Water Companies: Licence Conditions
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Lord Douglas-Miller (Con)
I do not think that I agree with that assessment at all; it certainly is not this Government’s policy to nationalise the water industry or indeed any other industry. Environmental issues around water companies are certainly highlighted more greatly than they ever were in the past. The Government have put a huge effort into monitoring the level of sewage and other pollutants going into the water systems. That, in part, is leading to much greater awareness of issues that have probably been going on for a very long time, and we are committed to fixing those issues.
Baroness Hayman of Ullock (Lab)
My Lords, I want to come back to the Minister’s response on dividends, investments and payments. Earlier this month, the Financial Times revealed that the 16 water companies paid out a total of £78 billion in dividends in the three decades since privatisation to March 2023, building up £64 billion in borrowing over the same period. It is worth remembering that the utilities were debt free when they were privatised. Frankly, I find these figures incredible. Is the Minister justifying his response to my noble friend as to how much money is acceptable to be paid in dividends?
Lord Douglas-Miller (Con)
The noble Baroness raises a lot of very detailed numbers in her question, but the principle of dividends for public companies is well established and every other public company produces dividends for its investors. Perhaps I might take away those thoughts and come back to her.
Chemicals Strategy
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Baroness Hayman of Ullock
To ask His Majesty’s Government when they intend to publish the chemicals strategy to which they committed in their 25-year environment plan of January 2018.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)
My Lords, protecting human health and the environment from the risks posed by chemicals is a priority of the Government. The Government will meet their commitments on chemicals set out in the Environmental Improvement Plan 2023. The short delay in publishing the chemicals strategy is due to the new Secretary of State being more ambitious with its scope. We continue to engage regularly with industry, we have a draft strategy just here, right behind me—I do not want to do a spoiler alert—and we aim to publish it very shortly.
Baroness Hayman of Ullock (Lab)
My Lords, it is now over six years since the chemicals strategy was first promised, to set out the UK’s approach post Brexit to ensure that chemicals are safely used and managed, with the promise of a world-class system. However, this month, Hazards magazine published data on workplace exposure limits for chemicals, which found that not a single new protective workplace exposure limit has been introduced into Britain since the UK left the EU. Worryingly, in 10 instances, the British standard was weaker than the new EU occupational exposure limit. Can the Minister confirm that when the strategy is finally published, it will urgently address this in order to reassure our British workers?
Lord Douglas-Miller (Con)
This is a complex area. I entirely agree with the noble Baroness’s thoughts and will take them back to the department to see whether we can get that included if it is not already there.
Sewage Pollution: Lakes and Rivers
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Lord Douglas-Miller (Con)
Yes. I point the noble Baroness to the plan for water, which lays out very clearly the 25-year strategy to reduce storm overflows to zero, and the investment plan that goes with that.
Baroness Hayman of Ullock (Lab)
My Lords, for the last couple of years the Government have talked a lot about all the action they have been taking, but the situation seems to be getting worse. How is all the monitoring that is happening actually going to be used to drive forward change and reduction at last?
Lord Douglas-Miller (Con)
Regarding one of the issues the noble Baroness raises, we now have a lot more information available to us to look at. When we did not have storm overflow discharge information, we were ignorant of the amount of sewage that was going into our rivers, lakes and other waterways. If you look at the results for the bathing water test, for example, you can see a significant improvement over the last 15 years because of all the measures we put in.
Fur: Import and Sale
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Lord Douglas-Miller (Con)
My noble friend is in very robust form, and I can see will be for many years ahead. I commit to providing a response to the consultation and the wider other brief as soon as I can.
Baroness Hayman of Ullock (Lab)
My Lords, surely the Minister would agree that, in light of the new legislation that is coming in on the banning of the import of shark-fins and the progress of the Government-backed Private Member’s Bill on banning cruel puppy imports, the trade measures, such as a total ban on the import of fur and foie gras, which also safeguard animal welfare standards, should have equal priority. That is clearly not the case at the moment.
Lord Douglas-Miller (Con)
The Government made it clear in their manifesto commitment that in all our trade negotiations we will not compromise on our high environmental protection, animal welfare and food standards. The UK is rightly proud of the animal welfare standards that underpin our high-quality produce. Imports into the UK must comply with our existing import requirements, such as meeting the United Kingdom’s slaughter standards.
