by our shared commitment to act to improve the welfare of privately kept primates. It is important that we do act.

We introduced this SI in response to a call for evidence and consultation exercises that confirmed the extensive mistreatment of privately kept primates. Some of this evidence was, frankly, horrible and highlighted primates being kept in poor conditions, in small enclosures or birdcages, and suffering from fractures or misshapen bones. It is absolutely right that the Government take action to address primate welfare in non-zoo settings.

It has been encouraging to note that the strong response to the consultation exercises has been to welcome the Government’s decision to put a licensing scheme in place for the keeping of primates to address their specialised needs. It has also been encouraging today to note support from across the House for our objective of improving primate welfare. I am grateful to the noble Baroness for giving me the opportunity to state clearly the Government’s view. I recognise her and other noble Lords’ concerns and will seek to address them now.

The amendment suggests that the SI does not ban the keeping of primates as pets. I have explained in my opening remarks that that is essentially incorrect. The vast majority of animals kept as pets in this country do not need to comply with the kinds of licensing conditions contained in this SI. This is not semantics. Primates have particular welfare needs that cannot be met by keeping them as household pets, and this SI seeks to end that practice. Those currently keeping primates in birdcages and in other wholly inappropriate conditions will no longer be able to do so. Only those people keeping or wishing to keep primates who can demonstrate compliance with the licensing conditions and welfare standards to the satisfaction of enforcement authorities will be able to keep primates privately. These conditions are stringent and are the kinds of measures that would not apply to household pets.

The noble Baroness’s amendment also regrets the absence of a grandfather clause, as was raised by a number of other noble Lords, and advocates government policies to support rehoming. Given the evidence that we have about mistreatment of primates, the Government do not believe that continuing to allow private primate keepers to retain primates in poor conditions is the best thing for these animals. Future rehoming and surrender arrangements are very important concerns, of course, but the Government do not believe that the answer is to allow suffering animals to be kept as they are. Instead, this SI provides a two-year period before the requirements come into force to provide keepers time to comply with the requirements. Until we license, we will not know the scale of primate keeping, but I can assure the House that we will continue to work closely with rescue and rehoming charities to monitor the impact of the SI on rehoming activity, and to respond accordingly to evidence.

The noble Baroness, Lady Hayman, asked whether we might consider keeping a register of primate specialists. I shall certainly take that suggestion back to the department. I can confirm that this legislation applies only to England. If you have a criminal conviction for animal welfare issues, you will not be eligible for a primate licence.

The noble Baroness, Lady Bakewell, and others asked about the licensing conditions that must be met. The primate licence will be issued only to those who can meet the welfare standards set out in the regulation. Those standards are akin to the standards that licensed zoos must meet and include requirements such as microchipping, local authority inspections and record-keeping. They also include minimum welfare requirements, such as emergency arrangements and requirements regarding care and maintenance, nutrition and feeding, physical health, environment, behaviour, handling and restraint, transport, and breeding.

Peatlands

Baroness Bakewell of Hardington Mandeville Excerpts

Thursday 22nd February 2024 Lords Chamber

[Lord Douglas-Miller (Con)]

My Lords, we need to give the horticultural industry some time to adapt. I assure the noble Baroness that the Government are committed to banning peat in horticulture. The reason we have not got there yet is primarily down to parliamentary time. I hope that we will be able to address that issue very shortly.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, 95% of respondents to the Government’s 2022 consultation supported a legal ban on retail sales. Retailers, including B&Q, Tesco, the Co-op, the Royal Horticultural Society and Dobbies, have ended the sale of peat in bags of growing media. The horticultural industry requires clarity. When will it get it?

[Lord Douglas-Miller (Con)]

As I said in answer to the previous question, the Government are committed to this ban, and it will be in place by 2030.

Water and Sewage Companies: Directors’ Remuneration

Baroness Bakewell of Hardington Mandeville Excerpts

Thursday 22nd February 2024 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I congratulate the noble Lord, Lord Sikka, on his excellent introduction to this extremely important subject. England’s water system is at breaking point. Water companies are responsible for one of the worst environmental crises in the UK: the illegal dumping of sewage into rivers, lakes and coastlines through storm overflows.

The scale of the sewage crisis afflicting our rivers and coastal waters is staggering to comprehend. In 2021, the water companies were responsible for 368,966 spills, during which raw sewage and untreated wastewater were pumped into aquatic environments for a total of 2,650,290 hours. The noble Viscount, Lord Stansgate, has given some excellent statistics on this.

England is home to 85% of the earth’s chalk streams—rare and precious habitats that the Government and water companies should recognise that they have a particular duty to protect, instead of allowing them to be devastated by raw sewage overflows. If my colleague Lord Chidgey were still with us, he would have something to say about this.

The Conservatives have done nothing to stop water companies polluting our rivers with sewage. They have consistently voted against tougher action to stop illegal sewage overflows, while the water regulator, Ofwat, has said that only six of the 11 sewerage companies met their sewage overflow targets. This is unacceptable.