English Horticultural Sector (Horticultural Sector Committee Report)
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Baroness Hayman of Ullock (Lab)
My Lords, I thank the noble Lord, Lord Redesdale, for his introduction and all committee members, who produced such a thorough and impressive report. We have heard from a number of them today: the noble Baroness, Lady Fookes, my noble friend Lord Carter, and the noble Lords, Lord Colgrain and Lord Curry. We thank them for their work on the report.
We know that growth in productivity, innovation and sustainability is an ambition that the horticultural sector has held for some time. The Government initially amplified that in their own food strategy and talked about the need for
“a world leading horticulture strategy for England”,
aiming to boost production in the UK, create skilled jobs and future-proof the sector in the face of climate change. I thank at this point the noble Lord, Lord Taylor, for sharing his industry experience, because it is important that we look at things in the context of industry.
The noble Lord, Lord Redesdale, said that, despite those government promises in the report, we badly need a horticultural strategy; I am sure that we are all looking forward to hearing what the Minister has to say about that. We also heard about health. Any strategic plan to increase fruit and vegetable production, for example, needs to be coupled with efforts to increase fruit and vegetable consumption for the future health of our young people.
A recent report commissioned by the NFU talked about the increases in production costs over the past two years; it put the figure at 39%, with the main drivers being energy, labour and fertiliser. Although some producers have secured some increases from their customers, this often has not been at the rate required to keep pace with costs of production, clearly putting pressures on the industry.
We have also heard about how fragile our supply chain is, due partly to ongoing global instability—the noble Lord, Lord Colgrain, talked about that. Retailers and government should not rely on imports, however, to plug our self-sufficiency gap to feed the nation. The Government should match their own ambition to grow the horticultural sector, as they outlined in their Farm to Fork summit and their food strategy. The noble Earl, Lord Shrewsbury, talked about the strategy and the importance of the Government acting on what they know to be the right direction for the horticultural sector. However, the recent EFRA Select Committee report expressed disappointment in the strategy for not having food security as part of its focus. Can the Minister explain why that was and just how high up the agenda food security is?
Defra has also had its fairness in the supply chain consultation. The consultation did not include ornamentals. I wondered why that was. It closed in February, so when are we going to hear? The Government said that the consultation did not include ornamentals because they were going to be part of a different consultation in the future. Again, I wonder when we are likely to see that.
Public procurement has also been mentioned during the debate. We know that dynamic procurement practices could support smaller growers. As part of that, the Government’s response said that they would update the government buying standards for food and catering services
“to showcase the use of sustainable, high welfare, quality produce in the public sector”.
As far as I can see, that has not happened yet; neither has there been a publication of a formal response to that consultation. Perhaps the Minister could update us.
We have also heard quite a bit about trade. There are concerns about border control posts posing severe biosecurity risks for the horticultural sector, particularly for the protected salad sector, which imports young plants. The risk is that BCPs become a point of infection and not inspection. The proposed authorised operator scheme being piloted excludes many horticultural businesses due to the narrow eligibility criteria. Perhaps the noble Lord could expand on how the industry is being supported in relation to that.
Many noble Lords have talked about skills. There have been unprecedented challenges, including labour shortages, from the many changes internationally: the EU exit, the European conflict and the Covid pandemic. The report highlights that the horticultural sector faces a persistent deficiency in both workforce and skills—although it clearly highlights, as other noble Lords have mentioned, the T-level qualification in land management which has been launched recently.
However, there does not seem to be sufficient encouragement for young people to engage in horticultural careers; the noble Baroness, Lady Fookes, particularly talked about this. In terms of apprenticeships, the report notes that there are several barriers, both for apprentices and industry, preventing apprenticeship schemes reaching full potential. I noted in the Government’s response that there is not anything new on apprenticeships. Again, I wonder if the Minister could elaborate on the Government’s thinking around that.
A number of noble Lords talked about seasonal workers. The right reverend Prelate the Bishop of Newcastle talked about workers’ conditions, as did the noble Baroness, Lady Hamwee, in her remarks. The noble Baroness, Lady Bennett, referenced the recommendation that the Government should publish their review of the seasonal worker route but also respond to the Migration Advisory Committee’s latest report on the shortage occupation list. We heard that the first is going to come in due course in the Government’s response, and that the second is being carefully considered. Like the noble Baroness, Lady Bennett, I would really welcome any chance of a clarification from the Minister.