Of the 827 illegal dumps of sewage in 2021 and 2022, only 16 resulted in prosecution. This means that this Government have effectively decriminalised the dumping of sewage in our rivers, lakes and coastal waterways. It is sadly now true that it is cheaper for water companies to pay the fine for this illegal activity than for them to invest in the infrastructure to future-proof and clean up our waterways. The cost of fines is written into their business plans.

Since privatisation, £65.9 billion has been paid out in water company dividends. There was a 20% increase in executive pay last year, and Britain’s privatised water and sewerage companies paid £1.4 billion in dividends in 2022, up from £540 million the previous year. This was despite rising household bills and a wave of public outcry over sewage leaks.

This has gone on long enough. Water companies must be brought to account for their actions. The Government must ensure that water companies invest their profits now, not by 2050. That is too far away. We need to ensure that the water in our lakes, rivers and seas is not filled with sewage. Discharging raw sewage is a risk to environmental health, public health, animal welfare and our economy. It should not continue.

British people are fed up with their beaches being closed due to sewage while water company executives are making millions and holidaying abroad. The Liberal Democrats continue to call for the Government to instigate a sewage tax. This would be a 16% tax on pre-tax profits, providing a £340 million fund to clear up the rivers that have been damaged and to fix the sewerage system. This would be in addition to the current 19% rate of corporation tax.

With only 14% of English rivers in a good ecological state, reforming water and sewerage companies is essential. We on these Benches support a public benefit company model for water companies, so that particular economic and environmental policy objectives must be considered explicitly in the running of the companies. While sewage is pumped into our waterways and our water infrastructure is leaky and outdated, water firms are handing out large profits to overseas investors and bonuses to their CEOs. The British taxpayer deserves better.

It is time for water company reform. Ofwat and the water companies should set minimum criteria for the value, scope and eligibility criteria for social tariff schemes across the country. Water companies should put a share of their own profits into social tariffs. They should be encouraged to work more collaboratively to raise awareness of priority services, as well as being more proactive in identifying customers in need of temporary support.

This is an emotive subject, but one that has to be tackled. I look forward to the Minister’s positive response.

Animal Welfare (Livestock Exports) Bill

Baroness Bakewell of Hardington Mandeville Excerpts

2nd reading
Wednesday 21st February 2024 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, the Minister has set out clearly the purposes and remit of the Bill, and we have heard very interesting contributions from across the House. I support the Bill and the contributions that have been made. These measures were in the Conservative manifesto, and the Government are keen to get the Bill in statute. Before they go to the electorate again, they want to be able to say, “We delivered on our manifesto”.

Sadly, this is not exactly the case. Before I go on to deal with what the Bill includes, I will mention those issues which it does not: banning puppy smuggling, amending the Zoo Licensing Act 1981, banning the keeping of primates as pets, and protecting sheep from dangerous dogs.

When the Government abandoned the kept animals Bill, they were relying on a number of Private Members’ Bills and smaller government Bills to fill the gaps. Some Private Members’ Bills were successful. The banning of glue traps was one example, thanks to the intrepid noble Baroness, Lady Fookes. Others, such as banning the import of hunting trophies, were not.

However, we are today debating the Animal Welfare (Livestock Export) Bill. We have heard from many who, quite rightly, are passionate about animal welfare—the noble Baronesses, Lady Fookes and Lady Hodgson of Abinger, and the noble Lord, Lord Trees, are such. I am grateful for the briefings I have received from the NFU, the RSPCA, Wildlife and Countryside Link, Compassion in World Farming, and the House of Lords Library.

As has been said, the Bill prohibits the export of cattle, sheep, goats, pigs and equines for slaughter or fattening for subsequent slaughter. No animals have been transported for those purposes since December 2020, which is due entirely to Brexit and there no longer being any suitable border control posts in French or Belgian ports to receive the live exports. However, there is nothing to stop suitable border control posts being set up specifically for that purpose in future. It is therefore essential that UK law is changed now to prevent the export of live animals for slaughter or fattening before slaughter.

The ban does not apply to live animal movements for breeding and competition purposes, provided that adequate safeguards are in place to protect the animal’s health and well-being during transportation. That provides much-needed reassurance to the owner of equines and other breeding stock. Day-old chicks are exempt from the provisions of the Bill, as we have already heard.

In September 2021, the Environment, Food and Rural Affairs Committee in the other place published a report that welcomed the proposed legislative ban included in the Bill. That was over two years ago—although nothing as long as the noble Baroness, Lady Fookes, has been waiting. This issue is taking far too long time to get into statute. Let us hope that we can speed up the process.

There is an issue around the number and distribution of abattoirs, as the noble Lord, Lord Trees, and others referred to. In the past, there were abattoirs in easy reach of farmers; however, that is no longer the case and farmers are taking their animals further and further to slaughter. That is good for neither the animals nor the farmers, who are spending so much time away from their farms. I recently met a colleague whom I had not seen for some considerable time, and asked how she was doing. She said that she had given up her farming, as she was having to transport her stock over 200 miles for slaughter. She felt that that was not good for her animals and the cost made it uneconomic to continue. The noble Lord, Lord Carrington, also referred to the journey times to abattoirs. I understand that the Government are making £4 million available in the form of grants to support smaller abattoirs to improve, but also needed are more accessible abattoirs, so that farmers do not have to travel so far. Are the Government planning to increase the number of abattoirs, particularly in rural areas? The noble Baroness, Lady Hodgson, also raised that issue.

The majority of the comments that I have received have been overwhelmingly in favour of the Bill. However, the NFU has expressed concern that no impact assessments were provided with the proposals. The impact assessment that was provided had been produced for the kept animals Bill, which was subsequently abandoned. That IA indicated that a loss of around £5.2 million over a 10-year period would be suffered, mainly by sheep exporters; the noble Lord, Lord Carrington, referred to sheep farmers. That is a significant sum for a section of the farming community that is generally not affluent.

The NFU is concerned that British farmers will be undercut by imports that do not meet the same high animal welfare standards that exist here. The NFU is calling for the establishment of core production standards that apply to agri-food imports. That would assist in providing a level playing field for British farmers. I fully support the NFU on that and agree with the right reverend Prelate the Bishop of St Edmundsbury and Ipswich. The British Veterinary Association and the Farmers’ Union of Wales also support the call for British livestock farmers not to be undercut by trade deals that do not meet equivalent animal welfare standards. Can the Minister give reassurance on that issue?

The Bill does not ban the import of live animals for slaughter, as the noble Baroness, Lady McIntosh, referred to. In July last year, the noble Lord, Lord Benyon, stated that,

“from 2019 to 2021, only 91 cattle and 14 sheep were imported for slaughter from the mainland EU”.—[Official Report, 10/7/23; col. 1512.]

Can the Minister give an update on that figure and say how many animals are currently imported for slaughter, if any?

The Bill does not apply to Northern Ireland, and we have heard from some of those directly affected by that this afternoon—the noble Lord, Lord Dodds, and the noble Baronesses, Lady Hoey and Lady Ritchie. However, the movement of live animals covered by the Bill is still allowed throughout the island of Ireland, as Northern Ireland is treated as part of the EU, which we have already heard eloquently explained. The movement of animals within the UK, the Channel Islands and the Isle of Man is still allowed. However, all live ruminants from Great Britain are currently banned from entering Northern Ireland due to a case of bluetongue virus in Kent. Is this ban likely to be lifted any time soon?

Compassion in World Farming says that in 2019-20, animals were transported to designations in Bulgaria and Hungary via Northern Ireland. Even when exports were destined for the Republic of Ireland, there was no way of knowing what the final destination would be, as Eire has a large live export trade to the EU and the Middle East. However, once the Bill becomes law, this trade will end and the risk to animal welfare will cease from GB.

The Northern Ireland livestock market is affected by live animal exports restrictions, as in 2020 this trade was worth £938 million—that is, 31% of Northern Ireland total exports to Ireland. The NFU believes that the live trade is essential to stimulate competition for livestock and to ensure that farmers have access to the best paying markets—the noble Baroness, Lady Ritchie, also referred to this. The RSPCA believes that the wording of the Bill is compatible with WTO rules and meets the conditions of the EU-UK Trade and Cooperation Agreement and the Northern Ireland protocol.

This is a fairly short, uncomplicated Bill. It aims to prevent animals being shipped overseas for fattening and slaughter, a process which causes distress as the animals are often kept in restricted conditions and have limited access to food and water. We have heard many examples this afternoon describing the suffering of the animals as a result. It seems that all contributors to this debate are in agreement. As a nation of animal lovers, the public are fully on board with the aim of the Bill and want it passed quickly. The Bill is not completely perfect but I urge all present to support it unamended to hasten its passage.

Environment Agency: Flood Defence Expenditure

Baroness Bakewell of Hardington Mandeville Excerpts

Tuesday 20th February 2024 Lords Chamber

[Lord Douglas-Miller (Con)]

The Government continue to invest in flood and coastal defence maintenance, with an extra £22 million per year for the current spending review period. Furthermore, £25 million from the capital programme has been reallocated to maintenance this year. In 2022-23, the Environment Agency spent more than £200 million maintaining flood risk assets across the country. Across the country we have about 90,000 flood risk assets which are checked annually by the Environment Agency.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, internal drainage boards provide essential services to areas that are habitually flooded. Currently, they are funded through district council tax. This is already stretching budgets, as IDB levies were increased by 18% last year. The Government have provided £3 million on a short-term basis. A more secure long-term solution is needed. Can the Minister say when this will be forthcoming?

[Lord Douglas-Miller (Con)]

Just today at the NFU conference, the Prime Minister announced new funding packages available to drainage boards across the country.

Water Industry (Special Administration) Regulations 2024

Baroness Bakewell of Hardington Mandeville Excerpts

Monday 19th February 2024 Grand Committee

With those few remarks, I support the instruments before us this afternoon.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank the Minister for his introduction to these two SIs, which make provision for the continuation of water supply to households should a water company be teetering on the verge of insolvency. I welcome this move to protect householders and businesses if that happens.