On climate change and biodiversity, the committee had noted that the
“utilisation of green spaces in urban environments … can help to support the reduction of urban heating and surface water flooding”.
We have had a number of questions from noble Lords around water supply and storage, so I will not go into that, but I would be interested to hear the Minister’s response.
Also, I am afraid that I am going to mention the land use framework again to the Minister. I am aware that he has made it quite clear that we should see it before the summer but, about a month ago, there was a story that there were comments from Defra suggesting that it would have the status only of guidance—I just wondered if that was the noble Lord’s understanding.
On research and development, the committee emphasises that the landscape needs to improve. My noble friend Lord Carter talked about the importance of technology, as did the noble Earl, Lord Caithness. On that note, I wonder if the Minister is able to give an update on the automation review. I could not find anything on that, but perhaps I have missed it.
We have heard a lot about peat. The Minister is aware that everyone is waiting to find out what will happen regarding the proposed ban of peat use in amateur gardening. Again, it would be interesting to know whether the Government are likely to support Theresa Villiers’s 10-minute rule Bill, which has been brought forward in the other place.
Finally, I will just say a bit on horticulture and health. The report explains the significance of horticulture for better health and well-being, including alleviating mental and physical health difficulties. The noble Lord, Lord Colgrain, talked about the importance of health and getting out into nature and the importance of outdoor activities. The report also talks about the benefits of community gardening and allotment spaces, and the noble Lord, Lord Redesdale, talked about the importance of this in his introduction. The committee also acknowledges, however, that:
“Not all green spaces are equally accessible,
and there is also a correlation around ethnicity and income regarding deprivation of access. As the noble Lord, Lord Curry, mentioned, in the context of rising obesity, pressures on the NHS and a greater shift towards plant-based diets, growers and horticulture can play a really vital role in supporting the nation’s health while also boosting the sector as we go forward.
I also mention, as was mentioned in the report, the Community Eatwell scheme. There were pilots promised around this; I think that there might be a local scheme in Manchester, but I do not know if that is on the part of the Government or a separate thing. It would be interesting to know more about how that is moving forward.
On green social prescribing, the Government have done an evaluation report, which will apparently be published as soon as possible. Sheffield Hallam University seems to be doing something on it, but I cannot see anything from the Government. Again, it would be useful to know.
I should have said that I am a member of the APPG on horticulture, thanks to the strong encouragement of the noble Baroness, Lady Fookes. It is disappointing that the Government’s response did not adequately address all the concerns. As the noble Baroness, Lady Fookes, said, there has not been enough action.
Veterinary Medicines (Amendment etc.) Regulations 2024
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Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for his introduction to this important statutory instrument. I am grateful to the Secondary Legislation Scrutiny Committee for drawing it to the attention of the Committee.
This important statutory instrument ensures the quality, safety and efficacy of veterinary medicines as regulated by the Veterinary Medicines Directorate, the VMD. The Veterinary Medicines Regulations have not been updated since 2013, when the fee base was also set, so there is quite a lot of inflation to consider in terms of fees and costs, alongside scientific innovation. The main thrust of the SI is an attempt to reduce the risk of the development and spread of antibiotic resistance, which I welcome. The noble Lord, Lord Trees, has raised this issue many times in the Chamber, as well as this afternoon.
Unlike the noble Baroness, Lady Bennett of Manor Castle, I do not have extensive knowledge of the issues we are debating. Not being a vet or having anything to do with animals, whether domestic or destined for the food chain, my only contact with the veterinary profession is taking my dog to be stitched up after an overenthusiastic race through the woods or going to renew his regular preventive medication. I was, however, privileged to visit a veterinary hospital run by Anderson Moores last October. It was an extraordinary experience. The hospital is extremely modern and does very complex surgery on a range of animals. This particular hospital lent ventilators to the overstretched local NHS hospital during the Covid outbreak.