A special administration regime—SAR—allows the Government to prepare for all eventualities to ensure uninterrupted provision of this vital public sector service. Each service SAR is unique. Those governing the water industry—the WISAR—are distinct and come into play when a water industry company becomes insolvent. This is obviously a serious matter. I ask the Minister: how many of the country’s water companies are on the verge of bankruptcy? Is it a couple or is the prediction in double figures? Is the number of water companies struggling confined to England or are there similar threats of insolvency in Wales, Scotland, and Northern Ireland?

Paragraph 7.5 of the Explanatory Memorandum indicates that the High Court will appoint a person to manage the affected water company and that this will be on the recommendation of Ofwat or a Defra Minister. I would like an assurance from the Minister that this person will not be someone who has previously been involved in the running of the water company under consideration, nor someone who has been involved in the running of another insolvent water company. This must be someone who is completely independent in every sense of the word.

Apparently, the Flood and Water Management Act 2010 (Commencement No. 10) Order 2024 covers the arrangements for hive down provisions, which the Minister referred to. The Explanatory Memorandum states:

“This will allow otherwise viable water industry companies to enter a special administration, restructure its debts and then exit the SAR as a going concern”.


Not being a legal expert, I searched for the meaning of a hive down. I found this:

“A hive down is the transfer of all or part of the assets or business of a company to a subsidiary—usually a new subsidiary”.


Paragraph 7.6 of the Explanatory Memorandum indicates that this would allow the new subsidiary

“to benefit from potential tax savings”.

The process allows new owners to acquire a “clean” water industry company that has no existing liabilities. This is exactly what the current water companies inherited at the point of acquisition in the 1980s.

I sometimes despair at the way in which we as a country conduct ourselves. It seems to me that a water company facing insolvency would welcome the chance to create a subsidiary company, get rid of its debts—or restructure them, as the Explanatory Memorandum euphemistically calls it—and start again, delivering the same lack of investment and poor repair service. Unless I have missed it, there is nothing in the Explanatory Memorandum that prevents previous CEOs or directors carrying on their inefficient ways from the insolvent water company into the new subsidiary. Can the Minister comment on the likelihood of this happening under the proposals for a hive down?

I understand that the SAR rescue purpose applies only where the special administration was based on economic insolvency grounds, not performance grounds, but I am not sure that that is what the Minister said. Can he give more information on poor performance and not meeting the government-set vital environmental targets and say whether this is also a consideration? Will violation of environmental law constitute a failure to fulfil statutory duty, under the terms of Chapter II of the Water Industry Act? Do the Government commit to applying for a special administration order where a company shows consistent and flagrant breaches of its environmental duties?

Paragraph 7.12 gives a lot of detail about the process with a list of modification orders. These modifications indicate that only the Secretary of State or a Welsh Minister can make an application for a water industry company to go into administration. It further states that the interests of the customer should always be considered. I would have assumed it would be a given that the customer would always be the first to be considered.

There is also a section in the EM, at Paragraph 7.18, indicating that the appointed special administrator’s conduct may be challenged by the relevant Minister or Ofwat. Can the Minister give an example of what kind of conduct might qualify for a challenge by the Minister or Ofwat?

There is reference in paragraph 7.21 of the EM to paragraph 91 and the power of the sponsors to apply to the court for the replacement of the special administrator. Since it is necessary to put this information in the EM, this would indicate that it is not a one-off occurrence and is something that has happened in the past. Would the Minister care to comment?

The changes that the Government are proposing will also enhance the ability of special administrators to dispose of fixed-charge property without the consent of the charge holder. In this case, the fixed-charge holder receives only “appropriate value” rather than the standard test of “market value”. Can the Minister say whether this will lead to an increase in valuation disputes in challenges to the administration of sales of water company fixed-charge assets?

There has, as usual, been no guidance to accompany this instrument and no impact assessment. The reason given for no impact assessment is that the impact is alleged to be minimal, with the net present value of the SI over a 10-year evaluation period likely to be less than £55,000. Is this £55,000 a one-off or annually? If the latter, that is more than half a million pounds. Can the Minister say whether this figure includes the bankruptcy costs? If the debt is to be restructured so that the new water company can continue debt free, there will surely be some impact on the creditors of the water company at the point of insolvency. Can the Minister comment?

I understand that if a water company is about to be insolvent, something has to be done to allow water and sewage services to be provided on a continual basis to domestic householders and businesses, some of whom use vast quantities of water every day. However, I remain concerned about this process. It seems to me that those who had been running the previous, now insolvent, water company can simply transfer to running the wholly-owned subsidiary which will be set up under the WISAR. I also remain concerned that the SI makes no reference to the sewage crisis. The noble Baroness, Lady McIntosh, referred to that. Can the Minister confirm that the special administrator will be able to discharge environmental duties as well as financial duties?

I realise that I have asked a number of questions, but I hope that the Minister will be able to answer them. The Liberal Democrat policy is to reform water companies into public benefit companies. While this may not solve all the problems of the ailing water industry, it would certainly bring a great deal more transparency to the issues. I am looking forward to the Minister giving considerable reassurance on this extraordinarily complex matter.

[Baroness Hayman of Ullock (Lab)]

My Lords, I start by thanking the Minister for his thorough introduction to these two SIs. As he said, the first one updates the special administration regime for water industry companies, looking at general insolvency issues. We welcome that; it needs to be looked at and sorted out.

The second SI is pretty technical. It allows part or all of a water company’s undertaking to be transferred to a wholly owned subsidiary, as we have heard, and for securities to be passed over to another water company. The noble Baroness, Lady Bakewell of Hardington Mandeville, talked about this to some extent, so I will not go into detail, but I stress the importance of minimising costs to the taxpayer if and when the companies need extra support, even if that is temporary.

We support these regulations because they give more security to people’s water provision. Clearly, it is essential that customers have a continuous provision of water services, irrespective of how the water company is performing. Water is needed for life, so this is important. However, I am sure that the Minister is extremely aware that further challenges face the water sector at present. Some pretty fundamental issues need to be tackled that clearly go beyond the SIs in front of us.

The fact that these legislative changes are necessary reflects the serious situation in which many water companies are not just failing to protect the environment but struggling financially. The noble Baroness, Lady Bakewell of Hardington Mandeville, asked about the number of water companies that are facing such problems. Of course, Thames Water is the one that has been in the media recently and there have been serious concerns about its solvency, but I also understand that Thames Water, Southern Water and South East Water have been using up to 25% of customer bills to service the huge debts that they have built up. Clearly, the customer should not be picking them up.

The noble Baroness, Lady McIntosh of Pickering, talked about the impact on consumers, picking up on paragraph 7.6 of the Explanatory Memorandum. I underlined the bit that she referred to specifically to ask the same questions that she did, so I would be grateful for a clear answer about that and the impact on consumers in this area, for example.

It is important that we have a radical rethink of how the water sector, regulators and Government all work together to ensure stability. I am sure the Minister would agree with me on this, but it would be good to get confirmation that the Government are looking more broadly at stability issues for water companies.

We know that the special administration order is intended to ensure that water services are not interrupted when a water company becomes unviable. The noble Baroness, Lady Bakewell of Hardington Mandeville, talked about environmental duties and impacts which could be interrupted when a company becomes insolvent. I am particularly concerned about that. When this was discussed in the other place, the Minister was asked whether

“the new regulations … guarantee that any special administrator will continue to discharge a company’s environmental obligations, including investment commitments under the water industry national environment programme, catchment plans and infrastructure upgrades”.

I remind the noble Lord of the Minister’s response during that debate. He said:

“Every water company is specifically regulated by the Environment Agency, as well as Ofwat. The Environment Agency will have powers if water companies are owned and operating under the regime they operate under now, or should they enter special administration”.—[Official Report, Commons, Fourth Delegated Legislation Committee, 6/2/24; cols. 5-9.]


I am not sure whether that answers the question, particularly asked by the noble Baroness, Lady Bakewell, about what those environmental obligations and duties would be if it is interrupted. You may potentially have a gap; how can we ensure that it is managed smoothly if it has been transferred across and who, outside the Environment Agency, is responsible for that? Someone has to report that to the Environment Agency and it has to go through that due process, but where does that environmental obligation sit during an insolvency, potentially with a move to a subsidiary? It may well be that the Environment Agency takes it away and manages that separately, but these things are normally done with Ofwat and all the water companies together. I just want clarity around that. In talking about clarity, I hope that I have made myself clear.

Food Import Requirements

Baroness Bakewell of Hardington Mandeville Excerpts

Wednesday 14th February 2024 Lords Chamber

[Lord Douglas-Miller (Con)]

I thank my noble friend for his question. The Government take the issue of food security extremely seriously, and we are absolutely committed to producing high-quality British food for British consumers. Getting the balance right between what we produce through our SFI programme—or our ELMS programme, I should probably say—is a fine judgment between getting the environmental and biodiversity improvements we all want to see, and producing food for the country.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, with beef and pork exports to the EU down by more than 20%, and the import of apples down 16.8% and oranges down 18.2%, what steps are the Minister and his Defra colleagues taking to ensure that, first, British farmers are not going out of business, and, secondly, supplies of essential foods are protected for the British consumer?

[Lord Douglas-Miller (Con)]

I thank the noble Baroness for her question. As I say, the Government are completely committed to domestic food production. I do not see that the introduction of the BTOM system has any bearing on what we import or export into or out of the UK.

Sea Fisheries (International Commission for the Conservation of Atlantic Tunas) (Amendment) Regulations 2024

Baroness Bakewell of Hardington Mandeville Excerpts

Tuesday 13th February 2024 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, these regulations were laid in draft before this House on 12 December 2023.