Although I fully support this SI, I have a number of questions for clarification. Most of them relate to paragraph 7 of the Explanatory Memorandum. Paragraph 7.1 refers to making more than 200 amendments to the VMR, including fee changes. The Secondary Legislation Scrutiny Committee asked whether these changes would lead to higher prices for veterinary practices. The answer from Defra referred to the private nature of veterinary practices. I interpreted that as a “don’t know” in terms of whether Defra actually knew whether the changes would increase prices. I will return to this issue later.
Paragraph 7.2 makes it clear that vets are required
“to provide owners of food-producing animals with records as soon as reasonably practical after administering a medicine”
with a record of that medicine, when it should be taken and the lapse of time after taking the medicine before the animals can enter the food chain. This is clear and reassuring. However, I ask the Minister whether this is what currently happens or less stringent measures are currently in place. Will this change be an additional burden?
Many of the requirements under section 7 place added burdens on marketing, manufacturers, wholesalers and keepers of food-producing animals. These relate mostly to limiting the spread of antibiotic resistance. Paragraph 7.4 of the EM refers to an inspector seizing items that may breach regulations. Can the Minister give an example of where and at what point in the chain this might happen?
Paragraph 7.6 gives a lot of detail. Sub-paragraph (e) removes the need
“to renew a marketing authorisation after five years”.
That is excellent but sub-paragraph (h) requires marketing authorisation holders to submit an annual report. Is this a contradiction or have I misunderstood it?
Paragraph 7.7 deals with Schedule 2 to the VMR. Sub-paragraph (f) extends
“the authorisation and inspection requirements for equine stem cell centres to bring all stem cell centres for non-food-producing animal species under regulatory oversight”.
What happens in those stem cell centres now?
Paragraph 7.8 has a whole list of requirements and changes to reduce the risk of antimicrobial resistance. I fully support these but there is obviously going to be a cost element to this. Sub-paragraph (f) refers to a suitably qualified person being present when medicines are handed over. This appears to indicate that the veterinary profession is suffering from a lack of pharmacy specialists, similar to the experience of high street chemists.
Sub-paragraph (g) refers to
“restricting the prescription of antibiotic veterinary medicines”.
This has been referred to. Does it apply only to animals entering the food chain or to domestic pets as well? Is this restriction likely to lead to unnecessary suffering by some animals?
I fully support sub-paragraph (h), which prohibits
“the prescription of antibiotics for prophylactic purposes … except in exceptional circumstances”.
We have heard two cases of where there may not need to be exceptional circumstances.
Lastly, paragraph 7.12 refers to the VDM as a “cost-recovery agency”. Since it has been 11 years since the fees were set, there is quite a lot of inflation to consider when setting new fees and charges.
That brings me on to section 12, which has already been referred to. It indicates that, as the annual net cost to business is likely to be £2.5 million per year, no impact assessment has been produced. The limit for the production of an IA is £5 million per annum. With such a wholesale overhaul of the treatment of veterinary medicines and the new administrative burdens to be introduced, coupled with the increased cost of the medicines themselves, I would have thought that the cost could be much higher than £2.5 million. The effect on small businesses and large chains of veterinary practices is likely to be considerable. The noble Baroness, Lady McIntosh of Pickering, raised this issue. I admit that I have not read the sections of the de minimis assessment that cover small and micro businesses and the impact on medium businesses—nor do I have somebody working for me who would do this—but I seek the Minister’s assurance that the true effect on businesses involved in veterinary medicines has been carefully and accurately calculated.
I turn now to section 10 on the public consultation, which ran for eight weeks up to 31 March last year and received 188 responses from a wide representation of stakeholders. Although I feel that 74 questions was a considerable number for consultees to complete, it indicates that the consultation was thorough. However, I fear that the areas where the VDM was proposing to be influenced by the consultation or otherwise were confusing. There is this phrase at 10.3:
“The main areas where we have decided to amend or not implement the proposed changes relate to”.
It is followed by a list, including in the first bullet point the phrase,
“we have decided to not implement”.
That is not quite the way I would have put it, but I get the general drift.
Lastly, I note that the guidance will be amended on the changes to the VMR and will be available to stakeholders shortly. I am sure that, given the considerable changes being made, this will be welcomed by those having regard to the implementation of this instrument.
I apologise to the Minister for the number of questions I have asked and points I have made but it would be helpful to have answers to these questions. I believe that this is a very important instrument; I support it, as it will make a real difference to the way in which animal medicines and feeds are administered for the benefit of food-producing and other animals.