The purpose of this instrument is to make provision to ensure that the United Kingdom, as a member of the International Commission for the Conservation of Atlantic Tunas, henceforth referred to as ICCAT, can continue to meet the full range of its international obligations in relation to the convention which governs ICCAT. The UK has an obligation under the United Nations Convention on the Law of the Sea to co-operate on the management of shared fish stocks, including through appropriate regional or sub-regional organisations. ICCAT is one such example. It is responsible for ensuring that fisheries for tunas and tuna-like species, such as swordfish, in the Atlantic Ocean are managed sustainably. The UK became an independent contracting party to the convention—in other words, a member of ICCAT—on 1 January 2021, after depositing an instrument of accession following EU exit.

As a member of ICCAT, the UK must ensure that we are able to implement and enforce binding measures, known as recommendations, which are agreed by contracting parties under the convention. The UK must ensure that our domestic laws fulfil these international obligations. This instrument updates and amends various regulations of retained EU law to implement recommendations adopted by the commission immediately prior to and since the withdrawal of the UK from the EU. Where appropriate, this instrument also makes amendments to reflect the UK’s status as an independent coastal state.

I will now go through each element of the regulation in turn to briefly explain the amendments being made to retained EU law. Regulation 2 of the instrument removes provisions from Council Regulation 1936/2001, which laid down control measures applicable to fishing for certain stocks of highly migratory fish. It also included provisions that regulated the farming of bluefin tuna. The UK, however, does not farm bluefin tuna. These provisions have therefore been removed as they are not relevant to the UK.

Regulation 3 amends Council Regulation 1984/2003. It now correctly reflects the convention’s requirement for a statistical document to accompany imports of swordfish and bigeye tuna into the UK. Other amendments are made for clarity and to ensure that the amended provisions are enforceable. For example, amendments to the description of fish captured no longer reference the 1984 version of the EU’s combined nomenclature. They are instead replaced with references to the UK commodity codes used in the UK’s customs tariff.

Regulation 4 of this instrument updates Regulation EU 640/2010 to mandate the use of an electronic catch documentation system for bluefin tuna, replacing the use of clerical documents. Further amendments are made to ensure that the new requirements are clear and enforceable, as well as outlining the limited circumstances in which a paper catch document may be used instead of the electronic system.

Regulation 4 also amends the descriptions of fish captured within Regulation EU 640/2010. These descriptions have been updated with references to the commodity codes found in the UK’s customs tariff. This amendment makes the description of fish clear and ensures that the regulation is enforceable.

Regulation 5 removes provisions in Commission Delegated Regulation EU 2015/98, which established derogations from landing obligations in order to fulfil ICCAT requirements. Instead, these provisions are covered in Regulation EU 2016/162. Removing these provisions from Commission Delegated Regulation EU 2015/98 avoids duplication and provides clarity.

Regulation 6 of this instrument amends Regulation EU 2016/1627, which implemented ICCAT’s multiannual recovery plan for bluefin tuna in the eastern Atlantic and the Mediterranean. Since the recovery plan was introduced, I am pleased to say that stocks of bluefin tuna have improved significantly. The recovery plan has now been replaced with a multiannual management plan. Regulation 6 therefore comprehensively amends Regulation EU 2016/1627 to ensure that it correctly reflects the UK’s obligations under ICCAT in relation to the management plan and the UK’s catch quota.

A multiannual recovery plan was also developed for the management of swordfish in the Mediterranean. The EU gave effect to the recovery plan under Regulation EU 2019/1154, which was retained in our domestic legislation at the point of EU exit. However, as these provisions relate to swordfish in the Mediterranean, Regulation 7 of this instrument revokes the substantive provisions of Regulation EU 2019/1154 as they are not relevant to the UK.

Regulation EU 2019/1241 sets technical measures for the conservation of fisheries resources and the protection of marine ecosystems. Regulation 8 of this instrument amends Regulation EU 2019/1241 to insert minimum conservation reference sizes for bluefin tuna specified under the convention. By making this amendment, all minimum conservation reference sizes will be specified within one regulation rather than contained in different pieces of retained EU law, ensuring clarity within our domestic legislation.

In addition to amending retained EU law, Regulation 9 of this instrument amends the Common Fisheries Policy and Aquaculture Regulations 2019 to remove references to obsolete legislation. Specifically, amendments have been made to remove provisions relating to retained EU law; they have been removed and replaced with Regulation EU 2017/2107, which lays down management conservation and control measures within the conservation area of ICCAT.

The devolved Administrations are supportive of the amendments made in this instrument, ensuring that the UK can continue to meet in full its obligations as an independent contracting party to the ICCAT convention. If this instrument is not passed, the UK will not only fail to meet its international obligations under the convention; by not implementing enforceable management and traceability systems, we risk undermining efforts made over the past 17 years to ensure the sustainable management of Atlantic bluefin tuna stocks.

I hope that I have reassured all noble Lords on the purposes and aims of this statutory instrument, ensuring the continued sustainable management of this important fishery. For the reasons I have set out, I commend the regulations to the Committee. I thank noble Lords for their attention and remain at their disposal for any questions or discussion on this matter.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I am grateful to the Minister for his introduction to this statutory instrument, which covers the International Convention for the Conservation of Atlantic Tunas, known as the convention.