Baroness Hayman of Ullock (Lab)
My Lords, I start by welcoming this statutory instrument. It makes more than 200 changes to the Veterinary Medicines Regulations 2013; there is a very long list of changes under quite a number of headings. I start by congratulating the Minister on his introduction, which was both clear and succinct. We all appreciated that, I think.
This week, I received an email from NOAH asking for our support in passing these new regulations because it considers them absolutely crucial. We have also heard that from noble Lords today. The reasons why it thinks they are crucial are, first, because the current regulatory framework is not fit for purpose; the noble Baroness, Lady Bakewell, mentioned that it had not been changed since 2013 so this is well overdue. Secondly, animal health businesses and the UK regulatory authority, the Veterinary Medicines Directorate—we heard about it from other Members—really need this legislation to progress in order to support confidence and investment in the sector. The third reason why it is very supportive is because, as it rightly says, the animal health industry is high-value, high-growth and a highly skilled sector that contributes significantly to the UK as a whole. However, until we get these new regulations, its full potential cannot be achieved. We will support this SI.
A number of issues were raised during our debate. The first that I would like to reference is the fight against antimicrobial resistance. This is clearly welcome; anything we can do to support that is really important. The noble Baroness, Lady Bennett, and the noble Lord, Lord Trees, talked about the issues here; indeed, the noble Lord made an important point about practicalities, which the noble Lord, Lord de Clifford, also mentioned. There is no point in having legislation and regulations if, practically speaking, they are not going to work effectively and efficiently. I am interested to hear what the Minister has to say in his response on those matters.
I was pleased to see that there was extensive consultation on this; it is clearly outlined in section 10 of the EM. When we have not had any updates for more than 10 years, it is important that there is serious consultation with the industry. As the noble Baroness, Lady Bakewell, and the noble Lord, Lord de Clifford, said, paragraph 10.3 of the EM details the areas where things have been amended and implemented.
I sometimes complain about the Government and consultation but it is important to give credit where it is due. Doing an extensive consultation then clearly laying out where changes have been made is best practice. I was very pleased to see in paragraph 10.3 that this has been done. That does not necessarily mean that everyone agrees with the decisions but it is important that consultation is done properly and that industry, when it is asked for its opinions, is listened to. That is very important.
Having said that, I am sure the Minister will have picked up that a few noble Lords who took part in the debate had a few suggestions about how things could still be improved. One that I am interested in was initially mentioned by the noble Baroness, Lady McIntosh of Pickering. It concerns small practices and making sure that these extra burdens can be managed by them—as well as making sure that the Government are aware of the burdens and the extra costs—because it is important that they are supported. Vets have had a lot of pressures on them in recent years, so this is really important. I know that, during the cost of living crisis, it has often been difficult for vets to balance fees, for example, with providing care to animals; that is clearly more difficult for small practices.
Official Controls (Fees and Charges) (Amendment) Regulations 2024
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Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for his introduction to these two statutory instruments. On the face of it, they seem fairly straightforward and relate to the border target operating model. The Secondary Legislation Scrutiny Committee has flagged that this is a matter of interest to the House.
The first instrument relates to sanitary and phytosanitary border controls—SPS. The second relates to SPS controls applying to imports of live animals, animal products, high-risk food and feed of non-animal origin, plants and plant products at the border. This second SI contains a large and potentially complex list of products; however, the instrument appears to deal only with plants and plant products. Also, the risk-based import checks on medium-risk goods applies to goods from some countries that are EU member states, as well as Liechtenstein and Switzerland. These countries’ goods that are not within scope include fruit and vegetables, which are currently treated as low risk.
I have some questions about these two instruments and wish to ask for some clarification. Paragraph 7.3 of the Explanatory Memorandum for the first instrument, on fees and charges, states:
“This instrument changes the duty to charge to a power to charge by extending the circumstances in which the CA”—
competent authority—
“may reduce charges or waive them altogether”.
The Minister has mentioned this already. I am concerned that, if the charge is waived, it could mean that the imported product would be cheaper than a homegrown or home-produced one, which would disadvantage our farmers and horticulturalists. Can the Minister provide reassurance on this issue?
The ability to waive charges also seems at odds with the second instrument, on official charges and frequency of checks. Paragraph 7.2 of its EM states:
“Changes are being made to the fees legislation to reflect the level of identity and physical checks determined in accordance with the 2022 Regulations … ensuring the full cost of services to conduct import checks are recovered from businesses using these services”.
Further on, the last sentence of paragraph 7.4 says:
“The existing fees legislation ensures that the cost of plant health services, including import inspections, is recovered via fees”.
Either the fees are to be charged on a cost-recovery basis or they can be reduced—or waived altogether. Perhaps one SI legislates for full cost recovery while the other allows for the waiving of fees and charges. Can the Minister give clarity on this issue?
Paragraph 7.4 of the first instrument’s EM states that
“not all consignments will … attend a BCP”—
a border control post. It also says that fees and charges can be levied digitally and away from the BCP. Some have raised concerns that this may not be safe and that consignments should be capable of being inspected at the BCP. The noble Baroness, Lady Bennett, also raised concerns about the security of plants. Can the Minister comment?
Consultation through targeted stakeholders ran for 10 weeks. The second instrument’s EM indicates:
“The respondents were generally supportive”.
I have read the letter from Defra, dated 24 February, on the consultation responses; I have also looked at the responses online. There were three. Two were from Scottish businesses that raised no concerns. The third was from the NFU; it highlighted its concern about the flat rate fee for plants for planting, which should be extended to include bulbs for planting, and the definition of the final user. Defra’s response to the NFU was that its concerns are outside the scope of the consultation as the instrument is for medium-risk goods while bulbs are high-risk goods. On this basis, we are told that the consultation response was “generally supportive”, which just goes to show that, with a bit of ingenuity, you can make a consultation give whatever response you want it to.
The Secondary Legislation Scrutiny Committee raised concerns about the common user charge, which is to be introduced later this year and does not require legislation. This means that there will be no parliamentary oversight of the charge, its impact and whether it will be draconian or not likely to actually cover the costs of implementation. Would the Minister care to comment on the introduction of this common user charge?
I am not opposed to these two SIs, but I am somewhat dismayed by the way in which they are being introduced and the lack of clarity over the implementation of the charges and fees. I look forward to the Minister’s clarification.
Baroness Hayman of Ullock (Lab)
My Lords, looking first at the Official Controls (Fees and Charges) (Amendment) Regulations in front of us, previous speakers have clearly raised concerns about BTOM. I have also done so in the past; the Minister and I have discussed this in the Chamber previously. However, with this SI, we are particularly concerned about the potential impact on small businesses and the fact that the charges also need to be considered in the broader context of the increased charges, particularly for small businesses, since we left the EU. I am aware that the Government believe that there is not going to be any serious impact on small businesses but our concerns come from within that broader context, because we know that British importers have been paying further costs over the last few years since we moved to the new system of trade with the EU.
Around 30% of the food that we consume in the UK comes from the EU, so it is incredibly important that, when we bring in new systems, we avoid any confusion, chaos or delays. It would be useful to hear reassurances from the Minister on these issues because small businesses are particularly worried about this, as well as the increased costs. Once you start getting delays, as I am sure the Minister knows, they have a huge impact on perishable fresh produce. How confident is the Minister that this can go through smoothly?
The British Chambers of Commerce has complained to the Government about the lack of communication and information provided. How has the Minister’s department been working with businesses, particularly small businesses, on improving the communications and information that chambers of commerce have raised concerns about? What clarifications have been provided following the concerns raised?
The noble Baroness, Lady Bakewell, talked about the fact that this provides competent authorities with greater flexibility to determine fees and charges, and that this is now on a recovery basis. She asked some questions around that, but I just wondered if there are any precedents for recovery like this, with fees and charges being done on a cost-recovery basis. What are the precedents around that?
The other thing I was going to raise also applies, to a certain extent, to the plant health SI and is around the lack of consultation. I am aware that there is no statutory duty to consult on this issue but, considering the number of concerns that have been raised around BTOM and its rollout, including the very late announcement of the common user charge, I wonder whether the department might have followed a different process, with the benefit of hindsight. It could have done a bit more consultation with industry to avoid those concerns and late rollouts. In future, when looking at the different trade mechanisms that will need to come in, will it perhaps look more broadly at working with business at an earlier stage to avoid some of the, shall we say, glitches that have happened?