While a member of the EU, the UK had no quota for tuna and tuna-like species. However, following Brexit, we are entitled to a quota as tuna stocks have apparently improved. The SI makes changes to retained EU law in eight previous sets of regulations, including the Common Fisheries Policy and Aquaculture (Amendment etc.) (EU Exit) Regulations 2019. That is quite a lot of change and I am grateful to the Minister for going through each of the eight sets of regulations.

Paragraph 7.2 of this instrument’s Explanatory Memorandum explains how the UK has acquired a quota for bluefin tuna

“as an independent contracting party … in line with the UK-EU Trade and Cooperation Agreement”.

From hereon in I shall refer to “BFT” because, as noble Lords can hear, I am getting tongue-tied in saying “bluefin tuna”. Despite not stating what the quota is, the EM indicates how the requirements will apply to UK fishing vessels catching BFT in the convention area; this includes the

“offence, penalty, and enforcement provisions”,

which

“have been added directly to relevant retained EU law to avoid … ambiguity as to whether existing enforcement provisions would apply to the newly amended provisions”.

A read through the government website’s guidance gives information about the size and length of the vessels, as well as the bait, to be used for catching BFT. It also gives detailed information about how such catch can and cannot be landed, including returning undersized live tuna to the sea, recording all catch and keeping on board dead catch for which there is no authorisation for landing.

However, it is not exactly crystal-clear. According to the government website, but not the EM, the BFT quota allocated in 2023 was 65 tonnes—an increase on the quotas for 2021 and 2022. The UK is to use 39 tonnes of that quota to trial a new, small-scale commercial fishery to see whether it will benefit UK fishers. Assuming that the 2024 quota remains the same as the 2023 one—65 tonnes—this leaves 26 tonnes of BFT to be distributed between a possible 10 available licensed authorisations. I am neither a commercial fisher nor a recreational one, but it seems to me that potentially receiving only just over 2 tonnes of the BFT quota will not be sufficient for many, especially in the commercial sector. I note that the regulations prohibit farming and the use of traps in UK waters or by UK vessels in the convention area for BFT. This is a good thing if enforced.

--- Later in debate ---

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Lord for his comprehensive and detailed introduction. The noble Baroness, Lady Bakewell of Hardington Mandeville, went into some detail about what is in the SI, so I do not need to go over it all again.

As the noble Lord mentioned, it is important that tuna catches are managed sustainably—so it is important that we have this SI—and that must be done while we fulfil our international obligations. We have heard that bluefin tuna stocks in our seas have increased recently. That is incredibly important, but it is also important, as the noble Baroness said, that that recovery is properly protected. It is good that we are debating those aspects.

I will raise two brief points. The noble Baroness talked about quotas. Paragraph 7.7 of the Explanatory Memorandum refers to the tuna catch quota. As she said, we did not previously have a separate quota because we came under EU rules. It would be good to understand what our quota is now and how it is operating now we have left the EU, because it is not clear what kind of catches will be allowed. If we are to manage the increase in stocks, it is important that this is clear to everybody.

Paragraph 10.1 of the Explanatory Memorandum refers to the targeted consultation. I thank the noble Baroness for going into such detail about this, because when I clicked on the website link it would not work.

[Baroness Bakewell of Hardington Mandeville (LD)]

It did not work for me the first time either.

[Baroness Hayman of Ullock (Lab)]

Perhaps the noble Lord can take that away and make sure the link works properly in the future. It was a bit frustrating that I could not get any detail on it. Having said that, we completely support this legislation and we need to move on with it.

Sustainable Farming Incentive: Species Management and ELMS

Baroness Bakewell of Hardington Mandeville Excerpts

Thursday 25th January 2024 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I congratulate the noble Earl, Lord Caithness, on securing this important debate and on his excellent introduction to the subject, and welcome the Minister to his first debate in the Chamber. I am pleased to be able to tell the noble Lord, Lord Sewell of Sanderstead, who is a pleasure to follow, that there is a lot of innovation in science and technology going on in the agriculture industry already.

Every day of every year, the country and its residents ask farmers to perform a miracle. Without this miracle, we simply could not survive as a human population. We ask them to produce the healthy, nutritious and affordable food that sustains us all as a human population. At the same time, we ask them to deliver positive outcomes for the environment, our landscapes and our biodiversity. I have met countless farmers who have decided to ignore the binary choice of producing food or improving the environment. They already embrace a farming approach that seeks to deliver the production of food alongside, and in harmony with, environmental enhancement and biodiversity gain.

There is a great deal of consensus, both within this Chamber and across our rural communities, that this approach is the only way to succeed in future. We cannot deal with the nation’s vital food security without our hard-working farmers. At the same time, it is impossible to rectify the environmental damage that has occurred in recent decades without the help, support and local knowledge that exists within our farming communities.