I agree with very much with what both noble Baronesses have said already on the draft plant health fees statutory instrument, so I will not go into great detail. The concerns of the Horticultural Trades Association have been clearly laid out: the impact of the volume of checks that will be required and whether that will lead to further delays. The importance of the horticultural sector to our economy needs greater recognition. It would be good if the Minister could give some indication to the Horticultural Trades Association on ornamental horticulture, plus vine horticulture, tomatoes, and others. We have seen gaps on our supermarkets shelves in recent years. It would be very good if our horticultural sector was better supported and encouraged.
Farmers: Flooding Compensation
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Lord Douglas-Miller (Con)
I have recently attended a number of meetings on this specific subject, and the intention last week was to get the first element of this fund out and available to farmers. We have this issue under constant review and I hope that, if there are further announcements to make, we can make them very shortly.
Baroness Hayman of Ullock (Lab)
My Lords, I come back to the right reverend Prelate’s question about food security. The Minister talked about food production being constant and mentioned ELMS, but that also looks at flood relief schemes for farmers that take more land out of food production. The increase in climate change and the storms we have been seeing have really worrying implications for food security, and I genuinely do not think that measuring food production constants is going to solve the problem. We need a long-term food security plan that takes account of the implications of future storms and flooding.
Lord Douglas-Miller (Con)
The noble Baroness will be very well aware that there is a trade here between the environmental gains we are looking to enact and protecting our food production. One of the main aims of ELMS is to improve productivity, and a lot of the funding through ELMS is driving better productivity—higher yields from smaller areas of land—so that we can then allow land to be available for nature and improve our biodiversity.
Food Security
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Lord Douglas-Miller (Con)
My noble friend is correct. There is a presumption against planning on grade 1, grade 2 and grade 3 land. He is entirely right that solar energy and any other developments need to be appropriately sited to achieve the right result.
Baroness Hayman of Ullock (Lab)
My Lords, the NFU has asked the Government to identify opportunities to increase our market share of foods we can produce sustainably, including a commitment to source 50% of food into the public sector from British farms. Public procurement can support our food producers, so what are the Government doing to support farmers through procurement?
Lord Douglas-Miller (Con)
I thank the noble Baroness for her question. This month the Environment Secretary appointed Will Quince MP as an independent adviser to support our ongoing work to improve food procurement in the public sector. His review will look at how we can increase the impact and reach of the existing government buying standards for food and catering services and promote our high standards in places such as residential care, hospitals and schools.
Fair Dealing Obligations (Milk) Regulations 2024
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Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for his introduction to this SI and for his time and that of his officials in providing a briefing for this long-awaited statutory instrument. Other noble Lords have made positive comments on supporting dairy farmers, and the detail of this statutory instrument. I am grateful to the NFU for its briefing.
Since the voluntary code of practice for dairy contracts was introduced in 2012, nearly 12 years ago, purchasers have been able to change contract terms and pricing mechanisms, even, in some instances, introducing retro-spective penalties and price cuts without negotiation. The Covid-19 crisis saw this happen many times: farmers were hit with price cuts at no notice, and there was a lack of transparency over pricing and delayed payments, resulting in significant pressures on producers. Farmers got a very poor deal.
This SI will introduce mandatory minimum terms for dairy contracts which must be adhered to. As the noble Lord has said, these contracts will cover price, cooling-off periods, notice periods, variations, exclusivity and farmer representation. All these should make a huge difference to how farmers are treated and ensure that they get a fair price for their milk, which is essential for the survival of the dairy-farming industry. It will also bring a level of transparency into milk contracts not previously present.
I fully support this SI and have a point to raise. The Government conducted a call for evidence at the end of 2016 on the remit of the Groceries Code Adjudicator and whether it should cover all primary producers. This concluded that it would be better for primary producers in the dairy industry not to be covered by the GCA. That was eight years ago. Similarly, the consultation on the issue took place between June and September 2020, nearly four years ago. It would seem that the Government, although concerned about an unfair pricing system for farmers, were not in a hurry to do anything about it.
There are large parts of the instrument around termination of contracts, including where the business purchaser becomes insolvent and where there are disputes and enforcement. I welcome these sections, as they give farmers access to redress when things go wrong.