When first introduced, ELMS had three strands—sustainable farming initiative, local nature recovery and landscape recovery. SFI was a universal scheme available to all farmers and those with land-managing responsibilities. But there have been changes along the way. In January 2023 came the announcement that ELMS would no longer introduce a new local nature recovery scheme. This would instead evolve into the existing Countryside Stewardship scheme. The Government’s rollout of ELMS has been criticised for creating complexity and uncertainty among farmers and other land managers, as was excellently demonstrated by the noble Lord, Lord Robathan.

If the recent changes to SFI announced by the Secretary of State do not underpin this crucially important balance, it will fail. Unfortunately, recent experience with the SFI does not bode well. Since the original launch of the SFI, we have seen flip-flopping after flip-flopping of the measures being incentivised. The constant altering of payment rates and a horrendous underspend have seen farmers’ funding cut by circa 50%, while at the same time their prospects of receiving new funding have become more and more challenging. While there are substantial increases to a few payment options in the January announcement, many are unchanged. There is less than hoped for to attract upland and hill farmers to change their farming practices to deliver more for nature, given that much land is tenanted or common land.

Establishing a single application process to enable farmers to apply for the SFI and the mid-tier Country Stewardship scheme at the same time is welcome. However, the Government have said that this new scheme will be available from summer 2024. The Country Land and Business Association has criticised the Government for not opening the applications for the updated scheme until summer 2024, arguing that farm businesses urgently need more financial support.

It takes six to 18 months to negotiate a Commons agreement, so if the detail is not available until summer 2024, new agreements will not start until late 2025. This is all taking too long. While there are some generous supplements proposed for rewetting and natural flood management, these require farmers and commoners to be able to undertake capital works. But the requirement to defray those substantial costs in advance before being reimbursed remains a major block to moorland restoration. Overall, for the uplands it is too little, too slow and too vague. Historically, this Government wanted to achieve 70% of farmers entering 70% of their land into the SFI. Today, less than 10% of farmers have applied to SFI.

In turn, an annual underspend of over £100 million in such an important policy area is bad enough, but when, in the last few years, over £100 million a year has been taken from the funding that was already going to the very community we are seeking to support, it is almost unforgivable.

The underspending on the farming budget is justly criticised. As part of the rollout, the Government said that they would maintain the annual farming budget for England at £2.4 billion, as has already been referred to. However, as has already been said, the Guardian reported that the figures from Defra indicated that there was an underspend in the Government’s environment farming schemes of £110 million in 2021-22 and £117 million in 2022-23.

I thank the noble Baroness, Lady Bennett of Manor Castle, for raising the issue of the land use framework. Can the Minister perhaps say when, if ever, it will be published?

I concede that the announcements made by the Secretary of State earlier this month have seen some improvements. For example, increased payment rates for species-rich grassland are welcome and long overdue, but let us be clear: this covers only around 0.1% of farmland in this country. There is precious little in these changes to support biodiversity improvement in the remaining grasslands, which can, if properly managed, become a thriving habitat for many iconic species in this country. I am sure that this House does not need to be reminded that we have lost over 90% of our hay meadows since the 1930s.

This is not about creating a chocolate box vision of a bygone era. Diversity of species benefits so much more than the simple flora and fauna of a field. We are now recognising the importance of multispecies pastures as reservoirs of beneficial predators. The technical term biological pest control, which is standard practice today in more than half of our horticulture production, is, at its heart, little more than the eradication of pest, disease or weed populations by a natural predator, whose population can be encouraged by a richer tapestry of habitats for food production and environment. I am afraid that I see little in the Secretary of State’s announcements in this area.

The NFU has always supported sustainable food production alongside environmental work, provided that domestic food production levels are at least maintained, but the impact of this updated SFI is not clear. For arable farmers, some of the best-paying options are where they take land out of production—the right reverend Prelate the Bishop of Norwich referred to this.

On species management, the Government have said that the ELM scheme will support species recovery and management action by farmers, landowners and other managers. The Forestry Commission argues that, although wild deer contribute to the UK’s biodiversity, they can have a negative impact, because they browse on the seedlings and regrowth of certain trees and plant species. Deer populations are currently unsustainable and culling is now necessary. The same applies to the grey squirrel population. The Government have to provide realistic future certainty on a clear and stable ELM scheme, rather than this intensely frustrating drip feed of SFI options.

With 10 Secretaries of State in 13 years, it is perhaps not surprising that the Conservatives have failed to grasp the biggest opportunity in 70 years to recover nature. During the last seven-year period of mismanagement, the Conservatives have, unbelievably, increased core Defra staff almost fourfold, from 1,800 in 2016 to nearly 7,000 in 2023. Investing in nature is good value, and the Liberal Democrats will increase the agricultural budget by an additional £1 billion to ensure that farmers get the fair deal they deserve.

I strongly support using ELMS to support biodiversity, as I have highlighted, including specific management to support populations of endangered species in all habitats across the UK landscape. However, we will not achieve that with the current set of announcements, or without taking farmers with us on a journey where they can be properly rewarded for the vital role they play in addressing the declines we have seen in too many species across the UK. If the current Government continue as they are, with uncertainty and incompetence, before long it may well be the British farmer who becomes the endangered species.