I understand that the debate on this SI in the other place was very short indeed, and I have no wish to prolong the debate here this evening. This legislation, while long in the making, is a positive step forward in addressing the imbalances that we have seen for too long in the dairy supply chain. I also hope that it will lead to support for farmers going forward, as they look to create the right structures to make the best use of the issues in this legislation.
Finally, I place on record my thanks, and I am sure the thanks of many others—the noble Lord, Lord Grantchester, referred to this—to Michael Oakes, who has been the chair of the NFU Dairy Board for eight years. Without his tenacious work over the past decade on this issue, I doubt that we would be debating it this evening. It seems that, without an advocate continually pushing, progress can be painfully slow. Let us hope that progress now speeds up considerably, and that this SI becomes law and is enacted without further delay.
Baroness Hayman of Ullock (Lab)
My Lords, I start by thanking the Minister for his introduction and saying how impressed I was to watch him pouring a glass of water at the same time: he is clearly channelling his feminine side by doing two things at once.
These draft regulations, as we have heard, propose to introduce minimum standards for the contracts that businesses use when purchasing milk from dairy farmers. We fully support the aim to improve fairness and transparency in the UK dairy sector, which, according to Defra, is characterised by small, fragmented dairy producers. We have heard a lot about the unfair commercial terms on which farmers have had to go into contracts, so we very much support this SI. Like other noble Lords, I thank the NFU for its work on this issue. The NFU has made it clear that it strongly supports the regulations, as unfair milk contracts have unfortunately been an area of concern for many years. The right reverend Prelate the Bishop of Hereford talked about the voluntary code of practice for dairy contracts, which came in in 2012. This has clearly not been working, so we very much welcome the regulations in front of us today.
While I have said we very much support the regulations, I have a number of questions for the Minister. The proposed requirements include that all contracts should be made in writing and contain clear pricing terms, through either a fixed or variable price, setting out how the price to be paid is generated and establishing a means for producers to challenge variable price calculations. We are very pleased that unilateral changes to contract terms will be prohibited and that the Secretary of State is going to be able to impose fines. The Minister said in his introduction that this is only the first and that further legislation will cover other agricultural sectors. The noble Baroness, Lady Bakewell, mentioned how long the regulations have taken. It has dragged on. Can the Minister say why it has taken so long? It is four years since the Agriculture Act was passed. Although he mentioned pigs in his introduction, does he have any idea when we are likely to see the SIs for the other areas we are expecting—pigs, eggs and fresh produce?
The agricultural supply chain adjudicator and the Groceries Code Adjudicator have been mentioned. Transform Trade sent an interesting briefing expressing its concerns around departmental fragmentation and the sectoral siloed approach that it feels the Government are taking by addressing the problems in only four sectors, and only at the farming stage. Its concerns include the fact that risks and costs will continue to be passed on to all supply chains; and that while the adjudicator may be able to address farmers’ experience of unfair trading practices, where the cause of that unfair trading practice originated with the food retailers, the retailers will continue to get away with passing unfair trading practices. I would be interested to have reassurances from the Minister on this concern.
Of course, not all farmers work in the four sectors that are covered. How does Defra intend to keep an eye on what is happening in the other sectors that are not protected? Will the adjudicator appointed to enforce the milk codes be able to share information relevant to the GCA’s ability to assess whether the 14 largest UK food retailers they cover have breached the Groceries Supply Code of Practice purchasing code? We need to be sure that this is working effectively.
The noble Lord, Lord Curry, asked about the scope of the GCA. This is a really important question. When I was in the other place, we did a lot of work on the GCA when it was established, and it really needs to be seen to be working effectively, including within this new regime.
My noble friend Lord Grantchester talked about food waste. He mentioned that there is little waste within the dairy sector, but the design of regulations under these powers is potentially a missed opportunity to implement the Government’s stated policy of using them to reduce farm-level food waste, as was said during the passage of the Agriculture Act. As we are expecting further SIs to come forward in a similar way, I would be interested to hear why the Government’s consultation on using the powers did not make explicit reference to, or explicitly invite evidence on, how the powers could be used to reduce food waste. Food waste prevention may well be on the Government’s radar, but it is not clear from the consultations that were carried out, so my final comment is that further elaboration and confirmation around that would be very welcome.